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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________________
FORM 10-Q
______________________
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number: 001-39160
______________________
FISKER INC.
(Exact name of registrant as specified in its charter)
______________________
Delaware82-3100340
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1888 Rosecrans Avenue, Manhattan Beach, CA 90266
(Address of principal executive offices)
(833) 434-7537
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
______________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
symbol(s)
Name of each exchange
on which registered
Class A Common Stock, par value of $0.00001 per shareFSRNew York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
______________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 17, 2023, the registrant had 218,201,457 shares of Class A Common Stock and 132,354,128 shares of Class B Common Stock, par value $0.00001 per share, outstanding.

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TABLE OF CONTENTS
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Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are forward-looking and as such are not historical facts. These forward-looking statements include, without limitation, statements regarding future financial performance, business strategies, expansion plans, future results of operations, estimated revenues, losses, projected costs, prospects, plans and objectives of management. These forward-looking statements are based on our management’s current expectations, estimates, projections and beliefs, as well as a number of assumptions concerning future events, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this report, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would” and variations thereof and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this report may include, for example, statements about:
•our ability to grow and manage growth profitably;
•our ability to continue to enter into binding contracts with OEMs or tier-one suppliers in order to execute on our business plan;
•our ability to execute our business model, including market acceptance of our planned products and services;
•our expansion plans and opportunities;
•our expectations regarding future expenditures;
•our ability to raise capital in the future;
•our ability to attract and retain qualified employees and key personnel;
•the possibility that we may be adversely affected by other economic, business or competitive factors;
•changes in applicable laws or regulations;
•the outcome of any known and unknown litigation and regulatory proceedings;
•our ability to maintain the listing of our Class A common stock, par value $0.00001 per share (“Class A Common Stock”) on the New York Stock Exchange (“NYSE”);
•the possibility that the Russian-Ukraine war, the Israeli-Hamas conflict, rising interest rates, inflation and governmental responses to an inflationary environment, or public heath issues, including epidemics or pandemics, may adversely affect the results of our operations, financial position and cash flows; and
•other factors described in this report, including those described in the section entitled “Risk Factors” under Part I, Item 1A of our most recent Annual Report on Form 10-K for the year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 1, 2023, as supplemented by reports subsequently filed with the SEC, including the risk factors set forth in the section entitled “Risk Factors” under Part I, Item 1A of this report.

The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on our business. There can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the section entitled “Risk Factors” under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the effect of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
The forward-looking statements made by us in this report speak only as of the date of this report. Except to the extent required under the federal securities laws and rules and regulations of the SEC, we disclaim any obligation to update
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any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements.
WEBSITE AND SOCIAL MEDIA DISCLOSURE
We use our website (www.fiskerinc.com) and various social media channels as a means of disclosing information about the company and its products to its customers, investors and the public (e.g., @fiskerinc, @fiskerofficial, #fiskerinc, #henrikfisker and #fisker on Twitter, Facebook, Instagram, YouTube, TikTok and LinkedIn). The information posted on social media channels is not incorporated by reference in this report or in any other report or document we file with the SEC. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about the Company when you enroll your e-mail address by visiting the “Investor Email Alerts” section of our website at www.investors.fiskerinc.com. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about the Company when you enroll your e-mail address by visiting the “Investor Email Alerts” section of our website at www.investors.fiskerinc.com.
ADDITIONAL INFORMATION
Unless the context indicates otherwise, references in this report to the “Company,” “Fisker,” “we,” “us,” “our” and similar terms refer to Fisker Inc. (f/k/a Spartan Energy Acquisition Corp.) and its consolidated subsidiaries (including Fisker Group Inc. or Legacy Fisker). References to “Spartan” refer to Spartan Energy Acquisition Corp., our predecessor company prior to the consummation of the Business Combination (as defined below).
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PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Fisker Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
 
As of September 30, 2023
As of December 31, 2022
ASSETS  
Current assets:  
Cash and cash equivalents$527,442 $736,549 
Restricted cash97,954 — 
Inventory545,653 4,276 
Prepaid expenses and other current assets274,391 87,489 
Equity investment2,220 3,140 
Total current assets1,447,660 831,454 
Non-current assets:
Property and equipment, net566,748 387,137 
Intangible assets228,819 246,922 
Right-of-use assets, net78,739 33,424 
Other non-current assets54,371 16,489 
Total non-current assets928,677 683,972 
TOTAL ASSETS$2,376,337 $1,515,426 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$444,734 $58,871 
Accrued expenses398,959 264,925 
Lease liabilities17,825 7,085 
Total current liabilities861,518 330,881 
Non-current liabilities:
Customer deposits16,359 15,334 
Lease liabilities51,723 27,884 
2025 Convertible senior notes and derivative liability, carried at fair value
446,275 — 
2026 Convertible senior notes662,118 660,822 
Total non-current liabilities1,176,475 704,040 
Total liabilities2,037,993 1,034,921 
COMMITMENTS AND CONTINGENCIES (Note 17)
Stockholders’ equity:
Preferred stock, $0.00001 par value; 15,000,000 shares authorized; no shares issued and outstanding as of September 30, 2023 and December 31, 2022
— — 
Class A Common stock, $0.00001 par value; 1,250,000,000 shares authorized; 210,885,860 and 187,599,812 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
2 2 
Class B Common stock, $0.00001 par value; 150,000,000 shares authorized; 132,354,128 shares issued and outstanding as of September 30, 2023 and December 31, 2022
1 1 
Additional paid-in capital1,803,463 1,650,196 
Accumulated deficit(1,465,122)(1,166,741)
Receivable for stock issuance— (2,953)
Total stockholders’ equity338,344 480,505 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$2,376,337 $1,515,426 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Fisker Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Three and Nine Months ended September 30, 2023 and 2022
(In thousands, except share and per share data)
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Revenues$71,800 $14 $72,823 $36 
Cost of revenues104,548 6 105,472 25 
Gross margin(32,748)8 (32,649)11 
Operating costs and expenses:
Selling, general and administrative57,650 22,102 137,552 61,615 
Research and development13,428 117,885 143,422 290,505 
Total operating costs and expenses71,078 139,987 280,974 352,120 
Loss from operations(103,826)(139,979)(313,623)(352,109)
Other income (expense):
Other income (expense), net(2,288)270 (2,593)(553)
Interest income6,395 3,075 19,870 4,693 
Interest expense(4,928)(4,693)(14,134)(13,827)
Foreign currency gain (loss)11,068 (7,285)14,467 (9,956)
Unrealized gain loss recognized on equity securities
(530)(730)(920)(5,640)
Fair value adjustment on 2025 convertible senior notes and derivative liability
725 — 725 — 
Total other income (expense)10,442 (9,363)17,415 (25,283)
Loss before income taxes(93,384)(149,342)$(296,208)$(377,392)
Provision for income taxes(1,835)— (2,173)— 
Net loss$(95,219)$(149,342)$(298,381)$(377,392)
Net loss per common share
Net loss per share attributable to Class A and Class B Common stock- Basic and Diluted$(0.28)$(0.49)$(0.89)$(1.26)
Weighted average shares outstanding
Weighted average Class A and Class B Common shares outstanding- Basic and Diluted343,101,845 303,224,595 333,387,699 299,462,065 

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Fisker Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands, except share data)
(Unaudited)

 Class A
Common Stock		Class B
Common Stock		Additional
Paid-in
Capital 		Accumulated
Deficit 		Stockholders’
Deficit
Three Months Ended September 30, 2023SharesAmountSharesAmount
Balance at June 30, 2023210,179,237 $2 132,354,128 $1 $1,794,327 $(1,369,903)$424,427 
Stock-based compensation— — — — 6,126 — 6,126 
Exercise of stock options and issuance of restricted stock unit awards, net of statutory tax withholdings168,448 — — — 27 — 27 
Share issued under “At-the-market” offering, net of stock issuance costs
— — — — (17)— (17)
Conversion of 2025 Convertible Senior Notes538,175 — — — 3,000 — 3,000 
Net loss— — — — — (95,219)(95,219)
Balance at September 30, 2023210,885,860 $2 132,354,128 $1 $1,803,463 $(1,465,122)$338,344 


 Class A
Common Stock		Class B
Common Stock		Additional
Paid-in
Capital 		Receivable for stock issuanceAccumulated
Deficit 		Stockholders’
Deficit
Nine Months Ended September 30, 2023SharesAmountSharesAmount
Balance at December 31, 2022187,599,812 $2 132,354,128 $1 $1,650,196 $(2,953)$(1,166,741)$480,505 
Stock-based compensation— — — — 13,510 — — 13,510 
Exercise of stock options and issuance of restricted stock unit awards, net of statutory tax withholdings1,594,719 — — — 53 — — 53 
Recognition of Magna warrants— — — — 6,000 — — 6,000 
Shares issued under “At-the-market” offering, net of stock issuance costs
21,153,154 — — — 130,704 2,953 — 133,657 
Conversion of 2025 Convertible Senior Notes538,175 — — — 3,000 — — 3,000 
Net loss— — — — — — (298,381)(298,381)
Balance at September 30, 2023210,885,860 $2 132,354,128 $1 $1,803,463 $— $(1,465,122)$338,344 




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 Class A
Common Stock		Class B
Common Stock		Additional
Paid-in
Capital 		Accumulated
Deficit 		Stockholders’
Deficit
Three Months Ended September 30, 2022Shares AmountSharesAmount
Balance at June 30, 2022166,279,680 $2 132,354,128 $1 $1,453,662 $(847,295)$606,370 
Stock-based compensation— — — — 11,166 — 11,166 
Exercise of stock options and issuance of restricted stock unit awards, net of statutory tax withholdings110,279 — — — 41 — 41 
Recognition of Magna warrants— — — — 6,695 — 6,695 
Shares issued under "At-the-market" offering, net of stock issuance costs13,103,208 — — — 115,758 — 115,758 
Net Loss— — — — — (149,342)(149,342)
Balance at September 30, 2022179,493,167 $2 132,354,128 $1 $1,587,322 $(996,637)$590,688 
 Class A
Common Stock		Class B
Common Stock		Additional
Paid-in
Capital 		Accumulated
Deficit 		Stockholders’
Deficit
Nine Months Ended September 30, 2022Shares AmountSharesAmount
Balance at December 31, 2021164,377,306 $2 132,354,128 $1 $1,419,284 $(619,245)$800,042 
Stock-based compensation— — — — 17,426 — 17,426 
Exercise of stock options and issuance of restricted stock unit awards, net of statutory tax withholdings624,502 — — — 556 — 556 
Recognition of Magna warrants— — — — 20,084 — 20,084 
Shares issued under "At-the-market" offering, net of stock issuance costs14,491,359 — — — 129,972 — 129,972 
Net Loss— — — — — (377,392)(377,392)
Balance at September 30, 2022179,493,167 $2 132,354,128 $1 $1,587,322 $(996,637)$590,688 

The accompanying notes are an integral part of these condensed consolidated financial statements.


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Fisker Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands, except share data)
(Unaudited)
Nine Months Ended September 30,
20232022
Cash Flows from Operating Activities:
Net loss$(298,381)$(377,392)
Reconciliation of net loss to net cash used in operating activities:
Stock-based compensation expense13,460 17,426 
Depreciation and amortization61,452 1,212 
Amortization of right-of-use asset6,923 3,054 
Accretion of debt issuance costs1,296 1,047 
Change in fair value of 2025 convertible senior notes and derivative liability(725)— 
Unrealized loss recognized on equity securities920 5,640 
Unrealized foreign currency (gain)/loss(15,385)13,301 
Changes in operating assets and liabilities:
Inventory(541,378)— 
Prepaid expenses and other assets(217,084)(12,942)
Accounts payable and accrued expenses487,956 2,319 
Customer deposits1,025 7,853 
Change in operating lease liabilities(17,659)(2,948)
Net cash used in operating activities(517,580)(341,430)
Cash Flows from Investing Activities:
Acquisition of equity investment— (10,000)
Funding of notes receivable(7,700)— 
Purchases of property and equipment and intangible asset(169,985)(157,256)
Net cash used in investing activities(177,685)(167,256)
Cash Flows from Financing Activities:
Proceeds from the issuance of convertible notes450,000 — 
Proceeds from the exercise of stock options2,820 2,146 
Payments for statutory withholding taxes(2,768)(1,436)
Proceeds from stock issuance under "At-the-market" offering135,928 132,538 
Payments for "At-the-market" issuance costs(1,868)(2,305)
Net cash provided by financing activities584,112 130,943 
Net decrease in cash and cash equivalents(111,153)(377,743)
Cash and cash equivalents, beginning of the period736,549 1,202,439 
Cash, cash equivalents and restricted cash, end of the period $625,396 $824,696 
Supplemental disclosure of cash flow information
Cash paid for interest$16,688 $17,985 
Cash paid for income taxes$191 $— 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Fisker Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(In thousands, except share data)
(Unaudited)
1. Overview of the Company
Fisker was originally incorporated in the State of Delaware on October 13, 2017 as a special purpose acquisition company under the name Spartan Energy Acquisition Corp. for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses. Spartan completed its initial public offering in August 2018. On October 29, 2020, Spartan’s wholly-owned subsidiary merged with and into Fisker Holdings Inc. (f/k/a Fisker Inc.), a Delaware corporation (“Legacy Fisker”), with Fisker Holdings Inc. surviving the merger as a wholly-owned subsidiary of Spartan (the “Business Combination”). In connection with the Business Combination, Spartan changed its name to Fisker Inc.
Legacy Fisker was incorporated in the State of Delaware on September 21, 2016. In connection with its formation, the Company entered into stock purchase agreements with the Company’s founders, whereby the founders contributed certain intellectual property (primarily trademarks) and interests in Platinum IPR LLC. Platinum IPR LLC was an entity solely owned by the Company’s founders, which held Fisker trademarks registered in a variety of jurisdictions around the world. The founders’ transfer of its interest in Platinum IPR LLC and the transfer of trademarks was accounted for as a transfer of assets between entities under common control. The carrying amount of the transferred assets is recorded based on the prior carrying value, which was de minimis.
The Company’s common stock is listed on the NYSE under the symbol “FSR”. The Company’s warrants previously traded on the NYSE under the symbol “FSR WS” and on April 19, 2021, the NYSE filed a Form 25-NSE with respect to the warrants; the formal delisting of the warrants became effective ten days thereafter.
2. Summary of Significant Accounting Policies
Basis of Presentation
The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the regulations of the SEC. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation.
Unaudited Interim Financial Statements
The condensed consolidated balance sheet as of September 30, 2023, the condensed consolidated statements of operations and the condensed consolidated statements of changes in stockholders’ equity for the nine-months ended September 30, 2023 and 2022, and the condensed consolidated statements of cash flows for the nine-months ended September 30, 2023 and 2022, as well as other information disclosed in the accompanying notes, are unaudited. The consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements as of that date. The interim condensed consolidated financial statements and the accompanying notes should be read in conjunction with the annual consolidated financial statements and the accompanying notes contained in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023.
Comprehensive loss is not separately presented as the amounts are equal to net loss for the three and nine-months ended September 30, 2023 and 2022.
The interim condensed consolidated financial statements and the accompanying notes have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The condensed consolidated financial statements for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future years or interim periods.
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Going Concern, Liquidity and Capital Resources

The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern over the next twelve months from the date of filing this report. As of September 30, 2023, the Company had approximately $527.4 million in unrestricted cash and cash equivalents. The Company believes that substantial doubt about its ability to continue as a going concern does not exist as its cash on hand will be sufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of the filing of this Form 10-Q.

Prior to the third quarter of 2023, the Company did not generate any significant revenue from its core business operations and has incurred significant accumulated losses of approximately $1.5 billion. The Company expects to continue to incur operating losses for the foreseeable future. The Company expects its capital expenditures and working capital requirements to increase during the remaining months of 2023 and beyond, as it continues serial production of the Fisker Ocean, develops its customer support and marketing infrastructure and expands its research and development efforts. The Company has raised additional cash resources from the issuance of senior convertible notes on July 11, 2023 and September 29, 2023 with net proceeds of $445.1 million (Refer to Note 18, Subsequent Event, for information regarding covenant compliance related to these notes and impact on balance sheet classification). This will be used to fund its operations until it achieves a level of production and sales that provide for operating profitability. To the extent that Fisker’s current resources are insufficient to satisfy its cash requirements, which may result from a reduction in consumer demand or a slower than expected ramp in production due to unavailability of parts from significant suppliers, the Company may need to seek additional equity or debt financing and there can be no assurance that the Company will be successful in its efforts. If the financing is not available, or if the terms of financing are less desirable than the Company expects, the Company may be forced to decrease its planned level of investment in product development or scale back its operations, including production of the Fisker Ocean, which could have an adverse impact on its business and financial prospects.
Supplier Risk
During the third quarter of 2023, suppliers ramped production of components for serial production of vehicles, which are assembled in Austria. As of September 30, 2023, these supplier contracts do not represent unconditional purchase obligations with take-or-pay or specified minimum quantities provisions. The Company has secured battery capacity with a supplier located in China for the Fisker Ocean SUV. Under the terms of the agreement, from 2023 through 2025, the battery supplier will deliver two different battery solutions for the Fisker Ocean SUV, with an initial battery capacity of over 5 gigawatt-hours annually.

We are dependent on our suppliers, including single source suppliers, for the production of the Fisker Ocean SUV. The inability of these suppliers to deliver necessary components of our products in a timely manner at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage these components from these suppliers, could have a material adverse effect on our business, prospects, financial condition and operating results.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP required management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the condensed consolidated financial statements and accompanying notes. The Company bases these estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates.
Restricted Cash
Cash and cash equivalents that is restricted is primarily related to letters of credit issued to a supplier. The Company’s restricted cash balance was $98.0 million as of September 30, 2023. Cash and cash equivalents were unrestricted as of December 31, 2022.
Revenue from Contracts with Customers
The Company follows a five-step process in which (i) a contract is identified, (ii) the related performance obligations are identified, (iii) the transaction price is determined, (iv) the transaction price is allocated to the identified
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performance obligations, and (v) revenue is recognized when (or as) performance obligations are satisfied. The Company’s revenue is primarily generated from the sale of electric vehicles and accessories to customers, as well as specific services that meet the definition of a performance obligation under ASC 606, including over-the-air ( “OTA”) software updates as they become available. Revenue recognized from the sale of the Fisker Ocean during the three and nine-months ended September 30, 2023 was $71.6 million and $72.3 million, respectively.
The Company recognizes revenue related to the vehicles at a point in time when the customer obtains control of the vehicle either upon completion of delivery or upon pick up of the vehicle by the customer. As the Company has a stand-ready obligation to deliver unspecified OTA software updates when-and-if they become available, the Company recognizes revenue from the OTA software updates ratably over the basic vehicle warranty term, commencing when control of the vehicles is transferred to the customer. We also defer revenue from specific services that meet the definition of a performance obligation including premium connectivity and roadside assistance. We also recognize a sales return reserve estimate.
Any fees that are paid or payable by the Company to a customer’s lender when financing is arranged are recognized as an offset to vehicles sales. Shipping and handling is considered a fulfillment activity. Sales taxes collected from customers are excluded from the transaction price of electric vehicle contracts.
Payment for EV sales is typically received at or prior to delivery, or according to agreed upon payment terms. The standalone selling prices of all performance obligations are estimated by considering costs to develop and deliver the good or service, third-party pricing of similar goods or services and other information that may be available. The transaction price is allocated among the performance obligations in proportion to the standalone selling price of each performance obligation.
Deferred revenue is the total transaction price allocated to unsatisfied, or partially unsatisfied performance obligations as of the balance sheet date. This is primarily relates to undelivered OTA software updates. Deferred revenue was immaterial as of September 30, 2023.
Other revenue consists of sales of merchandise and home charging solutions.

Cost of Revenues
Cost of revenues primarily relates to the cost of production of vehicles and includes direct parts, material and labor costs, machinery and tooling depreciation, amortization of capitalized manufacturing costs, shipping and logistics costs, reserves for estimated warranty costs related to the production of vehicles, adjustments related to write down the carrying value of inventory when it exceeds its estimated net realizable value (“NRV”) as needed, adjustments for excess and obsolete inventory, adjustments associated with lower levels of production during the ramp-up phase, and losses on firm purchase commitments, as needed.
Fair Value Measurements
The Company follows the accounting guidance in ASC 820 Fair Value Measurement (“ASC 820”), for its fair value measurements of financial assets and liabilities measured at fair value on a recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.
The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace.
Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
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The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Fair Value Option
Under the ASC 825-10, Financial Instruments - Overall, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument-by-instrument basis. The Company elected the fair value option to account for the 2025 convertible senior notes due to the embedded derivative that would require bifurcation and separate accounting if the fair value option was not elected. Also the Company believes the fair value option provides users of the financial statements with greater ability to estimate the outcome of future events as facts and circumstances change, particularly with respect to changes in the fair value of the Common Stock underlying the conversion and redemption features (See Note 12). The fair value of the 2025 convertible senior notes is estimated based on a discounted cash flow model and a Monte Carlo simulation, which represent Level 3 measurements. Significant assumptions include the discount rate, the expected premium for conversion, and expected volatility. The 2025 convertible senior notes are presented at fair value in the Condensed Consolidated Balance Sheet, with changes in fair value recognized in Fair value adjustment on 2025 convertible senior notes and derivative liability on the Condensed Consolidated Statements of Operations. There were no changes in fair value attributable to instrument-specific credit risk during the period associated with the 2025 convertible senior notes.

Derivative Instruments
The Company’s only derivative instrument related to the investor’s rights to purchase additional convertible senior notes is described in detail in Note 12. The Investor’s call option is accounted for as a derivative liability on the Condensed Consolidated Balance Sheet at its fair value, with changes in fair value recognized in Fair value adjustment on 2025 convertible senior notes and derivative liability on the Condensed Consolidated Statements of Operations. The Company uses a Monte Carlo Simulation Model to determine the fair value of this derivative instrument.
Inventory Valuation
Inventories are stated at the lower of cost or net realizable value and consists of raw materials, work in progress and finished goods. Inventory value is determined using standard cost, which approximates actual cost on a first-in, first-out basis. The Company records inventory write-downs for excess or obsolete inventories based upon assumptions about current and future demand forecasts. If inventory on-hand is in excess of future demand forecast, the excess amounts are written-off.
Inventory is also reviewed to determine whether its carrying value exceeds the net amount realizable upon the ultimate sale of the inventory. This requires an assessment to determine the selling price of the vehicles less the estimated cost to convert the inventory on-hand into a finished product. Once inventory is written down, a new, lower cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. In the event there are changes in our estimates of future selling prices or production costs, additional and potentially material write-downs may be required.

Long-Lived Assets
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the related assets as follows:

Useful Life (in years)
Tooling
3-8
Machinery and equipment
5-15
Furniture and fixtures
5-10
IT hardware and software
3-10
Leasehold improvementsShorter of their estimated life or remaining lease term
Construction in progress is comprised primarily of costs incurred to construct serial production tooling located at affiliates of Magna and our suppliers.
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Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the term of the related lease. Upon retirement or sale, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repair expenditures are expensed as incurred, while major improvements that increase functionality of the asset are capitalized and depreciated ratably to expense over the identified useful life.
Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset group to its carrying amount. The Company assesses impairment for asset groups, which represent a combination of assets that produce distinguishable cash flows. If the carrying amount of the asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. The Company has not recorded any impairment charges during the periods presented.
Income Taxes
Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
There are transactions that occur during the ordinary course of business for which the ultimate tax determination is uncertain. As of September 30, 2023, there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the year ended December 31, 2022.
The Company’s income tax provision consists of an estimate for U.S. federal, foreign and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. The Company maintains a valuation allowance against the full value of its U.S. and state net deferred tax assets because the Company believes the recoverability of the tax assets is not more likely than not as of September 30, 2023.
Equity Awards
The grant date for an option or stock award is established when the grantee has a mutual understanding of the key terms and conditions of the option or award, the award is authorized, including all the necessary approvals unless approval is essentially a formality or perfunctory, and the grantee begins to benefit from, or be adversely affected by, underlying changes in the price of the Company’s Class A common shares. An award or option is authorized on the date that all approval requirements are completed (e.g., action by the compensation committee approving the award and the number of options, restricted shares or other equity instruments to be issued to individual employees).
Net Loss per Share of Common Stock
Basic net loss per share of common stock is calculated using the two-class method under which earnings are allocated to both common shares and participating securities. Undistributed net losses are allocated entirely to common shareholders since the participating security has no contractual obligation to share in the losses. Basic net loss per share is calculated by dividing the net loss attributable to common shares by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share of common stock is computed by dividing the net loss using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of stock-based compensation awards and warrants to purchase common stock (using the treasury stock method).

Foreign Currency Remeasurement and Transactions
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The functional currency of the Company’s foreign subsidiaries is the U.S. Dollar. For these subsidiaries, monetary assets and liabilities denominated in non-U.S. currencies are re-measured to U.S. Dollars using current exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities denominated in non-U.S. currencies are maintained at historical U.S. Dollar exchange rates. Expenses are re-measured at average U.S. Dollar monthly rates.

Foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in currencies other than the functional currency. Transaction gains and losses are immaterial for all periods presented.
In April and July 2022, the Company purchased 130.1 million Euros for $140.0 million U.S. dollars, a currency exchange rate of 1 U.S. dollar for 1.076 Euro and 50.0 million Euros for $50.9 million U.S. dollars, a currency exchange rate of 1 U.S. dollar for 1.018 Euro, which are designed to provide an economic hedge against future foreign currency exposures. As of September 30, 2023, the Company has fully utilized these funds for research and development and production of Ocean and future projects.

3. Fair Value Measurements
The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (in thousands):
Fair Value Measured as of September 30, 2023:
Level 1Level 2Level 3Total
Assets included in:    
Money market funds included in cash and cash equivalents$329,771 $— $— $329,771 
Equity investment2,220 — — 2,220 
Total fair value$331,991 $— $— $331,991 
Liabilities included in:
2025 convertible senior notes and derivative liability$— $— $446,275 $446,275 
Total fair value$— $— $446,275 $446,275 
Fair Value Measured as of December 31, 2022:
Level 1Level 2Level 3Total
Assets included in:    
Money market funds included in cash and cash equivalents$601,045 $— $— $601,045 
Equity investment3,140 — — 3,140 
Total fair value$604,185 $— $— $604,185 
The fair value of the Company’s money market funds is determined using quoted market prices in active markets for identical assets. The carrying amounts included in the Condensed Consolidated Balance Sheets under Current assets approximate fair value because of the short maturity of these instruments.
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On July 28, 2021, the Company made a commitment for a private investment in public equity (PIPE) supporting the planned merger of European EV charging network, Allego B.V. (“Allego”) with Spartan Acquisition Corp. III (NYSE: SPAQ), a publicly-listed special purpose acquisition company. Fisker Inc. was the exclusive electric vehicle automaker in the PIPE and, in parallel, Allego agreed to terms to deliver a range of charging options for Fisker customers in Europe. On March 16, 2022, the merger closed and the Company delivered cash of $10.0 million in exchange for 1,000,000 shares of Allego's Class A common stock (NYSE: ALLG). The Company’s ownership percentage is less than 5% and does not result in significant influence. The Company has classified its equity investment in Allego as a current asset. For equity securities still held as of September 30, 2023, unrealized losses recognized during the three-months ended September 30, 2023 totaled $0.5 million and unrealized losses recognized during the nine-months ended September 30, 2023 totaled $0.9 million, as shown separately in the Condensed Consolidated Statement of Operations.
In August 2021, the Company issued convertible senior notes due in 2026. We carry the convertible senior notes at face value less the unamortized debt issuance costs on our consolidated balance sheets and present the fair value for disclosure purposes only. As of September 30, 2023, the fair value of the 2026 Notes was $214.8 million compared to its fair value of $309.8 million as of December 31, 2022. The estimated fair value of the convertible notes, which are classified as Level 2 financial instruments, was determined based on the estimated or actual bid prices of the convertible notes in an over-the-counter market on the last business day of the period.
The fair value of the 2025 convertible senior notes is estimated based on a discounted cash flow model and a Monte Carlo simulation, which represent Level 3 measurements.
Refer to Note 12 for additional information regarding the convertible notes issued by the Company.
4. Inventory
Inventory consists of the following as of September 30, 2023 and December 31, 2022 (in thousands):

As of September 30, 2023As of December 31, 2022
Raw materials$268,063 $698 
Work in progress20,973 — 
Finished goods
256,617 3,578 
Total$545,653 $4,276 
Inventory was comprised of raw materials, work in progress related to the production of vehicles for sale and finished goods inventory including new vehicles available for sale. Expenditure related to services performed subsequent to the start of production of salable vehicles are expensed as incurred in cost of revenues in the Condensed Consolidated Statements of Operations.
The Company writes-down inventory for any excess or obsolete inventories or when we believe the net realizable value of inventories is less than the carrying value. The Company recorded an obsolescence reserve on inventories of $0.9 million for the three and nine months ended September 30, 2023. Fixed production overhead costs are allocated to inventory based on the normal capacity of the production facility. The Company recorded a $18.2 million inventory valuation adjustment in cost of revenues in the three months ended September 30, 2023, due to the ramp up in production which impacted the allocation of fixed production overhead costs.
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5. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following as of September 30, 2023 and December 31, 2022 (in thousands):
As of September 30, 2023As of December 31, 2022
Advanced payments to suppliers$166,719 $27,218 
Value-added tax receivables50,547 27,928 
Prepaid insurance9,904 2,951 
Prepaid and other current assets47,221 29,392 
$274,391 $87,489 
The Company paid value-added taxes on certain capital expenditures and submitted requests for refunds from tax authorities in foreign countries with a concentration in Europe that are pending repayment as of September 30, 2023 and December 31, 2022. Prepaid and other current assets include payments to certain suppliers in advance of production.

6. Intangible Assets
The Company has the following intangible assets (in thousands):
As of September 30, 2023
 Amortization PeriodGross
Carrying
Amount		Accumulated
Amortization		Net
Capitalized cost - manufacturing8 years$258,304 $(29,485)$228,819 
  $258,304 $(29,485)$228,819 
 
As of December 31, 2022
 Amortization
Period		Gross
Carrying
Amount		Accumulated
Amortization		Net
Capitalized cost - manufacturing8 years$252,304 $(5,382)$246,922 
  $252,304 $(5,382)$246,922 
The Company commenced amortization in the fourth quarter of 2022 of capitalized licensing costs associated with the manufacturing of the Fisker Ocean and production parts, and for warrants granted to Magna International, Inc. (“Magna”). The Company expects to amortize the intangible asset over eight years but will continually assess the reasonableness of the estimated life. Refer to Note 13 for additional information regarding the capitalization of costs upon issuance of warrants to Magna.
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7. Property and Equipment, Net
Property and equipment, net, consists of the following (in thousands):
 
As of September 30, 2023
As of December 31, 2022
Tooling$450,157 $— 
Machinery and equipment135,559 9,298 
Furniture and fixtures1,553 470 
IT hardware and software13,023 6,427 
Leasehold improvements647 634 
Construction in progress3,157 372,789 
Total property and equipment604,096 389,618 
Less: Accumulated depreciation and amortization(37,348)(2,481)
Property and equipment, net$566,748 $387,137 
Construction in progress is comprised primarily of costs incurred to construct serial production tooling located at affiliates of Magna and our suppliers. Assets of $450.2 million that are ready for their intended use have changed categories from Construction in progress to Tooling during the nine-months ended September 30, 2023. Assets of $101.3 million have also changed categories from Construction in progress to Machinery and equipment during the nine-months ended September 30, 2023.
As of September 30, 2023, accounts payable and accrued expenses includes acquired property and equipment of $191.8 million compared to $144.8 million as of December 31, 2022, which is excluded from net cash used in investing activities as reported in the condensed consolidated statement of cash flows for the nine-months ended September 30, 2023.


8. Leases

The Company has entered into various operating lease agreements and a finance lease agreement for certain office space, manufacturing and warehouse facilities, retail and customer services locations, equipment, and vehicles. We determine whether a contractual arrangement is or contains a lease, including embedded leases, at inception and record the lease when the underlying assets is made available for us by the lessor, or the date of commencement. At lease commencement, the Company measures the lease liability at the present value of lease payments not yet paid. For purposes of calculating lease liabilities, lease terms include options to extend or renew the lease when it is reasonably certain that we will exercise such options. Certain operating leases provide for annual increases to lease payments based on an index or rate. Lease expense for finance lease payments is recognized as amortization expense of the finance lease right-of-use asset over the lease term.

Operating leases

During the nine-months ended September 30, 2023 and year ended December 31, 2022, the Company recorded non-cash lease right-of-use assets of $49.1 million and $33.4 million and non-cash lease liabilities of $37.9 million and $35.0 million, respectively, on its consolidated balance sheet.


The table below presents information regarding the Company’s lease assets and liabilities (in thousands):

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 As of September 30, 2023As of December 31, 2022
Assets:
     Operating lease right-of-use assets$78,739 $33,424 
Liabilities:
     Operating lease — current$17,825 $7,085 
     Operating lease — long-term$51,723 $27,884 


The components of lease related expense are as follows (in thousands):

Three-months ended September 30,
 20232022
Lease costs
Operating lease expense$3,946 $1,432 
Short-term lease expense454 53 
Total lease costs$4,400 $1,485 

Nine-months ended September 30,
 20232022
Lease costs
     Operating lease expense$8,904 $3,957 
     Short-term lease expense$632 170 
Total lease costs$9,536 $4,127 
Operating and short-term lease related expenses are included in selling, general and administrative expense on the Condensed Consolidated Statement of Operations.

Other information related to operating leases is as follows:

 As of September 30, 2023As of December 31, 2022
Weighted average remaining lease term (in years)4.53.6
Weighted average discount rate8.76 %5.27 %

The components of supplemental cash flow information related to leases are as follows (in thousands):

Nine months ended September 30,
 20232022
Cash flow information:
     Cash paid for amounts included in the measurement of lease liabilities:
          Operating cash flows used by operating leases$10,300 $2,412 
     Non-cash activity:
          ROU asset obtained in exchange for operating lease obligations$52,297 $12,501 


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As of September 30, 2023, future minimum payments of our operating lease liabilities during the next five years and thereafter are as follows (in thousands):

Operating Leases
Year ending December 31, 2023$4,407 
Year ending December 31, 2024$18,697 
Year ending December 31, 2025$17,653 
Year ending December 31, 2026$16,832 
Year ending December 31, 2027$9,382 
Thereafter$20,982 
     Total$87,953 
Less: present value discount(18,405)
Total lease costs$69,548 

The Company’s lease agreements do not provide an implicit rate, so the Company used an estimated incremental borrowing rate, which was derived from third-party information available at lease inception, in determining the present value of lease payments. The rate used is for a secured borrowing of a similar term as the lease.

Finance leases

During 2023 the Company recorded embedded finance lease right-of-use assets of $24.1 million on its consolidated balance sheet, related to certain equipment and tooling that is controlled and used by the Company for vehicle manufacturing. The Company paid for a majority of the costs during 2022 with a remaining liability of $10.0 million as of September 30, 2023 to be paid in 2023. Amortization of right-of-use assets totaled $0.8 million for the nine-months ended September 30, 2023 and future amortization of embedded finance lease right-of-use assets will be recognized over a lease term of approximately 8 years. The Company did not have any finance leases during 2022. As of September 30, 2023, the embedded finance lease right-of-use assets, totaling $25.6 million and lease liabilities from finance leases are included in other non-current assets and accrued expenses on the balance sheet.
9. Accrued Expenses
A summary of the components of accrued expenses is as follows (in thousands):
 September 30, 2023December 31, 2022
Accrued vendor liabilities$347,683 $251,291 
Advance payments from customers27,404 — 
Order deposits3,510 4,860 
Accrued interest695 4,867 
Accrued professional fees3,435 1,145 
Accrued payroll2,619 1,627 
Accrued other13,613 1,135 
Total accrued expenses$398,959 $264,925 
Accrued vendor liabilities include amounts owed to vendors but not yet invoiced in exchange for vendor purchases, inventory purchases, and research and development services. Certain estimates of accrued vendor expenses are based on costs incurred to date.
Order Deposits

In the third quarter of 2022, the Company began accepting order deposits of $5,000 USD or equivalent currency (Order Deposits) for Fisker Ocean Ones, a limited-edition trim level of the Fisker Ocean. The Company also converted customer deposits for reservation holders who previously made a deposit for an Extreme, Ultra or Sport Ocean prior to
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August 16, 2022, the enactment date of the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”). Order deposits will be applied to the sales price of the vehicle and recognized as revenue when the vehicle is sold and delivered to the customer. Order Deposits are not included in customer deposits.

On July 1, 2022, the Company entered into a contract for global payment processing agreement with JPMorgan Chase Bank, N.A. (“Chase”). Order Deposits paid directly to the Company via ACH or other direct payment mechanisms are received in the Company’s bank account and available for its use in the subsequent month after the month in which the Order Deposits were placed. For Order Deposits made through credit card transactions, Chase holds cash received from customers until the vehicle is delivered to the customer at which time the cash is deposited into the Company’s bank account and available for its use. Cash received from Order Deposits and the conversion of any customer deposit into an Order Deposit results in the recognition of a contract liability. As of September 30, 2023 and December 31, 2022 contract liabilities for Order Deposits totaled $3.5 million and $4.9 million, respectively.


Advance Payments from Customers

Customer payments received in advance of vehicle delivery, a recognized contract liability, totaled $27.4 million as of September 30, 2023. There were no customer payments received in advance of vehicle delivery as of December 31, 2022.

Revenue recognized during the three months ended September 30 2023, that was included in the contract liability balance at June 30, 2023 totaled $12.7 million. Revenue recognized during the nine months ended September 30, 2023 that was included in the contract liability balance at December 31, 2022 was $0.6 million.

10. Customer Deposits
Customer deposits consists of the following (in thousands):
 September 30, 2023December 31, 2022
Customer reservation $15,816 $14,580 
Customer SUV option543 754 
Total customer deposits$16,359 $15,334 

Customer deposits consist of reservations, which represent cash received for the future right (e.g., a reservation) to order a Fisker Ocean, PEAR, Alaska or Ronin. Each reservation requires a deposit that ranges from $100 USD or equivalent currency to $2,000 USD or equivalent currency.



11. Unconsolidated Variable Interest Entity

The Company holds a variable interest in an automotive-related entity to which we provide financial assistance to support our production needs. Our variable interest in the entity is a note receivable with face value of $7.7 million, and a carrying amount of $4.5 million as of September 30, 2023, net of expected credit losses, which is included in Other non-current assets on the Company’s Condensed Consolidated Balance Sheet. Our maximum exposure to loss as of September 30, 2023 including the undrawn amount on the note receivable was $10.0 million. However, given our commitment to fund possible future tranches, this would result in an additional $8.0 million, for an aggregate maximum exposure of $18.0 million.

We are not the primary beneficiary of the variable interest entity (“VIE”) as we lack the power to direct the activities that most significantly impact the entities’ economic performance. Therefore, we do not consolidate the VIE under the variable interest model.
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12. Convertible Senior Notes
2026 Notes
In August 2021, we issued an aggregate of $667.5 million principal amount of 2.50% convertible senior notes due in September 2026 (the “2026 Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2026 Notes have been designated as green bonds, whose proceeds will be allocated in accordance with the Company’s green bond framework. The 2026 Notes consisted of a $625.0 million initial placement and an over-allotment option that provided the initial purchasers of the 2026 Notes with the option to purchase an additional $100.0 million aggregate principal amount of the 2026 Notes, of which $42.5 million was exercised. The 2026 Notes were issued pursuant to an indenture dated August 17, 2021. The net proceeds from the issuance of the 2026 Notes were $562.2 million net of debt issuance costs and cash used to purchase the capped call transactions (“2026 Capped Call Transactions”) discussed below. The debt issuance costs are amortized to interest expense.
The 2026 Notes are unsecured obligations which bear regular interest at 2.50% annually and are payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2022. The 2026 Notes will mature on September 15, 2026, unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The 2026 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 50.7743 shares of Class A common stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $19.70 per share of our Class A common stock. The conversion rate is subject to customary adjustments for certain events as described in the indenture governing the 2026 Notes. We may redeem for cash all or any portion of the 2026 Notes, at our option, on or after September 20, 2024 if the last reported sale price of our Class A common stock has been at least 130% of the conversion price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
Holders of the 2026 Notes may convert all or a portion of their 2026 Notes at their option prior to June 15, 2026, in multiples of $1,000 principal amounts, only under the following circumstances:
•during any calendar quarter commencing after the calendar quarter ending on September 30, 2021 (and only during such calendar quarter), if the last reported sale price of the Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
•during the five-business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A common stock and the applicable conversion rate of the 2026 Notes on such trading day;
•if we call such 2026 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the notes called (or deemed called) for redemption; or
•on the occurrence of specified corporate events.
On or after June 15, 2026, the 2026 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Holders of the 2026 Notes who convert the 2026 Notes in connection with a make-whole fundamental change, as defined in the indenture governing the 2026 Notes, or in connection with a redemption may be entitled to an increase in the conversion rate. Additionally, in the event of a fundamental change, holders of the 2026 Notes may require us to repurchase all or a portion of the 2026 Notes at a price equal to 100% of the principal amount of 2026 Notes, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
We accounted for the issuance of the 2026 Notes as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives.
As of September 30, 2023 and December 31, 2022, the 2026 Notes consisted of the following (in thousands):
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 September 30, 2023December 31, 2022
Convertible Senior 2026 Notes
Principal amount
667,500 667,500 
Unamortized debt issuance costs and debt discount
(5,382)(6,678)
Net carrying amount
662,118 660,822 
Interest expense related to the amortization of debt issuance costs for the three and nine-months ended September 30, 2023 was $0.5 million and $1.3 million, respectively. Contractual interest expense for the three and nine-months ended September 30, 2023 was $4.2 million and $12.5 million, respectively.
As of September 30, 2023, the if-converted value of the 2026 Notes did not exceed the principal amount. The 2026 Notes were not eligible for conversion as of September 30, 2023. No sinking fund is provided for the 2026 Notes, which means that we are not required to redeem or retire them periodically.
Capped Call Transactions
In connection with the offering of the 2026 Notes, we entered into the 2026 Capped Call Transactions with certain counterparties at a net cost of $96.8 million. The 2026 Capped Call Transactions are purchased capped call options on 33.9 million shares Class A common stock, that, if exercised, can be net share settled, net cash settled, or settled in a combination of cash or shares consistent with the settlement elections made with respect to the 2026 Notes if converted. The cap price is initially $32.57 per share of our Class A common stock and subject to certain adjustments under the terms of the 2026 Capped Call Transactions. The strike price is initially $19.70 per share of Class A common stock, subject to customary anti-dilution adjustments that mirror corresponding adjustments for the 2026 Notes.
The 2026 Capped Call Transactions are intended to reduce potential dilution to holders of our Class A common stock upon conversion of the 2026 Notes and/or offset any cash payments we are required to make in excess of the principal amount, as the case may be, with such reduction or offset subject to a cap. The cost of the Capped Call Transactions was recorded as a reduction of our additional paid-in capital in our consolidated balance sheets. The Capped Call Transactions will not be remeasured as long as they continue to meet the conditions for equity classification.

Senior Convertible Notes Due 2025

On July 10, 2023, the Company entered into the Securities Purchase Agreement (the “Original Purchase Agreement”) with an institutional investor pursuant to which the Company sold, and the Investor purchased, $340 million in aggregate principal amount of 0% senior convertible notes due in 2025 (the “Series A-1 Notes”) in a registered direct offering. The Series A-1 Notes were sold at an original issue discount of approximately twelve percent (12%) resulting in gross proceeds to the Company of $300 million.

Pursuant to the terms of the Original Purchase Agreement, during the six-month period beginning on the one-year anniversary of the issuance of the Series A-1 Notes and ending on the eighteen-month anniversary of the issuance of the Series A-1 Notes, the Investor could purchase up to an additional $226.7 million in aggregate principal amount of senior convertible notes due two years after the date of issuance (the “Investor AIR Notes”) in one or more registered direct offerings. If the Investor elected, during the AIR Period, to purchase the full amount of Investor AIR Notes, the Company could, at its option, require the Investor to purchase up to an additional $113.3 million in aggregate principal amount of senior convertible notes due 2 years after the date of issuance (the “Issuer AIR Notes” and, together with the Investor AIR Notes, the “Additional Notes”).

On September 29, 2023, the Company and the Investor entered into Amendment No. 1 to the Original Purchase Agreement the “Purchase Agreement Amendment”), in order to:
•Increase the aggregate principal amount of Investor AIR Notes available for purchase to $566.7 million, to be purchased at any time after (A) with respect to the initial $170.0 million of Investor AIR Notes, September 27, 2023, (B) with respect to the next $226.7 million of Investor AIR Notes, December 29, 2023 or (C) with respect to the remaining $170.0 million of Investor AIR Notes, March 29, 2024;
•Extend the Investor’s right to effect a closing of Investor AIR Notes to March 29, 2026;
•Increase the aggregate principal amount of Issuer AIR Notes to $226.7 million;
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•Increase the amount of Common Stock required to be reserved by the Company prior to obtaining the stockholder approval described below to 782,000,000 shares of Class A Common Stock; and
•Require that the Company either obtain the prior written consent of requisite stockholders or seek and obtain stockholder approval at a special meeting (in each case no later than January 31, 2024), in order to (x) approve the issuance of securities issued or issuable in an Additional Closing (as defined in the Securities Purchase Agreement) and (y) increase the authorized shares of the Company from 1,250,000,000 to 2,000,000,000. If the Company fails to obtain such approval, it will seek approval at an additional stockholder meeting on or prior to March 31, 2024 and, if necessary, semi-annually thereafter.

On September 29, 2023, pursuant to the terms of the Purchase Agreement Amendment, the Company sold, and the Investor purchased, $170.0 million of the “Series B-1 Notes” in a registered direct offering. The Series B-1 Notes were issued at an original issue discount of approximately twelve percent (12%) resulting in gross proceeds to the Company of $150.0 million.

The Series A-1 Notes and the Series B-1 Notes (collectively, the “2025 Notes”) were issued as senior obligations of the Company under an indenture dated July 11, 2023, by and between the Company and Wilmington Savings Fund Society, FSB, as the trustee, as supplemented by that certain Second Supplemental Indenture dated September 29, 2023. The Notes bear interest at the rate of 0% per annum, however, the interest rate of the Notes will automatically increase to 18% per annum (the “Default Rate”) upon the occurrence and continuance of an event of default. The Notes are subject to certain covenants, including a financial test covenant, that requires the Company to have available cash equal to or greater than $340 million at the end of each quarter. The financial test covenant was amended to require the Company to have available cash equal to or greater than $250 million at the end of each quarter. Refer to Note 18, Subsequent Event, for additional information regarding covenant compliance.

The 2025 Notes are convertible into common stock at any time, in whole or in part, at the Investor’s option at a conversion price of $5.5744 with respect to the Series A-1 Notes and $7.5986 with respect to the Series B-1 Notes. The conversion prices are subject to proportional adjustment upon the occurrence of any stock split, stock dividend, stock combination, and/or similar transactions. Additionally, the conversion prices are subject to a full-ratchet adjustment in connection with a subsequent offering at a per share price less than the fixed conversion price in effect. Furthermore, in the event of default, the 2025 Notes may be converted using an alternative conversion price equal to the lower of (i) the conversion price in effect or (ii) 80% of the average stock price preceding conversion.

The 2025 Notes amortize in nine equal installments on each three-month anniversary beginning July 11, 2023, with respect to the Series A-1 Notes and September 29, 2023 with respect to the Series B-1 Notes. The Company may elect to settle each installment in cash based on 103% of the principal amount (plus any accrued default interest or late charges) or in shares of Class A Common Stock, subject to the satisfaction of certain conditions including trading volume and continued NYSE listing requirements, priced at the lower of (i) the conversion price in effect of (ii) 93% of the average stock price preceding such settlement, subject to a floor price of $1.16 which is subject to adjustment to stock splits, dividends, combinations, or other similar events. The investor may elect to defer installments to future periods as it did during the third quarter of 2023. Refer to Note 18, Subsequent Event, for additional information regarding conversions in the fourth quarter of 2023.

The Investor’s right to purchase the Investor AIR Notes provided for in the Original Purchase Agreement, and as amended in the Purchase Agreement Amendment (a net written call option) was determined to be a separate financial instrument from the 2025 Notes issued to the Investor, as the Investor could detach and sell the 2025 Notes to other investors while retaining the rights to purchase the Investor AIR Notes. As a result, the Company concluded that the written option is required to be accounted for as a derivative liability which is required to be remeasured to fair value each balance sheet date with changes in fair value recorded in earnings. As discussed in Note 2, the Company elected the fair value option to account for the 2025 Notes, including the Series A-1 Notes. Accordingly, the $300.0 million of proceeds received were allocated to the Series A-1 Notes and the call option at their estimated fair values as of the issuance date (July 11, 2023). The Series A-1 Notes and the call option will subsequently be remeasured to their fair values at the end of each reporting period.

As the Purchase Agreement Amendment amended the terms and conditions of the investor’s call option, the Purchase Agreement Amendment was evaluated as a modification to the freestanding derivative instrument. The effect of the modified terms was recognized in the mark to market adjustment as of the three months-ended September 30, 2023. Upon issuance any Additional Notes under the Purchase Agreement, the Company expects to continue to elect to apply the fair value option .
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The fair value of the 2025 senior convertible notes and derivative liability was estimated using the Monte Carlo simulation pricing model with embedded lattice, and with the following range of assumptions:
 
Expected term (in years)1.3
Volatility
57.6% to 70.0%
Dividend yield0.0%
Risk-free interest rate
5.03% to 5.45%
Common stock price$6.42


A reconciliation of the beginning and ending balances for the Notes and the call option (derivative liability), which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows for the three and nine months ended September 30, 2023 (in thousands):

 
2025 Notes, at fair value
Fair value - December 31, 2022
$— 
Fair value - June 30, 2023
— 
Issuance of Series A-1 Notes
297,000 
Issuance of Series B-1 Notes
150,000 
Change in fair value - mark to market adjustment
(725)
Fair value - September 30, 2023
$446,275 

The fair value of the derivative liability was immaterial during the quarter and as of September 30, 2023.
13. Common Stock and Warrants
Magna Warrants
On October 29, 2020, the Company granted Magna up to 19,474,454 warrants, each with an exercise price of $0.01, to acquire underlying shares of Class A common stock of Fisker, which represented approximately 6.0% ownership in Fisker on a fully diluted basis as of the grant date. The right to exercise vested warrants expires on October 29, 2030. The warrants are accounted for as an award issued to non-employees measured on October 29, 2020 with three interrelated performance conditions that are separately evaluated for achievement.
MilestonePercentage of
Warrants that
Vest Upon
Achievement 		Number of
Warrants that
Vest Upon
Achievement
(a) (i) Achievement of the “preliminary production specification” gateway as set forth in the Development Agreement; (ii) entering into the Platform Agreement; and (iii) entering into the Initial Manufacturing Agreement33.3 %6,484,993 
(b) (i) Achievement of the “target agreement” gateway as set forth in the Development Agreement and (ii) entering into the Detailed Manufacturing Agreement, which will contain terms and conditions agreed to in the Initial Manufacturing Agreement33.3 %6,484,993 
(c) Start of pre-serial production33.4 %6,504,468 
19,474,454 
The cost upon achievement of each milestone is recognized when it is probable that a milestone will be met. The cost for awards to nonemployees is recognized in the same period and in the same manner as if the Company had paid cash for the goods or services. At September 30, 2023, the Company capitalized costs as an intangible asset representing the
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future economic benefit to Fisker Inc. For the nine-months ended September 30, 2023, the recognized cost of $3.8 million (a non-cash transaction) associated with services rendered, resulted in an increase in capitalized cost-manufacturing to $258.3 million as of September 30, 2023. The Company will continually assess the reasonableness of the estimated useful life and will assess the intangible asset for impairment. If an indicator of impairment exists, the undiscounted cash flows will be estimated. If the carrying amount of the intangible asset is not recoverable, the Company will then determine its fair value and record an impairment loss. As of September 30, 2023, no indicators of impairment exists.
The fair value of each warrant is equal to the intrinsic value (e.g., stock price on grant date less exercise price) as the exercise price is $0.01. The terms of the warrant agreement require net settlement when exercised. Using the measurement date stock price of $8.96 for a share of Class A common stock, the warrant fair values for each tranche is shown below. Capitalized cost also results in an increase to additional paid in capital equal to the fair value of the vested warrants. Awards vest when a milestone if met. Magna has 12,969,986 vested and exercisable warrants to acquire underlying Class A common stock of Fisker as of September 30, 2023, none of which are exercised.
Fair valueCapitalized at September 30, 2023
Milestone (a)$58,041 $58,041 
Milestone (b)58,041 58,041 
Milestone (c)58,215 58,215 
$174,297 $174,297 
At-the-market Equity Program
In May, 2022, we entered into an at-the-market distribution agreement dated May 24, 2022 with J.P. Morgan Securities LLC and Cowen and Company, LLC as the sales agents (the “Distribution Agreement”), pursuant to which the Company established an at-the-market equity program (the “ATM Program”). Pursuant to the ATM Program, Fisker could, at its discretion and from time to time during the term of the Distribution Agreement, sell, through the Agents, shares of its Class A Common Stock as would result in aggregate gross proceeds to the Company of up to $350 million by any method permitted by law deemed to be an “at-the-market offering” as defined in Rule 415 of the Securities Act of 1933, as amended, including without limitation sales made directly on the New York Stock Exchange, on any other existing trading market for the Class A Common Stock or to or through a market maker. In addition, the sales agents could also sell the shares of Class A Common Stock by any other method permitted by law, including, but not limited to, negotiated transactions. The Class A Common Stock sold under the ATM Program was registered with the SEC under the Company’s effective shelf registration statement that permits the Company to issue various securities for proceeds of up to $2.0 billion. The Company issued 21,153,154 shares of Class A common stock during the nine-months ended September 30, 2023 for gross proceeds of $133.1 million, before $2.0 million of commissions and other direct incremental issuance costs. Effective July 12, 2023, the Company terminated the Distribution Agreement. As a result, the Company will not offer or sell any more shares under the ATM Program.
14. Loss Per Share
The Company computes earnings (loss) per share of Class A Common Stock and Class B Common Stock using the two-class method required for participating securities. Basic and diluted earnings per share was the same for each period presented as the inclusion of all potential Class A Common Stock and Class B Common Stock outstanding would have been anti-dilutive. Basic and diluted earnings per share are the same for each class of common stock because they are
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entitled to the same liquidation and dividend rights. The following table sets forth the computation of basic and diluted loss per Class A Common Stock and Class B Common Stock:
Three-months Ended September 30,
20232022
Numerator:
Net loss$(95,219)$(149,342)
Denominator:
Weighted average Class A common shares outstanding210,747,717 170,870,467 
Weighted average Class B common shares outstanding132,354,128 132,354,128 
Weighted average Class A and Class B common shares outstanding- Basic and Diluted343,101,845 303,224,595 
Net loss per share attributable to Class A and Class B Common shareholders- Basic and Diluted$(0.28)$(0.49)

Nine Months Ended September 30,
20232022
Numerator:
Net loss$(298,381)$(377,392)
Denominator:
Weighted average Class A common shares outstanding201,033,571 167,107,937 
Weighted average Class B common shares outstanding132,354,128 132,354,128 
Weighted average Class A and Class B common shares outstanding- Basic and Diluted333,387,699 299,462,065 
Net loss per share attributable to Class A and Class B Common shareholders- Basic and Diluted(0.89)$(1.26)
The following table presents the potential common shares outstanding that were excluded from the computation of diluted net loss per share of common stock as of the periods presented because including them would have been antidilutive:
As of September 30,
20232022
Convertible senior notes (a)100,471,297 33,891,845 
Stock options and warrants36,857,869 30,555,194 
Total137,329,166 64,447,039 
(a) We have options to issue up to an additional $623.3 million in convertible senior notes which may result in further dilution.
15. Stock Based Compensation
The 2020 Equity Incentive Plan (the “Plan”) is a stock-based compensation plan which provides for the grants of options and restricted stock to employees and consultants of the Company. Options granted under the Plan may be either incentive options (“ISO”) or nonqualified stock options (“NSO”). Also, the Company established a 2020 Employee Stock Purchase Plan (the “ESPP”) under which Class A Common Stock may be issued. As of September 30, 2023, no shares have been issued under the ESPP.
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Stock-based compensation expense is as follows (in thousands):
Three Months Ended September 30,
20232022
Selling, general and administrative expense$2,454 $3,908 
Research and development expense3,252 7,258 
Production expense420 — 
Total$6,126 $11,166 

Nine Months Ended September 30,
20232022
Selling, general and administrative expense$5,407 $6,099 
Research and development expense7,683 11,327 
Production expense420 — 
Total13,510 17,426 
Stock options
Options under the Plan may be granted at prices as determined by the Board of Directors, provided, however, that (i) the exercise price of an ISO and NSO shall not be less than 100% of the estimated fair value of the shares on the date of grant, and (ii) the exercise price of an ISO granted to a 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. The fair value of the shares is determined by the Board of Directors on the date of grants. Stock options generally have a contractual life of 10 years. Upon exercise, the Company issues new shares.
In 2016 and 2017, the Company’s founders were granted an aggregate of 15,882,711 options which are fully vested and are not related to performance. Options granted to other employees and consultants become vested and are exercisable over a range of up to six years from the date of grant.
The Company did not grant any stock options during the three-months ended September 30, 2023.
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The following table summarizes option activity under the Plan:
 Options Weighted
Average
Exercise
Price		Weighted
Average
Contractual
Term (in
Years)
Balance as of December 31, 202217,679,596 1.51 4.7
Granted7,000 7.05 
Exercised(60,340)0.44 
Forfeited(242,841)13.49 
Balance as of September 30, 202317,383,415 1.35 3.9
The fair value of each stock option grant under the Plan was estimated on the date of grant using the Black-Scholes option pricing model, with the following range of assumptions:
 Nine Months Ended September 30, 2023
Expected term (in years)6.3
Volatility
74.5% to 75.2%
Dividend yield0.0%
Risk-free interest rate
3.40% to 4.00%
Common stock price
$6.98 to $7.10
The Black-Scholes option pricing model requires various highly subjective assumptions that represent management’s best estimates of the fair value of the Company’s common stock, volatility, risk-free interest rates, expected term, and dividend yield. As the Company’s shares have actively traded for a short period of time subsequent to the Business Combination, volatility is based on a benchmark of comparable companies within the automotive and energy storage industries.
The expected term represents the weighted-average period that options granted are expected to be outstanding giving consideration to vesting schedules. Since the Company does not have an extended history of actual exercises, the Company has estimated the expected term using a simplified method which calculates the expected term as the average of the time-to-vesting and the contractual life of the awards. The Company has never declared or paid cash dividends and does not plan to pay cash dividends in the foreseeable future; therefore, the Company used an expected dividend yield of zero. The risk-free interest rate is based on U.S. Treasury rates in effect during the expected term of the grant. The expected volatility is based on historical volatility of publicly-traded peer companies.
Restricted stock awards
During the nine-months ended September 30, 2022, the Company granted employees, who rendered services during the year ended December 31, 2021 and were employees of the Company on the grant date, a restricted stock unit (“RSU”) award based in proportion to the service period beginning from the employee’s hire date to the end of the year. The restricted stock unit awards vested on the grant date which resulted in the release of 339,340 shares of Class A common stock equal to stock-based compensation expense of $4.5 million recognized in the nine-months ended September 30, 2022. The Company’s founders declined to receive an award related to performance in 2021 and 2022. In accordance with the Company’s Outside Director Compensation Policy, each outside Board of Directors member will receive an annual RSU equal to $200,000 granted on the date of the Company’s annual shareholders’ meeting which vests in 25% increments at the end of each calendar quarter. Each Outside Director may elect to convert all or a portion of his or her annual Board of Directors retainer, excluding any annual retainer that an Outside Director may receive for serving as Lead Director and any annual retainers for committee service, into RSUs in lieu of the applicable cash retainer payment (“RSU Election”). The RSU awards granted to Outside Directors vested on the grant date which resulted in stock-based compensation expense of $0.8 million recognized in both the nine-months ended September 30, 2023 and 2022, and $0.3 million in both the three-month periods ended September 30, 2023 and 2022, respectively.
The number of Class A Common Stock granted to Outside Directors annually is based on the 30-day average closing trading price of Class A common stock on the day preceding the grant date (“RSU Value”). When an Outside Director
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exercises his or her RSU Election, the number of shares of Class A Common Stock equal the amount of cash subject to such RSU Election divided by the applicable RSU Value and are fully vested.
The following table summarizes RSU activity under the Plan:
 RSU AwardsWeighted Average Grant Date Fair Value
Unvested as of December 31, 202211,752 $12.45 
Awarded2,282,921 5.84
Vested(227,627)12.27
Forfeited(189,994)10.02
Unvested as of September 30, 20231,877,052 $8.21 
Performance-based restricted stock awards
In the third quarter of 2021, the Company’s compensation committee ratified and approved performance-based restricted stock units (“PRSUs”) to all employees (“Grantee”) the value of which is determined based on the Grantee’s level within the Company (“PRSU Value”). Each PRSU is equal to one underlying share of Class A common stock. The number of shares subject to a Grantee’s PRSU award equals the Grantee’s PRSU Value divided by the closing price per Class A common share on the service inception date, or if the service inception date is not a trading day, the closing price per Share on the closest trading day immediately prior to the service inception date; in each case rounded down to the nearest whole number. Each PRSU award shall vest as to 50% of the PRSU Value upon the Committee’s determination, in its sole discretion, and certification of the occurrence of the Ocean Start of Production and shall vest as to 50% of the PRSUs upon the first anniversary of the Ocean Start of Production, in each case, subject to (i) the Grantee’s continuous service through the applicable vesting date, (ii) the Grantee’s not committing any action or omission that would constitute Cause for termination through the applicable vesting date, as determined in the sole discretion of the Company, and (iii) the Ocean Start of Production occurring on or before December 31, 2022. The compensation committee has discretion to reduce or eliminate the number of PRSUs that shall vest pursuant to each PRSU award upon the certification of the occurrence of the Ocean Start of Production and/or upon the first anniversary of the Ocean Start of Production, after considering, any factors that it deems relevant, which could include but are not limited to (i) Company performance against key performance indicators, and (ii) departmental performance against goals. The service inception date precedes the grant dates for both performance conditions. The grant date for each of the performance conditions is the date Grantees have a mutual understanding of the key terms and conditions of the PRSU, which will occur when each performance condition is achieved, and the compensation committee has determined whether it will exercise its discretion to adjust the PRSU award. Recognition of stock-based compensation occurs when performance conditions are probable of achievement. Measurement of stock-based compensation attributed to the PRSU awards will be based on the fair value of the underlying Class A Common Stock once the grant date is determined (e.g., variable accounting).
As of September 30, 2023, the Company has approved and authorized PRSUs equal to 2,028,076 shares of Class A Common Stock with an aggregate PRSU value of $13.0 million of which 1,278,465 awards vested on March 24, 2023, the grant and vesting date for the first tranche of the PRSU award. As of December 31, 2022, achievement of the first tranche of the PRSU award was deemed probable resulting in the recognition of cumulative expense of $10.1 million. During the nine-month period ended September 30, 2023, the Company measured the cumulative expense to be recognized upon vesting based on the closing stock price on the grant and vesting date, which resulted in cumulative expense of $7.3 million, a reduction of $2.8 million from the Company’s measurement of compensation expense as of the end of 2022. There was no cumulative expense impact the during the three-months ended September 30, 2023.
As of September 30, 2023, achievement of the second tranche of the PRSU awards was deemed probable resulting in the recognition of compensation expense of $3.5 million and $10.9 million, respectively for the three and nine-months ending September 30, 2023. Measurement of PRSU compensation expense is based on the closing price on the last day of the quarter ended September 30, 2023 multiplied by the outstanding approved and authorized PRSUs. The grant date of the PRSUs has not been determined and thus the PRSUs remain subject to variable accounting treatment.
16. Related Party Transactions
On March 8, 2021, the Company appointed Mitchell Zuklie to its Board of Directors. Mr. Zuklie is the chairman of the law firm of Orrick, Herrington & Sutcliff LLP (“Orrick”), which provides various legal services to the Company.
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During the three months ended September 30, 2023 and 2022, the Company incurred expenses for legal services rendered by Orrick totaling approximately $0.5 million and $4.6 million, respectively, and $1.3 million and $7.7 million for the nine-months ended September 30, 2023 and 2022, respectively.
17. Commitments and Contingencies
The Company is not a party to any material legal proceedings and is not aware of any pending or threatened material claims. From time to time however, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.


18. Subsequent Event

Since September 30, 2023, 16 million shares have been issued in connection with the 2025 Notes, which reduced the carrying value of the 2025 Notes by $46.0 million. On November 22, 2023, the Company entered into an amendment and waiver agreement with the holder of the Company’s 2025 Notes. Pursuant to the waiver, the holder agreed to waive a covenant event of default resulting from the late filing of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2023 in exchange for having the 2025 Notes secured with a first priority security interest in substantially all of the consolidated assets of the Company, including the existing and future assets of the Company and certain of its subsidiaries, and the Company pledging the share capital of certain subsidiaries of the Company comprising substantially all of the Company’s operations. In addition, the financial test covenant was amended to require the company to have available cash equal to or greater than $250.0 million at the end of each quarter, a reduction from $340.0 million. Following the execution of the waiver, the Company will take steps to perfect the lien on certain assets through year-end; such actions are within the control of the Company.

The 2025 Notes continue to be classified as long-term liabilities in the condensed consolidated balance sheet due to the execution of the amendment and waiver agreement.




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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview
Fisker is building a technology-enabled, asset-light automotive business that it believes will be among the first of its kind and aligned with the future state of the automotive industry. This involves a focus on vehicle development, customer experience, sales and service intended to change the personal mobility experience through technological innovation, ease of use and flexibility. The Company combines the legendary design and engineering expertise of Henrik Fisker to develop high quality electric vehicles with strong emotional appeal. Central to Fisker’s business model is the Fisker Flexible Platform Agnostic Design (“FF-PAD”), a proprietary process that allows the development and design of a vehicle to be adapted to any given electric vehicle (“EV”) platform in the specific segment size. The process focuses on selecting industry leading vehicle specifications and adapting the design to crucial hard points on a third-party supplied EV platform and outsourced manufacturing to reduce development cost and time to market. The first example of this is Fisker’s work to adapt the Fisker Ocean design to a base vehicle platform developed by Magna Steyr Fahrzeugtechnik AG & Co KG (“Magna Steyr”).

Recent Developments

We had several business updates in August, September, October, and November 2023, including (i) the opening of the flagship customer lounge in Los Angeles; (ii) commencing global test drive events; (iii) the publishing of our annual ESG impact report; (iv) the achievement of producing over 8,000 vehicles; (v) the delivery of over 2,000 vehicles in 10 countries; (vi) completion of the homologation process in the US and Europe for the Fisker Ultra trim; (vii) bolstering the balance sheet with a successful offering of $170.0 million in aggregate principal of 0% senior convertible notes due in 2025; (viii) the adjustment of Fisker Ocean Extreme, Ultra, and Sport trim pricing.


2023-06-23-Fisker-Ocean-Graz-MultiColor-HM_075748-4000x3000_esoo2m.jpg
As outlined earlier this year, our production forecasts are linked to supply chain readiness and receipt of multiple regulatory homologation approvals across our launch markets. The timing of these approvals shifted in the first half of this
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year, which impacted our 2023 volume forecasts and supplier ramp readiness. Based on our current supplier capacity expectations, we currently forecast we will produce approximately 13,000 to 17,000 vehicles during 2023.
Our focus during this industrialization phase is to ensure process readiness, tooling maturity, part validation, volume ramp up, software maturity, and streamline logistics. Our suppliers are subject to external factors that could impact their ability to ramp output of components for our vehicles at high quality levels. For example, during the third quarter, one supplier experienced financial hardship and Fisker provided financial assistance to support our production needs. Our key supply chain partners are concentrated within an umbrella group of companies, and we are dependent upon their operational performance. Our ability to reach expected run rates is contingent upon key suppliers’ ability to mature software and components and the ability of our manufacturing partner to successfully ramp production at required quality levels. We continue to work with our suppliers and our manufacturing partner to meet our updated production goals for 2023 and prepare for higher volumes in 2024.

Basis of Presentation
Fisker currently conducts its business through one operating segment. Fisker’s automobile sales activity has been limited to date. Revenue from merchandise sales and home charging solutions represented Fisker’s commercial activity historically, but are not core to our ongoing business. Fisker’s historical results are reported under U.S. GAAP and in U.S. dollars. With the start of retail production of its Ocean SUV, Fisker expects its global operations to focus primarily on the USA and the European Union markets. As a result, Fisker expects that the financial results it reports for periods after it began retail production will not be comparable to the financial results for earlier periods including Fisker’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023.


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Results of Operations
Comparison of the Three Months Ended September 30, 2023 to the Three Months Ended September 30, 2022
The following table sets forth Fisker’s historical operating results for the periods indicated:
 
Three Months
Ended September 30,
 
 20232022
$ Change
% Change
 (dollar amounts in thousands)
Revenues$71,800 $14 $71,786 n.m.
Cost of revenues104,548 6 104,542 n.m.
Gross Margin(32,748)8 (32,756)n.m.
Operating costs and expenses:
Selling, general and administrative57,650 22,102 35,548 161 %
Research and development13,428 117,885 (104,457)(89)%
Total operating costs and expenses71,078 139,987 (68,909)(49)%
Loss from operations(103,826)(139,979)36,153 (26)%
Other income (expense):
Other income (expense)(2,288)270 (2,558)n.m.
Interest income6,395 3,075 3,320 108 %
Interest expense(4,928)(4,693)(235)5 %
Foreign currency gain/(loss)11,068 (7,285)18,353 (252)%
Unrealized gain/(loss) recognized on equity securities(530)(730)200 (27)%
Fair value adjustment on 2025 convertible note
725 — 725 n.m.
Total other income (expense)10,442 (9,363)19,805 (212)%
Loss before income taxes(93,384)(149,342)55,958 (37)%
Provision for income taxes(1,835)— (1,835)n.m.
Net Loss$(95,219)$(149,342)$54,123 (36)%
n.m. = not meaningful.
Revenue and Cost of Revenues
In the second quarter of 2023, we began producing vehicles for deliveries to our customers and, accordingly, we are recognizing vehicle revenues from the sale of initial Fisker Ocean SUVs. Merchandise sales and home charging solutions are not intended to comprise a significant portion of the Company’s revenues. Over the course of the fourth quarter of 2023, we continue to ramp production volumes at a measured pace to help facilitate the delivery of high-quality components from suppliers in line with our serial production run-rate.
During the three-month period ended September 30, 2023, the Company delivered 1,097 vehicles and recognized net revenue of $71.6 million with related cost of revenues totaling $104.4 million resulting in negative gross profit of $32.8 million. The increase in revenue, cost of revenue and gross profit is due to the increase in vehicles sales for the three-month period ended September 30, 2023. The Company had no vehicle sales during the corresponding three month period ended September 30, 2022. During the three-month period ended September 30, 2023, the Company determined that an $18.2 million inventory valuation adjustment was appropriate due to the lower levels of production during the ramp-up phase which we expect to continue until we reach full production.
Sales of branded apparel and goods and home charging solutions totaled $211 thousand with related costs of revenue sold of $137 thousand resulting in a gross profit of $74 thousand during the three month period ended September 30, 2023 compared to branded apparel sales of $14 thousand with related cost of revenues of $6 thousand resulting in gross profit of $8 thousand during the corresponding three month period ended September 30, 2022.
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Since commencing production and sale of our vehicles, our cost of revenues include mainly vehicle components and parts, labor costs, amortized tooling costs and capitalized costs associated with the Magna warrants, shipping and logistics costs, and reserves for estimated warranty expenses.
Subsequent to the release of our preliminary earnings results on November 13, 2023, we identified approximately $20 million of expenses that were related to services performed after the start of production of salable vehicles. The expenses were incorrectly recorded primarily as selling, general and administrative expenses in our preliminary earnings results, but were later determined to be associated with production set-up activities and are now appropriately reflected in cost of revenues. Additionally, other inventory adjustments were recorded resulting in a $4.0 million increase in net loss subsequent to the preliminary earnings results.
Selling, General and Administrative
Selling, general and administrative expenses consist mainly of personnel-related expenses for Fisker’s executive and other administrative functions, advertising and marketing expenses, and expenses for outside professional services, including legal, accounting and other advisory services.
Selling, general and administrative expenses increased by $35.5 million or 161% from $22.1 million during the three months ended September 30, 2022 to $57.7 million during the three month period ended September 30, 2023, primarily due to increased salaried employee headcount and stock-based compensation, and targeted marketing and advertising for events. With vehicle deliveries having begun in the second quarter of 2023, we have increased our marketing and advertising efforts in alignment with expected customer interest in the Fisker Ocean. Also, Center+, showroom, vehicle processing, and service and pickup locations will open throughout the remainder of 2023 resulting in higher expenses. The timing of openings will correspond with customer order demand and facility readiness in North America and Europe. Selling, general and administrative expenses include stock-based compensation expense of $2.5 million and $3.9 million for three months ended September 30, 2023 and 2022, respectively. Overall, total headcount for the Company increased to more than 1,300 employees as of September 30, 2023, compared to 760 employees as of December 31, 2022.
Research and Development
To date, Fisker’s research and development expenses have consisted primarily of external engineering services in connection with the design of the Fisker Ocean and PEAR models and development of the pre-production and start of production vehicles.
Research and development expenses decreased by approximately $104.5 million or 88.6% from $117.9 million during the three months ended September 30, 2022, to $13.4 million during the three months ended September 30, 2023. The decrease primarily relates to lower costs associated with the purchase and expense of prototype parts and engineering and design services incurred as Fisker met key development gateways during the third quarter of 2022 that did not recur in the third quarter of 2023 as Fisker Ocean consumer deliveries accelerated. Over the remainder of 2023, we expect research and development expenses will continue to trend lower than the corresponding three month period in 2022 as conceptual design and development of PEAR and costs associated with the completion of homologation in 2023 are not expected to exceed 2022’s costs incurred to complete the engineering and design of the Ocean and transition to production, including accrual of probable achievement of engineering and design milestones at the end of 2022. Research and development expense includes stock-based compensation expense of $3.3 million and $7.3 million for the three months ended September 30, 2023 and 2022, respectively.

Interest Expense
Interest expense consists of interest expense associated with the convertible senior convertible notes due in 2026.
Interest expense amounted to $4.9 million and $4.7 million during the three months ended September 30, 2023 and 2022, respectively due to the sale, in August 2021, of $667.5 million principal amount of 2.50% convertible senior notes due in September 2026. Interest expense in the subsequent three month period throughout calendar year 2023 will approximate $4.6 million, including accretion of debt issuance costs.
Foreign Currency Gain/Loss
The Company recorded a foreign currency gain of $11.1 million during the three months ended September 30, 2023, compared to a loss of $7.3 million during the three months ended September 30, 2022, primarily due to remeasurement losses on Euro-denominated monetary assets caused by weakening Euro currency rates. For the remainder of 2023, we
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expect EUR denominated transactions associated with our foreign operations and services provided by suppliers will increase and will subject Fisker to greater fluctuation in realized gain and losses from foreign currencies.
Unrealized Gain/Loss Recognized on Equity Securities
Unrealized loss recognized on equity securities held as of September 30, 2023 totaled $0.5 million for the three months ended September 30, 2023 compared to a loss of $0.7 million during the three months ended September 30, 2022.
Fair value adjustment on 2025 convertible not
The Company elected to account for its 2025 convertible notes with changes in fair value recorded as a component of other income (expense), which resulted in a net $0.7 million fair value adjustment for the three-months ended September 30, 2023.
Provision for Income Tax
Fisker’s income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. Fisker maintains a valuation allowance against the full value of its U.S. and state net deferred tax assets because Fisker believes the recoverability of the tax assets is not more likely than not.
Provision for income tax amounted to $1.8 million for the three months ended September 30, 2023.
Net Loss
Net loss was $95.2 million during the three months ended September 30, 2023, a decrease of approximately $54.1 million from a net loss of $149.3 million during the three months ended September 30, 2022, for the reasons discussed above.
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Comparison of the Nine-Months Ended September 30, 2023 to the Nine-Months Ended September 30, 2022
The following table sets forth Fisker’s historical operating results for the periods indicated:

 
Nine-Months
Ended September 30,
 
 20232022
$ Change
% Change
 (dollar amounts in thousands)
Revenues$72,823 $36 72,787 n.m.
Cost of revenues105,472 25 105,447 n.m.
Gross Margin(32,649)11 (32,660)n.m.
Operating costs and expenses:
Selling, general and administrative137,552 61,615 75,937 123 %
Research and development143,422 290,505 (147,083)(51)%
Total operating costs and expenses280,974 352,120 (71,146)(20)%
Loss from operations(313,623)(352,109)38,486 (11)%
Other income (expense):
Other income (expense)(2,593)(553)(2,040)n.m.
Interest income19,870 4,693 15,177 n.m.
Interest expense(14,134)(13,827)(307)2 %
Foreign currency gain/(loss)14,467 (9,956)24,423 (245)%
Unrealized gain/(loss) recognized on equity securities(920)(5,640)4,720 (84)%
Fair value adjustment on 2025 convertible note
725 — 725 n.m.
Total other income (expense)17,415 (25,283)42,698 (169)%
Loss before income taxes$(296,208)$(377,392)81,184 (22)%
Provision for income taxes$(2,173)$— (2,173)n.m.
Net Loss$(298,381)$(377,392)79,011 (21)%
Revenues and Cost of Revenues
In the second quarter of 2023, we began producing vehicles for deliveries to our customers and, accordingly, we are recognizing vehicle revenues from the sale of initial Fisker Ocean SUVs. Merchandise sales and home charging solutions are not intended to comprise a significant portion of the Company’s revenues. Over the course of the second half of 2023, we continue to ramp production volumes at a measured pace to ensure the supplier base can delivery high-quality components in line with our serial production run-rate.
During the nine month period ended September 30, 2023, the Company delivered 1,108 vehicles and recognized net revenue of $72.3 million with related cost of revenues totaling $105.2 million resulting in negative gross profit of $32.9 million. The increase in revenue, cost of revenue and gross profit is due to the increase in vehicles sales for the nine-month period ended September 30, 2023. The Company had no vehicle sales during the corresponding three month period ended September 30, 2022. During the nine-month period ended September 30, 2023, the Company determined that a $18.2 million inventory valuation adjustment was appropriate due to the lower levels of production during the ramp-up phase which we expect to continue until we reach full production.
Sales of branded apparel and goods and home charging solutions totaled $523 thousand with related costs of revenue of $186 thousand resulting in a gross profit of $337 thousand during the nine-month period ended September 30, 2023 compared to branded apparel sales of $36 thousand with related cost of revenues of $25 thousand resulting in gross profit of $11 thousand during the corresponding nine-month period ended September 30, 2022.
Since we commenced production and sale of our vehicles, cost of revenues includes mainly vehicle components and parts, including batteries, labor costs, amortized tooling costs and capitalized costs associated with the Magna warrants, shipping and logistics costs, and reserves for estimated warranty expenses.
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Selling, General and Administrative
Selling, general and administrative expenses consist mainly of personnel-related expenses for Fisker’s executive and other administrative functions, advertising and marketing expenses, and expenses for outside professional services, including legal, accounting and other advisory services.
Selling, general and administrative expenses increased by $75.9 million or 123% from $61.6 million during the nine-months ended September 30, 2022 to $137.6 million during the nine-month period ended September 30, 2023, primarily due to increased salaried employee headcount, improved benefits in line with our human capital and ESG goals designed to offer potential employees competitive compensation packages and stock-based compensation, and targeted marketing and advertising for events. With vehicle deliveries beginning in the second quarter of 2023, we have increased our marketing and advertising efforts in alignment with expected customer interest in the Fisker Ocean. Also, Center+, showroom, vehicle processing, and service and pickup locations will open throughout the remainder of 2023 resulting in higher expenses. The timing of openings will correspond with customer order demand and facility readiness in North America and Europe. Selling, general and administrative expenses include stock-based compensation expense of $5.4 million and $6.1 million for nine-months ended September 30, 2023 and 2022, respectively.
Research and Development
To date, Fisker’s research and development expenses have consisted primarily of external engineering services in connection with the design of the Fisker Ocean model and development of the pre-production and start of production vehicles.
Research and development expenses decreased by approximately $147.1 million or 50.6% from $290.5 million during the nine-months ended September 30, 2022, to $143.4 million during the nine-months ended September 30, 2023. The decrease primarily relates to lower costs associated with the purchase and expense of prototype parts and engineering and design services incurred as Fisker met key development gateways during the first half of 2022 that did not recur in the first half of 2023 as the Fisker Ocean was in the final stages of homologation. Higher costs in the first nine-months of 2022 are only partially offset by higher headcount in the first nine-months of 2023. During the fourth quarter of 2023, we expect research and development expenses will continue to trend lower than the corresponding nine-month periods in 2022 as conceptual design and development of PEAR and costs associated with the completion of homologation in 2023 are not expected to exceed 2022’s costs incurred to complete the engineering and design of the Ocean and transition to production, including accrual of probable achievement of engineering and design milestones at the end of 2022. Research and development expense includes stock-based compensation expense of $7.7 million and $11.3 million for the nine-months ended September 30, 2023 and 2022, respectively.
Interest Expense
Interest expense consists of interest expense associated with the convertible senior notes.
Interest expense amounted to $14.1 million and $13.8 million during the nine-months ended September 30, 2023 and 2022, respectively due to the sale, in August 2021, of $667.5 million principal amount of 2.50% convertible senior notes. Interest expense in the subsequent three-month period throughout calendar year 2023 will approximate $4.6 million, including accretion of debt issuance costs.
Foreign Currency Gain/Loss
The Company recorded a foreign currency gain of $14.5 million during the nine-months ended September 30, 2023, compared to loss of $10.0 million during the nine-months ended September 30, 2022, primarily due to remeasurement losses on Euro-denominated monetary assets caused by weakening Euro currency rates. For the remainder of 2023, we expect EUR denominated transactions associated with our foreign operations and services provided by suppliers will increase and will subject Fisker to greater fluctuation in realized gain and losses from foreign currencies.
Unrealized Gain/Loss Recognized on Equity Securities
Unrealized losses recognized on equity securities held as of September 30, 2023 totaled $0.9 million for the nine-months ended September 30, 2023 compared to a loss of $5.6 million during the nine-months ended September 30, 2022.

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Fair value adjustment on 2025 convertible note
The Company elected to account for its 2025 convertible notes with changes in fair value recorded as a component of other income (expense), which resulted in a net $0.7 million fair value adjustment for the nine-months ended September 30, 2023.
Provision for Income Tax
Fisker’s income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. Fisker maintains a valuation allowance against the full value of its U.S. and state net deferred tax assets because Fisker believes the recoverability of the tax assets is not more likely than not.
Provision for income tax amounted to $2.2 million for the nine-months ended September 30, 2023.
Net Loss
Net loss was $298.4 million during the nine-months ended September 30, 2023, a decrease of approximately $79.0 million from a net loss of $377.4 million during the nine-months ended September 30, 2022, for the reasons discussed above.
Liquidity and Capital Resources
During the second quarter of 2023, Fisker began to generate revenues from its core business operations. To date, Fisker has funded its capital expenditures and working capital requirements through equity and convertible notes, as further discussed below. Fisker’s ability to successfully expand its business may depend on many factors, including its working capital needs, the availability of equity or debt financing and, over time, its ability to generate cash flows from operations.
As of September 30, 2023, Fisker’s cash and cash equivalents totaled $527.4 million and restricted cash totaled $98.0 million which supports future working capital needs.
In July and September 2023, we entered into purchase agreements for the sale of an aggregate of $510.0 million principal amount of convertible senior notes due in 2025. The net proceeds from the issuance of the 2025 Notes was $445.1 million, net of debt issuance costs. The 2025 Notes mature in July 2025 and September 2025, unless repurchased, redeemed, or converted in accordance with their terms prior to such date.
In May 2022, we entered into the Distribution Agreement, pursuant to which Fisker established the ATM Program. Pursuant to the ATM Program, Fisker could, at its discretion and from time to time during the term of the Distribution Agreement, sell, through the Agents, shares of its Class A Common Stock as would result in aggregate gross proceeds to Fisker of up to $350 million by any method permitted by law deemed to be an “at-the-market offering” as defined in Rule 415 of the Securities Act of 1933, as amended, including without limitation sales made directly on the New York Stock Exchange, on any other existing trading market for the Class A Common Stock or to or through a market maker. In addition, the sales agents were able to also sell the shares of Class A Common Stock by any other method permitted by law, including, but not limited to, negotiated transactions. We issued 21,153,154 shares of Class A Common Stock under the ATM Program during the nine-months ended September 30, 2023 for gross proceeds of $133.1 million, before $2.0 million of commissions and other direct incremental issuance costs. Effective July 12, 2023, the Company terminated the Distribution Agreement. As a result, the Company will not offer or sell any more share under the May 2022 ATM Program.
In August 2021, we entered into a purchase agreement for the sale of an aggregate of $667.5 million principal amount of convertible senior notes due in 2026. The net proceeds from the issuance of the 2026 Notes were $562.2 million, net of debt issuance costs and the 2026 Capped Call Transactions discussed further in Note 9. The 2026 Notes mature on September 15, 2026, unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The 2026 Notes were not convertible as of September 30, 2023.
Fisker expects its capital expenditures and working capital requirements to increase in 2023 and beyond, as it optimizes production and deliveries of the Fisker Ocean, develops its customer support and marketing infrastructure and expands its research and development efforts on PEAR, Ronin and other future vehicle programs such as our electric pick-up truck. Fisker believes that its cash on hand will be sufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of this Form 10-Q. Fisker may, however, need additional
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cash resources, to fund its operations until it achieves operational profitability, due to changed business conditions or other developments, supply chain challenges, disruptions due to COVID-19, competitive pressures, and regulatory developments, among other developments.
To the extent our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. If such financing is not available, or if the terms of the financing are less desirable than we expect, we may be forced to decrease our level of investment in product development or scale back our operations, which could have an adverse impact on our business and financial prospects.
Cash Flows
The following table provides a summary of Fisker’s cash flow data for the periods indicated:
 Nine Months Ended September 30,
 20232022
 
( in thousands)
Net cash used in operating activities$(517,580)$(341,430)
Net cash used in investing activities(177,685)(167,256)
Net cash provided by financing activities$584,112 $130,943 
Cash Flows used in Operating Activities
Fisker’s net cash flows used in operating activities to date have been primarily comprised of costs related to research and development, payroll and other selling, general and administrative activities. Lease commitments as of September 30, 2023, will result in cash payments of $4.4 million for the remainder of 2023, and $18.7 million for 2024, and $64.8 million for 2025 and thereafter. Structural improvements are required before Fisker can use many of its Fisker Lounges, Center +, vehicle processing, and service and pickup locations in North America and Europe for its intended purposes. The timing for completion of the structural improvements is expected during 2023 and 2024. Compared to 2022, Fisker expects its cash used in operating activities will increase as a decrease in development costs of the Fisker Ocean are offset by higher working capital throughout the remainder of 2023.
Net cash used in operating activities increased by approximately $176.2 million from $341.4 million during the nine-months ended September 30, 2022 to $517.6 million during the nine-months ended September 30, 2023.
Cash Flows used in Investing Activities
Fisker’s cash flows used in investing activities, historically, have been comprised mainly of purchases of property and equipment. During the nine-months ended September 30, 2023, the Company acquired assets related to production of the Fisker Ocean and its components that totaled $170.0 million compared to $157.3 million during the nine-months ended September 30, 2022. Fisker continues to expect 2023 capital expenditures for tooling and manufacturing equipment to range between $225.0 million and $240.0 million of which we expect at least 50% is denominated in foreign currencies, as serial production tooling and equipment installations continue at both vehicle assembly and supplier facilities during 2023.
Fisker used cash of $177.7 million for investing activities during the nine-months ended September 30, 2023, compared to $167.3 million during the corresponding nine-months ended September 30, 2022.
Cash Flows from Financing Activities
Through September 30, 2023, Fisker has financed its operations primarily through the sale of equity securities and convertible senior notes.
Net cash from financing activities was $584.1 million during the nine-months ended September 30, 2023, which was primarily due to the proceeds from the issuance of 2025 convertible note of $445.1 million, net of issuance costs of $4.9 million, the issuance of the ATM equity program of $135.9 million, net of stock issuance costs of $1.9 million, as well as aggregate proceeds from the exercise of stock options of $2.8 million. Net cash from financing activities was $130.9 million during the nine-months ended September 30, 2022 which was primarily due to the proceeds from the issuance of the ATM equity program.
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Off-Balance Sheet Arrangements
Fisker is not a party to any off-balance sheet arrangements, as defined under SEC rules.

Critical Accounting Policies and Estimates
Fisker’s financial statements have been prepared in accordance with GAAP. In the preparation of these financial statements, Fisker is required to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Fisker considers an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on the condensed consolidated financial statements.
For a description of our critical accounting policies and estimates, refer to Part II, Item 7, Critical Accounting Policies and Estimates in our Annual Report on Form 10-K for the year ended December 31, 2022. Except for the following, there have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023.
Inventory Valuation

We review our inventory to ensure that its carrying value does not exceed its net realizable value (NRV), with NRV based on the estimated selling price of inventory in the ordinary course of business, less estimated costs of completion, disposal and transportation. When our expectations indicate that the carrying value of inventory may exceed its NRV, we perform an exercise to calculate the approximate amount by which carrying value is greater than NRV and record additional cost of revenues for the difference.

Once a write-off occurs, a new, lower cost basis is established. We also regularly monitor inventory quantities on hand and on order and record write-downs for excess and obsolete inventories based on our estimates of the future demand for our products and market and economic conditions and for damaged or otherwise impaired goods.

Should our estimates used in these calculations change in the future, such as estimated selling prices or production costs, additional write-downs may occur.

2025 Convertible Note
The Company analyzed the purchase option related the Securities Purchase Agreement dated as of July 10, 2023 and determined that the purchase option for the Additional Optional Note and Additional Mandatory Note represents a freestanding instrument that should be classified as a derivative. The Company has recorded the Option to Purchase Additional Notes as a derivative liability, which is carried on the Company’s balance sheet at fair value. The derivative liability is marked-to-market each measurement period and any change in fair value is recorded as a component of the income statement. The Company fair values the derivative using the Monte Carlo simulation pricing model with embedded lattice.

As permitted under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments (“ASC 825”), the Company elected to account for its convertible promissory notes with changes in fair value are recorded as a component of non-operating loss in the consolidated statements of operations. As a result of electing the fair value option, direct costs and fees related to the convertible notes were expensed as incurred.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Fisker has not, to date, been exposed to material market risks given its early stage of operations. In the future, Fisker expects to be exposed to foreign currency translation and transaction risks and potentially other market risks, including those related to interest rates or valuation of financial instruments, among others.
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Foreign Currency Risk
Fisker’s functional currency is the U.S. dollar, while certain of Fisker’s current and future subsidiaries are expected to have functional currencies in Euro, British Pound Sterling, Indian Rupee, and Chinese Yuan Renminbi reflecting their principal operating markets. Fisker’s contracts with OEMs and/or tier-one automotive suppliers to be transacted in Euro or other foreign currencies. We have completed homologation of the Fisker Ocean or sale in the U.S. and Europe resulting in revenue transactions denominated in Euro or other foreign currencies. In addition, Fisker expects that certain of its subsidiaries will have functional currencies other than the U.S. dollar, meaning that such subsidiaries’ results of operations will be periodically translated into U.S. dollars in Fisker’s condensed consolidated financial statements, which may result in revenues and earnings volatility from period to period in response to exchange rates fluctuations. The Company assesses whether opportunities exist to purchase foreign currencies with U.S. dollars to take advantage of favorable exchange rates.
In April and July 2022, the Company purchased 130.1 million Euros for $140.0 million U.S. dollars, a currency exchange rate of 1 U.S. dollar for 1.076 Euro and 50.0 million Euros for $50.9 million U.S. dollars, a currency exchange rate of 1 U.S. dollar for 1.018 Euro which are designed to provide a hedge against future foreign currency exposures. As of September 30, 2023, the Company has fully utilized these funds for research and development and production of Ocean and future projects.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosures.
Management, with the participation of our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation (pursuant to Rule 13a-15(b) under the Exchange Act) of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgement in evaluating the benefits of our controls and procedures relative to their costs. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2023, the Company’s disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting described below.

Material Weaknesses in Internal Control Over Financial Reporting

In connection with the preparation of our interim condensed consolidated financial statements for the quarter ended September 30, 2023, material weaknesses were identified in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The Company’s material weaknesses are as follows:

–The Company did not design and maintain an effective control environment commensurate with its financial reporting requirements. Specifically, the Company has experienced a change in key accounting personnel and, as a result, lacked a sufficient number of professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. In addition, the Company did not design and maintain effective controls for communicating and sharing information between the operations, accounting, information technology, finance and legal departments. Specifically, there are insufficient controls to ensure that the accounting department is consistently provided with complete and adequate support, documentation and information, and that matters are resolved in a timely and effective manner.

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–The Company did not design and maintain effective controls in response to the risks of material misstatement over the accounting for inventory and related income statement accounts. Specifically, controls over the accounting for inventory and related income statement accounts were not sufficient to respond to changes to the risks of material misstatement to financial reporting due to changes in the business.

These material weaknesses contributed to the following additional material weakness:

–The Company did not design and maintain effective controls related to the accounting for certain non-routine, complex or unusual events or transactions. Specifically, the Company did not design and maintain effective controls to timely analyze and account for the financial statement effects of variable interest entities and valuation of convertible debt and the related derivative liability.

These material weaknesses resulted in material audit adjustments to inventory, costs of revenue, convertible debt and derivative liability balances during the quarter ended September 30, 2023. Additionally, each of the material weaknesses described above could result in a misstatement of substantially all account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Notwithstanding the above, management believes the Company’s consolidated financial statements and related financial information included in this Form 10-Q fairly present, in all material respects, the Company’s balance sheet, statements of operations, comprehensive income and cash flows as of and for the periods presented.

Changes in Internal Control over Financial Reporting

The Company is in the process of implementing certain changes in its internal controls to remediate the material weaknesses described above. The accounting personnel changes described above are changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in legal proceedings arising in the ordinary course of business. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, negative publicity and reputational harm and other factors.
For a description of our material pending legal proceedings, please see Note 17, Commitments and Contingencies, to the unaudited condensed consolidated financial statements included elsewhere in this report for more information.
Item 1A. Risk Factors
Please see Part I, Item 1A. Risk Factors in our Annual Report filed on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023, for a discussion of risks, uncertainties and other factors that could materially affect our business, financial condition or future results, and the following risk factors, which supplement the foregoing:
We are dependent on our suppliers, a significant number of which are single or limited source suppliers, and the inability of our suppliers to deliver necessary components for our vehicles in a timely manner and at prices and volumes acceptable to us could have a material adverse effect on our business, prospects and operating results.

While we obtain components from multiple sources whenever possible, many of the components used in our vehicles are purchased from a single source. We believe that we may be able to establish alternate supply relationships and can obtain or engineer replacement components for many single sourced components, but we may be unable to do so in the near term (or at all) at prices or quality levels that are acceptable to us for some single sourced components. In addition, we could experience delays if our suppliers do not meet agreed upon timelines or they experience production constraints that in turn limit our production.

Any disruption in the supply of components, including semiconductor shortages, whether or not from a single source supplier, could temporarily disrupt production of our vehicles until an alternative supplier is able to supply the required components. Changes in business conditions, unforeseen circumstances, governmental changes, and other factors beyond our control could also affect our suppliers’ ability to deliver components to us on a timely basis. Any of the foregoing could materially and adversely affect our ability to produce vehicles, increase our costs and negatively affect our liquidity and financial performance. For example, the consequences of the conflict between Russia and Ukraine or the conflicts in the Middle East, including international sanctions, the potential impact on inflation and increased disruption to supply chains may impact us, result in an economic downturn or recession either globally or locally within the U.S. or other economies, reduce business activity, spawn additional conflicts (whether in the form of traditional military action, reignited “cold”wars or in the form of virtual warfare such as cyberattacks) with similar and perhaps wider ranging impacts and consequences and have an adverse impact on our results of operations, financial condition and prospects. Such consequences also may increase our funding cost or limit our access to the capital markets.

If any of our significant suppliers experience substantial financial difficulties, cease operations, or otherwise face business disruptions, we may be required to provide financial support or take other measures in an effort to ensure components and materials remain available to us. Financial support provided by us to distressed suppliers could adversely impact our liquidity and results of operations.

We have identified material weaknesses in our internal control over financial reporting. If our remediation of such material weaknesses is not effective, or if we experience additional material weaknesses in the future or otherwise fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired, which could adversely affect investor confidence in the accuracy and completeness of our financial statements and adversely affect our business and operating results and the market price for our Class A common stock.

As a public company, we are required to establish and periodically evaluate procedures with respect to our disclosure controls and procedures and our internal control over financial reporting. In the course of preparing our financial statements for the quarterly period ended September 30, 2023, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in our internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected on a timely basis. For a discussion of these material weaknesses, please see Part I, Item 4 “Controls and Procedures”.
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While the control deficiencies described above did not result in a material misstatement to our financial statements, the control deficiencies created a reasonable possibility that a material misstatement to our consolidated financial statements would not be prevented or detected on a timely basis. Therefore, we concluded that the deficiencies represent material weaknesses in our internal control over financial reporting. We will not be able to fully remediate these material weaknesses until appropriate steps have been completed and controls have been operating effectively for a sufficient period of time.

Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, additional weaknesses in our disclosure controls and procedures and internal control over financial reporting may be discovered in the future. If we are unable to remediate the material weaknesses in a timely manner and further implement and maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process, and report financial information accurately, and to prepare financial statements within required time periods could be adversely affected, which could result in material misstatements in our financial statements that may continue undetected or a restatement of our financial statements for prior periods. This may negatively impact the public perception of the Company and cause investors to lose confidence in the accuracy and completeness of our financial reports, which could negatively affect the market price of our common stock, harm our ability to raise capital on favorable terms, or at all, in the future, and subject us to litigation or investigations by regulatory authorities, which could require additional financial and management resources or otherwise have a negative impact on our financial condition.

Retail vehicle sales depend significantly on affordable interest rates and availability of credit for vehicle financing and a substantial increase in interest rates could adversely affect our business, prospects, financial condition, results of operations, and cash flows.

In certain regions, including North America and Europe, financing for new vehicle sales has been available at relatively low interest rates for several years due to, among other things, expansive government monetary policies. As interest rates have risen, market rates for new vehicle financing have also risen, which may make our vehicles less affordable to customers or steer customers to less expensive vehicles that would be less profitable for us, adversely affecting our business, prospects, financial condition, results of operations, and cash flows. Additionally, if consumer interest rates continue to increase substantially or if financial service providers tighten lending standards or restrict their lending to certain classes of credit, customers may not desire or be able to obtain financing to purchase our vehicles. As a result, a continuing substantial increase in customer interest rates or tightening of lending standards could have a material adverse effect on our business, prospects, financial condition, results of operations, and cash flows.

Our distribution model is different from the predominant current distribution model for automobile manufacturers, which makes evaluating our business, operating results and future prospects difficult.

Our distribution model is different from the predominant current distribution model for automobile manufacturers, which makes evaluating our business, operating results and future prospects difficult. Our distribution model is not common in the automotive industry today. Our plan is to conduct vehicle sales directly to users rather than through dealerships, primarily through our Flexee App and Fisker Experience Centers. This model of vehicle distribution is relatively new and, with limited exceptions, unproven, and subjects us to substantial risk. For example, we will not be able to utilize long established sales channels developed through a franchise system to increase sales volume. If our inventory grows at a pace that materially exceeds the pace we deliver vehicles to our customers, our working capital would be adversely affected. Moreover, our success will depend in large part on our ability to effectively develop our own sales channels and marketing strategies, which includes competing with companies that have well established distribution channels. If we are unable to achieve this, it could have a material adverse effect on our business, prospects, financial results and results of operations. There are substantial automotive franchise laws in place in many geographies in the world, and we might be exposed to significant franchise dealer litigation risks.

Absent relief, as a result of our failure to timely file a periodic report with the SEC, we are currently ineligible to file a registration statement on Form S-3, which may impair our ability to raise capital on terms favorable to us, in a timely manner or at all.

Form S-3 permits eligible issuers to conduct registered offerings using a short form registration statement that allows the issuer to incorporate by reference its past and future filings and reports made under the Exchange Act. In addition, Form S-3 enables eligible issuers to conduct primary offerings under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”). The shelf registration process, combined with the ability to forward incorporate information, allows issuers to avoid delays and interruptions in the offering process and to access the capital markets in a more expeditions and efficient manner than raising capital in a standard registered offering pursuant to a registration statement on Form S-3. The
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ability to newly register securities for resale may also be limited as a result of the loss of Form S-3 eligibility with respect to such registrations.

As a result of our failure to timely file our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, absent a waiver of the Form S-3 eligibility requirements, we are ineligible to file new registration statements on Form S-3 until no earlier than December 1, 2024. In the event of the absence of a waiver, our S-3 ineligibility may significantly impair our ability to raise necessary capital needed for our business. If we seek to access the capital markets through a registered offering pursuant to a new registration statement on Form S-1, we would be required to disclose the proposed offering and the material terms thereof before the offering commences. As a result of such disclosure and potential for SEC review of such registration statement on Form S-1, we may experience delays in the offering process and we may incur increased offering and transaction costs and other considerations. If we are unable to raise capital through a registered offering, we would be required to raise capital on a private placement basis, which may be subject to pricing, size and other limitations imposed under NYSE’s rules, or seek other sources of capital. In addition, absent a waiver of the Form S-3 eligibility requirements, we will not be permitted to conduct sales in an “at the market offering” as defined in Rule 415 under the Securities Act. Any of the foregoing may impair our ability to raise capital on terms favorable to us, in a timely manner or at all.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
See Part II, Item 5.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
During the quarter ended September 30, 2023, no director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined in Item 408(a) of Regulation S-K.
The information below included in this Item 5 is provided in lieu of filing such information on a Current Report on Form 8-K under Items 1.01, 2.03, 2.04 and 3.01 as designated below.

Item 1.01 Entry into a Material Definitive Agreement

Indenture

As previously disclosed, on July 10, 2023, the Company entered into a Securities Purchase Agreement (the “Original Purchase Agreement”) with an institutional investor (the “Investor”) pursuant to which the Company agreed to sell, and the Investor agreed to purchase, $340,000,000 in aggregate principal amount of 0% senior convertible notes due 2025 (the “Series A-1 Notes”) in a registered direct offering. On September 29, 2023, the Company and the Investor entered into Amendment No. 1 to the Original Purchase Agreement (the “Purchase Agreement Amendment”, and together with the Original Purchase Agreement, the “Securities Purchase Agreement”). Pursuant to the terms of the Purchase Agreement Amendment, the Company agreed to sell, and the Investor agreed to purchase, $170,000,000 in aggregate principal amount of 0% senior convertible notes due 2025 (the “Series B-1 Notes” and together with the Series A-1 Notes, the “Notes”) in a registered direct offering.

The Notes were issued as senior obligations of the Company under that certain Indenture (the “Base Indenture”), dated July 11, 2023, by and between the Company and Wilmington Savings Fund Society, FSB, as the trustee (the “Trustee”), as supplemented by that certain Second Supplemental Indenture (the “Second Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), entered into on September 29, 2023. On November 22, 2023, the Company, along with certain of its subsidiaries, and the Trustee entered into a third supplemental indenture (the “Third Supplemental Indenture”) to the Indenture pursuant to which, among other things, (i) the Company agreed to secure the obligations under the Notes pursuant to a Pledge Agreement (as defined below) and a security agreement, to be entered into by and among the Company, the Investor and certain subsidiaries of the Company and such other security documents and
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certificates as specified in the Pledge Agreement, including the guaranties executed by certain subsidiaries of the Company (ii) the Investor agreed to reduce the Financial Test (as defined in the Notes) to $250,000,000 effective immediately.

This summary is qualified in its entirety by reference to the full text of the form of Third Supplemental Indenture, which is attached as Exhibit 4.1 to this Quarterly Report on Form 10-Q.

Pledge Agreement

In connection with the Third Supplemental Indenture, the Company and certain of its direct and indirect wholly owned subsidiaries entered into a Pledge Agreement (the “Pledge Agreement”), dated as of November 22, 2023, in favor of the Investor as collateral agent in the form attached hereto as Exhibit 10.1, pursuant to which the Notes will be secured by a first priority security interest in all of the existing and future assets of the Company and certain of its subsidiaries, including a pledge of all of the share capital of certain subsidiaries of the Company (limited, in the case of foreign subsidiaries and domestic foreign holding companies, to 65% of the capital stock of first tier foreign subsidiaries and domestic foreign holding companies). No later than December 8, 2023, the Company and the Investor have agreed to enter into a security agreement and, as is customary for a transaction of this nature, to perfect by December 31, 2023 the security interest in certain assets located in foreign jurisdictions, including entering into account control agreements for cash.

This summary is qualified in its entirety by reference to the full text of the form of Pledge Agreement, which is attached as an exhibit to this Quarterly Report on Form 10-Q.

Amendment and Waiver Agreement

On November 22, 2023, the Company entered into an amendment and waiver agreement (the “Waiver”) with the Investor. Pursuant to the Waiver, the Investor agreed to waive a covenant event of default resulting from the late filing of the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2023. Such event of default is described in further detail below under Item 2.04. The Investor also agreed to reduce the amount of cash required under the Financial Test to $250,000,000.

This summary is qualified in its entirety by reference to the full text of the Waiver which is attached as Exhibit 10.2 to this Quarterly Report on Form 10-Q.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above under the Item 1.01 header is incorporated herein for purposes of this Item 2.03.

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

As a result of the failure of the Company to timely file this Quarterly Report on Form 10-Q, the Company triggered an event of default (the “Event of Default”) under the Notes.

On November 22, 2023, the Company and the Investor entered into the Waiver as described above whereby the Investor waived the Event of Default.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On November 16, 2023, the Company, received a notice from the New York Stock Exchange (the “NYSE”) indicating that the Company is not in compliance with Section 802.01E of the NYSE Listed Company Manual as a result of its failure to timely file this Quarterly Report on Form 10-Q with the Securities and Exchange Commission (the “SEC”).

The NYSE informed the Company that, under NYSE rules, the Company will have six months from November 14, 2023 to file this Quarterly Report on Form 10-Q with the SEC and that the Company could regain compliance with the NYSE listing standards at any time prior to that date by filing its Form 10-Q. As such, the Company regained compliance with the NYSE listing standards as a result of filing this Quarterly Report on Form 10-Q on the date hereof.


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Item 6. Exhibits.
  Incorporated by Reference
Exhibit No.Exhibit TitleFormFile No.Exhibit No.Filing DateFiled
Herewith
4.1
X
10.1
X
10.2
X
31.1X
31.2X
32.1*
32.2*
101.INSXBRL Instance Document.X
101.SCHXBRL Taxonomy Extension Schema Document.X
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.X
101.DEFXBRL Taxonomy Extension Definition Linkbase Document.X
101.LABXBRL Taxonomy Extension Label Linkbase Document.X
101.PREXBRL Taxonomy Extension Presentation Linkbase Document.X
104Coverpage Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)X
* Furnished herewith
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on November 22, 2023.
FISKER INC.
By:/s/ Dr. Geeta Gupta-Fisker
Name:Dr. Geeta Gupta-Fisker
Title:Chief Financial Officer and Chief Operating Officer
49
fiskersupplementalindent
Execution Version THIRD SUPPLEMENTAL INDENTURE TO INDENTURE Dated as of November [], 2023 WILMINGTON SAVINGS FUND SOCIETY, FSB, as Trustee, [___________], as Collateral Agent, and The Guarantors (as defined herein) signatory hereto Series A-1 Senior Convertible Note Due 2025 Series B-1 Senior Convertible Note Due 2025

 
FISKER INC. THIRD SUPPLEMENTAL INDENTURE TO INDENTURE DATED JULY 11, 2023 Series A-1 Senior Convertible Note Due 2025 Series B-1 Senior Convertible Note Due 2025 THIRD SUPPLEMENTAL INDENTURE, dated as of November [ ], 2023 (this “Third Supplemental Indenture”), by and among FISKER INC., a Delaware corporation (the “Company”), [__________] (“Collateral Agent”), the Guarantors (as defined below), and WILMINGTON SAVINGS FUND SOCIETY, FSB, as Trustee (the “Trustee”). RECITALS A. The Company filed a registration statement on Form S-3 on December 23, 2021 (File Number 333-261875) (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”) and the Registration Statement has been declared effective by the SEC on January 4, 2022. B. The Company has heretofore executed and delivered to the Trustee an Indenture, dated as of July 11, 2023 (the “Base Indenture”), the First Supplemental Indenture dated July 11, 2023 (the “First Supplemental Indenture”) and the Second Supplemental Indenture dated September 29, 2023 (the “Second Supplemental Indenture” and, collectively with the Base Indenture and the First Supplemental Indenture, the “Indenture”), providing for the issuance from time to time of Securities (as defined in the Indenture) by the Company. C. The Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). D. Section 2 of the Indenture provides for various matters with respect to any series of Securities issued under the Indenture to be established in an indenture supplemental to the Indenture. E. Section 9.01 of the Indenture provides that, without the consent of the Holders, for the Company and the Trustee may enter into an indenture supplemental to the Indenture to establish the form or terms of Securities of any series as provided by Section 2 of the Indenture. F. In accordance with that certain Securities Purchase Agreement, dated July 10, 2023, as amended by that certain Amendment No. 1 to Securities Purchase Agreement dated as of September 29, 2023 (as so amended, the “Securities Purchase Agreement”), by and among the Company and the investors party thereto, at the applicable Closing (as defined in the Securities Purchase Agreement) the Company sold $510,000,000 in original aggregate principal amount of Notes.

 
G. The parties hereby desire to supplement the Indenture pursuant to this Third Supplemental Indenture to set forth the terms and conditions of the Security Documents (defined below). NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH, for and in consideration of the premises and the issuance of the series of Securities provided for herein, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities of such series, as follows: ARTICLE I RELATION TO INDENTURE; DEFINITIONS Section 1.1. RELATION TO INDENTURE. This Third Supplemental Indenture constitutes an integral part of the Indenture. Section 1.2. DEFINITIONS. For all purposes of this Third Supplemental Indenture: (a) Capitalized terms used herein without definition shall have the meanings specified in the Indenture or in the Notes, as applicable; (b) All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Third Supplemental Indenture; and (c) The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Third Supplemental Indenture. ARTICLE II GUARANTY; PLEDGE AND GRANT OF SECURITY INTERESTS Section 2.1. GUARANTY. The obligations under the Transaction Documents will be guaranteed by the direct and indirect subsidiaries of the Company set forth on Schedule 2.1 hereto (collectively, the “Guarantors”), as evidenced by a guaranty to be entered into by the Guarantors in favor of the Collateral Agent (the “Guaranty”). Section 2.2. SECURITY. The Notes shall be secured by a first priority perfected security interest in substantially all of the existing and future assets of the Company and the Guarantors, including a pledge of all of the share capital in each of the Guarantors, as evidenced by a pledge agreement in the form attached hereto as Exhibit A (the “Pledge Agreement and together with a security agreement by and among the Company, the Collateral Agent and the Guarantors, this Third Supplemental Indenture and such other security documents and agreements from time to time entered into by the Company or its Subsidiaries in favor of the Collateral Agent to secure the obligations under the Transaction Documents, as each may be amended, restated, supplemented or otherwise modified from time to time, collectively, the “Security Documents”).

 
Section 2.3. COLLATERAL AGENT. [_________] shall initially be the collateral agent hereunder and under the other Security Documents (in such capacity, the “Collateral Agent”), and (ii) each holder of Notes (each, an “Investor”), by accepting such Notes, shall be deemed to have authorized the Collateral Agent (and its officers, directors, employees and agents) to take such action on such Investor’s behalf in accordance with the terms of the Transaction Documents. The Collateral Agent shall not have, by reason hereof or any of the other Security Documents, a fiduciary relationship in respect of any Investor. Neither the Collateral Agent nor any of its officers, directors, employees or agents shall have any liability to any Investor for any action taken or omitted to be taken in connection hereof or any other Security Document except to the extent caused by its own gross negligence or willful misconduct, and the Investor agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors, employees and agents (collectively, the “Collateral Agent Indemnitees”) from and against any losses, damages, liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such Collateral Agent Indemnitee, whether direct, indirect or consequential, arising from or in connection with the performance by such Collateral Agent Indemnitee of the duties and obligations of Collateral Agent pursuant hereto or any of the Security Documents. The Collateral Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Holders, and such instructions shall be binding upon all holders of Notes; provided, however, that the Collateral Agent shall not be required to take any action which, in the reasonable opinion of the Collateral Agent, exposes the Collateral Agent to liability or which is contrary to this Agreement or any other Transaction Document or applicable law. The Collateral Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder or thereunder, upon advice of counsel selected by it. Section 2.4. SUCCESSOR COLLATERAL AGENT. (a) The Collateral Agent may resign from the performance of all its functions and duties hereunder and under the other Transaction Documents at any time by giving at least ten (10) Business Days’ prior written notice to the Company and each holder of Notes. Such resignation shall take effect upon the acceptance by a successor Collateral Agent of appointment pursuant to clauses (ii) and (iii) below or as otherwise provided below. If at any time the Collateral Agent (together with its affiliates) beneficially owns less than $100,000 in aggregate principal amount of Notes, the holders of a majority in aggregate principal amount of the Notes then outstanding may, by written consent, remove the Collateral Agent from all its functions and duties hereunder and under the other Transaction Documents. (b) Upon any such notice of resignation or removal, the Required Holders shall appoint a successor collateral agent. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor collateral agent, such successor collateral agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the collateral agent, and the Collateral Agent shall be discharged from its duties and obligations under this Agreement and the other Transaction Documents. After the Collateral Agent’s resignation or removal hereunder

 
as the collateral agent, the provisions of Section 2.3 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Collateral Agent under this Agreement and the other Transaction Documents. (c) If a successor collateral agent shall not have been so appointed within ten (10) Business Days of receipt of a written notice of resignation or removal, the Collateral Agent shall then appoint a successor collateral agent who shall serve as the Collateral Agent until such time, if any, as the Required Holders appoint a successor collateral agent as provided above. (d) In the event that a successor Collateral Agent is appointed pursuant to the provisions of this Section 2.4 that is not an Investor or an affiliate of any Investor (or the Required Holders or the Collateral Agent (or its successor), as applicable, notify the Company that they or it wants to appoint such a successor Collateral Agent pursuant to the terms of this Section 2.4), the Company and each Subsidiary thereof covenants and agrees to promptly take all actions reasonably requested by the Required Holders or the Collateral Agent (or its successor), as applicable, from time to time, to secure a successor Collateral Agent satisfactory to the requesting part(y)(ies), in their sole discretion, including, without limitation, by paying all reasonable and customary fees and expenses of such successor Collateral Agent, by having the Company and each Subsidiary thereof agree to indemnify any successor Collateral Agent pursuant to reasonable and customary terms and by each of the Company and each Subsidiary thereof executing a collateral agency agreement or similar agreement and/or any amendment to the Security Documents reasonably requested or required by the successor Collateral Agent. Section 2.5. PERFECTION. To the extent required by the Security Documents, the Company shall deliver to the Collateral Agent (A) original certificates (if any) (I) representing the Subsidiaries’ shares of share capital to the extent such subsidiary is a corporation or otherwise has certificated equity and (II) representing all other equity interests and all promissory notes required to be pledged thereunder, in each case, accompanied by undated share powers and allonges executed in blank and other proper instruments of transfer and (B) appropriate financing statements on Form UCC-1 to be duly filed in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by each Security Document . Section 2.6. COVENANTS. In addition to any covenants set forth in Article 4 of the Indenture, the Company shall comply with the additional covenants set forth in Security Agreement and the Guaranty. Section 2.7. TRUSTEE MATTERS. (a) Duties. The Trustee has no obligation to undertake any of the duties of the Collateral Agent as set forth is this Third Supplemental Indenture. (b) Further Instruments and Acts. Upon request of the Trustee, the Company will execute and deliver such further instruments and perform such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of the Indenture and this Third Supplemental Indenture.

 
(c) Expense. Notwithstanding anything in the Indenture to the contrary, any actions taken by the Trustee in any capacity shall be at the Company’s reasonable expense. ARTICLE III MISCELLANEOUS PROVISIONS Section 3.1. PAYMENT OF EXPENSES. The Company shall pay all reasonable, documented out-of-pocket costs and expenses of the Trustee relating to the execution and delivery of this Third Supplemental Indenture, the Security Documents and the Guaranty, as applicable, and all compensation and expenses of the Trustee under the Indenture in accordance with the provisions of Section 7.07 of the Indenture. Section 3.2. TRUSTEE AND COLLATERAL AGENT NOT RESPONSIBLE FOR RECITALS. The recitals herein contained are made by the Company and not by the Trustee or the Collateral Agent, and the Trustee and the Collateral Agent assume no responsibility for the correctness thereof. The Trustee and the Collateral Agent make no representation as to the validity or sufficiency of this Third Supplemental Indenture. Section 3.3. ADOPTION, RATIFICATION AND CONFIRMATION. Except as expressly amended, supplemented and modified by this Third Supplemental Indenture, the Base Indenture, the First Supplemental Indenture and the Second Supplemental Indenture are in all respects ratified and confirmed and the Base Indenture, the First Supplemental Indenture and the Second Supplemental Indenture as so amended hereby shall be read, taken and construed as one and the same instrument. Section 3.4. CONFLICT WITH INDENTURE; TRUST INDENTURE ACT. Notwithstanding anything to the contrary in the Indenture, if any conflict arises between the terms and conditions of this Third Supplemental Indenture (including, without limitation, the terms and conditions of the Notes) and the Indenture, the terms and conditions of this Third Supplemental Indenture (including the Notes) shall control; provided, however, that if any provision of this Third Supplemental Indenture or the Notes limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required thereunder to be a part of and govern this Third Supplemental Indenture, the latter provisions shall control. If any provision of this Third Supplemental Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provisions shall be deemed to apply to the Indenture as so modified or excluded, as the case may be. Section 3.5. AMENDMENTS; WAIVER. This Third Supplemental Indenture may be amended by the written consent of the Company and the Required Holders (as defined in the Notes); provided however, no amendment shall adversely impact the rights, duties, immunities or liabilities of the Trustee without its prior written consent. Notwithstanding anything in any other Transaction Document to the contrary, no amendment to any Transaction Document that adversely impact the rights, duties, immunities or liabilities of the Trustee hereunder, pursuant to the Indenture and/or the Notes, as applicable, shall be effective without the Trustee’s prior written consent. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.

 
Section 3.6. SUCCESSORS. This Third Supplemental Indenture shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Notes. Section 3.7. SEVERABILITY; ENTIRE AGREEMENT. If any provision of this Third Supplemental Indenture shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Third Supplemental Indenture in that jurisdiction or the validity or enforceability of any provision of this Third Supplemental Indenture in any other jurisdiction. Section 3.8. The Indenture, this Third Supplemental Indenture, the Transaction Documents and the exhibits hereto and thereto set forth the entire agreement and understanding of the parties related to this transaction and supersedes all prior agreements and understandings, oral or written. Section 3.9. COUNTERPARTS. This Third Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. Section 3.10. GOVERNING LAW. This Third Supplemental Indenture and the Indenture shall each be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Except as otherwise required by Section 22 of the Notes, the Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The Borough of Manhattan, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate to preclude any Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to such Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of such Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 22 of the Notes. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS THIRD SUPPLEMENTAL INDENTURE OR ANY TRANSACTION CONTEMPLATED HEREBY. Section 3.11. U.S.A. PATRIOT ACT. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. PATRIOT Act, the Trustee is required to obtain, verify,

 
and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Supplemental Indenture agree that they shall provide the Trustee with such information as it may reasonably request in order for the Trustee to satisfy the requirements of the U.S.A. PATRIOT Act. [The remainder of the page is intentionally left blank]

 
IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed on the date or dates indicated in the acknowledgments and as of the day and year first above written. FISKER INC. By:___________________________ Name: Title: FISKER GROUP INC. By:___________________________ Name: Title: FISKER GMBH By:___________________________ Name: Title:

 
[COLLATERAL AGENT] as Collateral Agent By:________________________ Name: Title:

 
WILMINGTON SAVINGS FUND SOCIETY, FSB, as Trustee By:___________________________ Name: Patrick J. Healy Title: Senior Vice President

 
Schedule 2.1

 
Exhibit A Form of Pledge Agreement

 
pledgeagreementfiskeredg
PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of November [ ] , 2023 (this “Agreement”), made by Fisker Inc., a company organized under the laws of Delaware, with offices located at 1888 Rosecrans Avenue, Manhattan Beach, California 90266 (the “Company”), and each of the undersigned Subsidiaries (as defined below) of the Company from time to time, if any (each a “Grantor” and together with the Company, collectively, the “Grantors”), in favor of [________], in its capacity as collateral agent (together with its successors and assignees, in such capacity, the “Collateral Agent”) for the Noteholders (as defined below). W I T N E S S E T H: WHEREAS, the Company is party to that certain Securities Purchase Agreement, dated as of July 10, 2023, (as amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance with the terms thereof, the “Securities Purchase Agreement”) by and among the Company and each party listed as an “Investor” on the Schedule of Investors attached thereto (each an “Investor” and collectively, the “Investors”), pursuant to which the Company shall be required to sell, and the Investor shall purchase or have the right to purchase, the “Notes” issued pursuant thereto (as such Notes may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance with the terms thereof, collectively, the “Notes”); WHEREAS, the Company is party to that Indenture, dated as of July 11, 2023, by and between the Company and Wilmington Savings Fund Society, FSB, as trustee, as amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance with the terms thereof “Indenture”) providing for the issuance from time to time of Securities (as defined in the Indenture) by the Company; WHEREAS, under the terms of the Indenture, the Investor shall have executed and delivered to the Collateral Agent this Agreement providing for the grant to the Collateral Agent, for the ratable benefit of itself and the Noteholders, of a valid, enforceable, and perfected security interest in certain assets of each Grantor to secure all of the Company’s obligations under the Transaction Documents; and WHEREAS, the Grantors are Affiliates that are part of a common enterprise such that each Grantor will derive substantial direct and indirect financial and other benefits from the consummation of the transactions contemplated under the Transaction Documents and, accordingly, the consummation of such transactions are in the best interests of each Grantor; NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Investor to perform under the Securities Purchase Agreement, each Grantor agrees with the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, as follows: SECTION 1. Definitions. (a) Reference is hereby made to the Securities Purchase Agreement, the Indenture and the Notes for a statement of the terms thereof. All terms used in this Agreement and

 
2 the recitals hereto which are defined in the Securities Purchase Agreement, the Notes or in the Code, and which are not otherwise defined herein shall have the same meanings herein as set forth therein; provided that terms used herein which are defined in the Code on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of the Code except as the Collateral Agent may otherwise determine in its sole and absolute discretion. (b) As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms: “Affiliate” of any Person means any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person and any officer or director of such Person. Without limiting the generality of the foregoing, a Person shall be deemed to be “controlled by” any other Person if such Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. “Bankruptcy Code” means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable bankruptcy, insolvency or similar laws). “Bankruptcy Event of Default” shall have the meaning set forth in the Note. “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any Governmental Authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day. “Investor” or “Investors” shall have the meaning set forth in the recitals hereto. “Capital Stock” means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights or other securities exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any Person that is not an individual or a corporation, any and all partnership, membership, trust or other equity interests of such Person. “Code” means Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non- perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “Code” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 
3 “Collateral” shall have the meaning set forth in Section 3(a) of this Agreement. “Collateral Agent” shall have the meaning set forth in the preamble hereto. “Company” shall have the meaning set forth in the preamble hereto. “Domestic Subsidiary” means any Subsidiary other than a Foreign Subsidiary. “Event of Default” shall have the meaning set forth in Section 4(a) of the Notes. “Excluded Accounts” means any deposit accounts or securities accounts that are maintained exclusively by any Grantor for one or more of the purposes described in the following clauses: (a) payroll, healthcare and other employee wage and benefit accounts and (b) tax accounts, including, without limitation, sales tax accounts and payroll or withholding tax accounts. “Excluded Property” means (a)(i) any governmental licenses or state or local franchises, charters and authorizations to the extent the grant of a security interest is prohibited or restricted thereby (except to the extent such prohibition or restriction is ineffective under the Code or other applicable law) other than proceeds and receivables thereof the assignment of which is expressly deemed effective under the Code or other applicable law notwithstanding such prohibition; (ii) any property or assets as to which pledges thereof or security interests therein are prohibited or restricted by applicable law (including any requirement to obtain the consent of any (x) governmental authority or (y) similar regulatory third party, in each case, except to the extent such consent has been obtained) after giving effect to the applicable anti-assignment provisions of the Code and other applicable law (provided that such property shall be Excluded Property only to the extent and for so long as such prohibition is in effect); (iii) any lease, license or other contract or agreement or any property or assets subject to an agreement binding on and relating to such property at the time of acquisition thereof (and not entered into in contemplation of such acquisition), to the extent that a grant of a Lien therein would violate or invalidate, such lease, license or other contract or agreement or create a right of termination or right of acceleration in favor of any party (other than the Company or any of its Subsidiaries) thereto or otherwise require consent (other than the Company or any of its Subsidiaries) thereunder (after giving effect to the applicable anti-assignment provisions of the Code or other applicable law) other than proceeds and receivables thereof; (iv) any Excluded Accounts; (v) any intent-to-use trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto; (iv) any property subject to a purchase money arrangement or finance lease to the extent that a grant of a security interest therein would violate or invalidate such purchase money arrangement or finance lease or create a right of termination in favor of any other party thereto (other than the Company or any of its Subsidiaries) after giving effect to the applicable anti-assignment provisions of the UCC and other applicable law, other than proceeds and receivables thereof the assignment of which is expressly deemed effective under the Code or other applicable law notwithstanding such prohibition; (vii) the portion of the voting Capital Stock of any Foreign Subsidiary in excess of 65% of the issued and outstanding voting Capital Stock of such Foreign Subsidiary to the extent that at any time the pledging of more than 65% of the total outstanding voting Capital Stock of such Foreign Subsidiary would result in a material adverse tax consequence to a Grantor; (viii) any “margin stock”, as such term is defined in Regulation U promulgated by the Board of Governors of the Federal Reserve System of the United States of America.

 
4 Notwithstanding anything to the contrary, “Excluded Property” shall not include any proceeds, products, substitutions or replacements of any “Excluded Property” referred to in clauses (i) through (viii) (unless such proceeds, substitutions or replacements would constitute “Excluded Property” referred to in any of clauses (i) through (viii)). “Foreign Subsidiary” means any Subsidiary of a Grantor organized under the laws of a jurisdiction other than the United States, any of the states thereof, Puerto Rico or the District of Columbia. “Governmental Authority” means any nation or government, any Federal, state, city, town, municipality, county, local, foreign or other political subdivision thereof or thereto and any department, commission, board, bureau, court, tribunal, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. “Guaranty” mean any guarantee in form and substance acceptable to and in favor of the Collateral Agent, for the ratable benefit of itself and the Noteholders, with respect to the Company’s obligations under the Securities Purchase Agreement, the Notes and the other Transaction Documents (as defined in the Securities Purchase Agreement). “Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency law or law for the relief of debtors, any proceeding relating to assignments for the benefit of creditors, formal or informal moratoria, compositions, or extensions generally with creditors, or any proceeding seeking reorganization, arrangement, or other similar relief. “Lien” means any mortgage, lien, pledge, charge, security interest, adverse claim or other encumbrance upon or in any property or assets. “Noteholders” means, at any time, the holders of the Notes at such time. “Notes” shall have the meaning set forth in the recitals hereto. “Obligations” shall have the meaning set forth in Section 4 of this Agreement. “Paid in Full” or “Payment in Full” means the indefeasible payment in full in cash of all of the Obligations. “Perfection Requirement” or “Perfection Requirements” shall have the meaning set forth in Section 5(j) of this Agreement. “Permitted Liens” shall have the meaning set forth in the Notes. “Person” means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or other enterprise or entity or Governmental Authority. “Pledged Collateral” shall have the meaning set forth in Section 2(a).

 
5 “Pledged Entity” means, each Person listed from time to time on Schedule I hereto as a “Pledged Entity,” together with each other Person, any right in or interest in or to all or a portion of whose Securities or Capital Stock is acquired or otherwise owned by a Grantor after the date hereof. “Pledged Equity” means all of each Grantor’s right, title and interest in and to all of the Securities and Capital Stock now or hereafter owned by such Grantor (including, without limitation, those interests listed opposite the name of such Grantor on Schedule I), regardless of class or designation, including all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto, also including, without limitation, any certificates representing such Securities and/or Capital Stock, the right to receive any certificates representing any of such Securities and/or Capital Stock, all warrants, options, subscription, share appreciation rights and other rights, contractual or otherwise, in respect thereof, and the right to receive dividends, distributions of income, profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and cash, instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange for any or all of the foregoing. “Securities Purchase Agreement” shall have the meaning set forth in the recitals hereto. “Subsidiary” means any Person in which a Grantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, “Subsidiaries”. SECTION 2. Pledge of Pledged Collateral. (a) As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor hereby assigns and pledges to the Collateral Agent, and hereby grants to the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security interest in, all of such Grantor’s right, title and interest in, to and under all of the following, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired: (i) the Pledged Equity; (ii) subject to all payments of principal or interest, dividends, distributions, cash, Securities, Instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the Pledged Equity; (iii) all rights and privileges of such Grantor with respect to the Securities and other property referred to in clauses (i) and (ii) and above; (iv) all Proceeds of, and Security Entitlements in respect of, any of the foregoing and (v) all books and records pertaining to the items described in clauses (i) through (iv) above (the items referred to in clauses (i) through (v) above being collectively referred to as the “Pledged Collateral”); provided that the Pledged Collateral shall not include Excluded Property. (b) All of the Pledged Equity is presently owned by the applicable Grantor as set forth in Schedule I free and clear of all Liens other than Permitted Liens, and is presently represented by the certificates listed on Schedule I hereto (if applicable). As of the date hereof, there are no existing options, warrants, calls or commitments of any character whatsoever relating to the Pledged Equity other than as contemplated and permitted by the Transaction Documents. Each Grantor is the sole holder of record and the sole beneficial owner of the Pledged Equity, as

 
6 applicable. All of the Pledged Equity has been duly and validly authorized and issued by the issuer thereof and (i) in the case of Pledged Equity (other than Pledged Equity consisting of limited liability company interests or partnership interests which, pursuant to the relevant organizational or formation documents, cannot be fully paid and non-assessable), is fully paid and non-assessable. (c) The assignment, pledge, Lien and security interest granted in Section 2(a) of this Agreement are granted as security only and shall not subject the Collateral Agent or any Investor to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Pledged Collateral. SECTION 3. Grant of Security Interest (a) As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor hereby pledges and assigns to the Collateral Agent, and hereby grants to the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security interest in, all of such Grantor’s right, title and interest in, to and under all personal property and assets of such Grantor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind, nature and description, whether tangible or intangible (together with the Pledged Collateral, the “Collateral”), including, without limitation, the following: all Accounts; all Chattel Paper (whether tangible or Electronic Chattel Paper); all Commercial Tort Claims, including, without limitation, those specified on Schedule II hereto; all Documents; all Equipment; all Fixtures; all General Intangibles (including, without limitation, all Payment Intangibles); all Goods; all Instruments; all Inventory; all Investment Property (and, regardless of whether classified as Investment Property under the Code, all Pledged Equity); all Intellectual Property and all Licenses; all Letter-of-Credit Rights; all cash and other property from time to time deposited therein, and all monies and property in the possession or under the control of the Collateral Agent or any Noteholder or any Affiliate, representative, agent or correspondent of the Collateral Agent or any such Noteholder; all other tangible and intangible personal property of each Grantor (whether or not subject to the Code), including, without limitation, all Deposit Accounts and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions, rents, profits, income, benefits, substitutions and replacements of and to any of the property of any Grantor described in the preceding clauses of this Section 3(a) (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and warranties now or hereafter held by each Grantor in respect of any of the items listed above), and all books and other Records, in each case, to the extent of such Grantor’s rights therein, that at any time evidence or contain information relating to any of the property described in the preceding clauses of this Section 3(a) or are otherwise necessary or helpful in the collection or realization thereof; and all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral; in each case howsoever any Grantor’s interest therein may arise or appear (whether by ownership, security interest, claim or otherwise). (b) Notwithstanding anything herein to the contrary, the term “Collateral” shall not include any Excluded Property.

 
7 SECTION 4. Security for Obligations. The Lien and security interest created hereby in the Collateral constitutes continuing collateral security for all of the following obligations, whether direct or indirect, absolute or contingent, and whether now existing or hereafter incurred (collectively, the “Obligations”): (a) the payment by the Company and each other Grantor, as and when due and payable (by scheduled maturity, required prepayment, acceleration, demand or otherwise), of all amounts from time to time owing by it in respect of the Securities Purchase Agreement, this Agreement, the Notes and the other Transaction Documents; and (b) the due and punctual performance and observance by each Grantor of all of its other obligations from time to time existing in respect of any of the Transaction Documents, including without limitation, with respect to any conversion or redemption rights of the Noteholders under the Notes. SECTION 5. Representations and Warranties. Each Grantor represents and warrants as follows: (a) Schedule III hereto sets forth (i) the exact legal name of each Grantor, and (ii) the state of incorporation, organization or formation and the organizational identification number of each Grantor in such state. The information set forth in Schedule III hereto with respect to such Grantor is true and accurate in all respects. Such Grantor has not previously changed its name (or operated under any other name), jurisdiction of organization or organizational identification number from those set forth in Schedule III hereto except as disclosed in Schedule III hereto. (b) There is no pending or, to its knowledge, written notice threatening any action, suit, proceeding or claim affecting any Grantor before any Governmental Authority or any arbitrator, or any order, judgment or award issued by any Governmental Authority or arbitrator, in each case, that may adversely affect the grant by any Grantor, or the perfection, of the Lien and security interest purported to be created hereby in the Collateral, or the exercise by the Collateral Agent of any of its rights or remedies hereunder. (c) The exercise by the Collateral Agent of any of its rights and remedies hereunder will not contravene any law or any contractual restriction binding on or otherwise affecting any Grantor or any of its properties and will not result in or require the creation of any Lien, upon or with respect to any of its properties other than as granted pursuant to this Agreement. (d) Subject to Section 6, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority, is required for (i) the grant by each Grantor, or the perfection, of the Lien and security interest purported to be created hereby in the Pledged Collateral, or (ii) the exercise by the Collateral Agent of any of its rights and remedies hereunder, except for the filing under the Code as in effect in the applicable jurisdiction of the financing statements to be filed on the date of this Agreement (a “Perfection Requirement” and collectively, the “Perfection Requirements”). (e) Subject to Section 6, this Agreement creates in favor of the Collateral Agent a legal, valid and enforceable Lien on and security interest in the Collateral, as security for the Obligations. The performance of the Perfection Requirements results in (and when performed in

 
8 accordance with Sections 2, 3 and 6 shall result in) the perfection of such Lien on and security interest in the Collateral, to the extent that such Lien and security interest can be perfected by filing a financing statement under the Code. Such Lien and security interest is (or in the case of Collateral in which any Grantor obtains any right, title or interest after the date hereof, will be), subject only to Permitted Liens and the Perfection Requirements, a first priority, valid, enforceable and perfected Lien on and security interest in all personal property of each Grantor (other than Excluded Property). (f) Such Grantor (i) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation and (ii) has all requisite corporate, limited liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated and to execute and deliver this Agreement and each other Transaction Document to which such Grantor is a party, and to consummate the transactions contemplated hereby and thereby. (g) The execution, delivery and performance by each Grantor of this Agreement and each other Transaction Document to which such Grantor is a party (i) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (ii) do not and will not contravene its charter or by-laws, limited liability company or operating agreement, certificate of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on such Grantor or its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Transaction Document) upon or with respect to any of its assets or properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to it or its operations or any of its assets or properties. (h) This Agreement has been duly executed and delivered by each Grantor and is the legal, valid and binding obligation of such Grantor, enforceable against such Grantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law). Each of the other Transaction Documents to which any Grantor is or will be a party, when delivered, duly executed and delivered by such Grantor and the legal, valid and binding obligation of such Grantor, enforceable against such Grantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law). (i) There are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived. SECTION 6. Covenants as to the Collateral. Until all of the Obligations shall have been fully performed and Paid in Full, unless the Collateral Agent shall otherwise consent in writing (in its sole and absolute discretion): (a) Covenant to Perfect: Guaranty.

 
9 (i) No later than the fifth Business Day following the date of this Agreement (or such later date as the Collateral Agent may agree), the Grantors shall (A) execute and deliver to the Collateral Agent, for recording with the United States Patent and Trademark Office and United States Copyright Office, as applicable, a short-form grant of security interest, in form and substance reasonably acceptable to the Collateral Agent, with respect to certain Intellectual Property included in the Collateral; and (B) deliver, or caused to the Collateral Agent the originals of any certificates evidencing any Pledged Equity, together with customary indorsements in blank. (ii) Each Grantor agrees that in furtherance of Section 3, this Agreement shall be supplemented by a security agreement or other similar agreements or instruments in form and substance satisfactory to the Collateral Agent which shall be executed and delivered by such Grantor in favor of the Collateral Agent no later than December 8, 2023 (or such later date as the Collateral Agent may agree). (iii) Each Grantor (other than the Company) shall execute and deliver a Guaranty no later than December 8, 2023 (or such later date as the Collateral Agent may agree). Further Assurances. Each Grantor will, at its expense, at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action that the Collateral Agent may reasonably request in order to: (i) perfect and protect the Lien and security interest of the Collateral Agent created hereby; (ii) enable the Collateral Agent to exercise and enforce its rights and remedies hereunder in respect of the Collateral; or (iii) otherwise effect the purposes of this Agreement. (c) Transfers and Other Liens. (i) Except as otherwise expressly permitted in the other Transaction Documents, no Grantor shall, directly or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any Collateral whether in a single transaction or a series of related transactions, other than (A) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by such Grantor for fair value in the ordinary course of business consistent with past practices and (B) sales of Inventory and product in the ordinary course of business. (ii) Except as expressly permitted in the other Transaction Documents, no Grantor shall, directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its Capital Stock. (iii) No Grantor shall, directly or indirectly, without the prior written consent of the Required Holders, (A) issue any Notes (other than as contemplated by the Securities Purchase Agreement and the Notes) or (B) issue any other Securities that would cause a breach or default under the Notes. (iv) Except as expressly permitted in the other Transaction Documents, no Grantor shall enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate, except in the ordinary course of business in a manner and to an extent consistent with past practice and

 
10 necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it than would be obtainable in a comparable arm’s length transaction with a Person that is not an Affiliate thereof. (v) No Grantor will create, suffer to exist or grant any Lien upon or with respect to any Collateral other than a Permitted Lien. (d) Future Subsidiaries. If any Grantor hereafter creates or acquires any Domestic Subsidiary, simultaneously with the creation or acquisition of such Subsidiary, such Grantor shall cause such Subsidiary to become a party to this Agreement as an additional “Grantor” hereunder and deliver to the Collateral Agent such additional documents and instruments required to perfect the pledge and granting of security interests hereunder. SECTION 7. Additional Provisions Concerning the Collateral. (a) To the maximum extent permitted by applicable law, and for the purpose of taking any action that the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes the Collateral Agent to execute any such agreements, instruments or other documents in such Grantor’s name and to file such agreements, instruments or other documents in such Grantor’s name and in any appropriate filing office, (ii) authorizes the Collateral Agent at any time and from time to time to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral (including, without limitation, any such financing statements that (A) describe the Collateral as “all assets” or “all personal property” (or words of similar effect) or that describe or identify the Collateral by type or in any other manner as the Collateral Agent may determine regardless of whether any particular asset of such Grantor falls within the scope of Article 9 of the Code or whether any particular asset of such Grantor constitutes part of the Collateral, and (B) contain any other information required by Part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment, including, without limitation, whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor) and (iii) ratifies such authorization to the extent that the Collateral Agent has filed any such financing or continuation statements, or amendments thereto, prior to the date hereof. (b) Each Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and proxy, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to time in the Collateral Agent’s discretion, to take any action and to execute any instrument which the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement. This power is coupled with an interest and is irrevocable until all of the Obligations are fully performed and Paid in Full. (c) As long as no Event of Default shall have occurred and be continuing and, other than in the case of a Bankruptcy Event of Default, the Collateral Agent shall have given written notice to the Grantors of the suspension of the Grantors’ rights under this Section 7(c), Grantor shall have the right, from time to time, to vote and give consents with respect to the Pledged Equity, or any part thereof for all purposes not inconsistent with the provisions of this Agreement, the Securities Purchase Agreement or any other Transaction Document; provided, however, that no vote shall be cast, and no consent shall be given or action taken, which would have the effect of impairing the position or interest of the Collateral Agent in respect of the Pledged

 
11 Equity or which would authorize, effect or consent to (unless and to the extent expressly permitted by the Securities Purchase Agreement) the dissolution or liquidation, in whole or in part, of a Pledged Entity; the consolidation or merger of a Pledged Entity with any other Person; the sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of the Collateral Agent; any change in the authorized number of shares, the stated capital or the authorized share capital of a Pledged Entity or the issuance of any additional shares of its Capital Stock; or the alteration of the voting rights with respect to the Capital Stock of a Pledged Entity. (d) Each Grantor shall be entitled, from time to time, to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged Equity to the extent not in violation of the Securities Purchase Agreement other than any and all: (A) dividends and interest paid or payable other than in cash in respect of any Pledged Equity, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Equity; (B) dividends and other distributions paid or payable in cash in respect of any Pledged Equity in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of a Pledged Entity; and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for, any Pledged Equity; provided, however, that until actually paid all rights to such distributions shall remain subject to the Lien created by this Agreement; and (e) all dividends and interest (other than such cash dividends and interest as are permitted to be paid to any Grantor in accordance with clause (i) above) and all other distributions in respect of any of the Pledged Equity, whenever paid or made, shall be delivered to the Collateral Agent to hold as Pledged Equity and shall, if received by any Grantor, be received in trust for the benefit of the Collateral Agent (for the ratable benefit of the Collateral Agent and the Noteholders), be segregated from the other property or funds of such Grantor, and be forthwith delivered to the Collateral Agent as Pledged Equity in the same form as so received (with any necessary endorsement). SECTION 8. Amendments to Notes (a) Section 4(a) of the Notes (including the form of Note attached to the Securities Purchase Agreement) are hereby amended to add the following: “(xvi) any provision of any Transaction Document (including, without limitation) the Security Documents or the Guaranty shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall be contested by the Company or any Subsidiary, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the Company or any Subsidiary shall deny in writing that it has any liability or obligation purported to be created under any Transaction Document (including, without limitation, the Security Documents and the Guaranty);

 
12 (xvii) any Security Document shall for any reason fail or cease to create a separate valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien (as defined in the Securities Purchase Agreement) on the Collateral (as defined in the Security Documents) in favor of the Collateral Agent (as defined in the Securities Purchase Agreement) or any material provision of any Security Document shall at any time for any reason cease to be valid and binding on or enforceable against the Company or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company or any governmental authority having jurisdiction over the Company, seeking to establish the invalidity or unenforceability thereof;” (b) Each of the Notes (including the form of Note attached to the Securities Purchase Agreement) are hereby amended to add the following as a new Section 33: 33. SECURITY. This Note and the Other Notes are secured and guaranteed to the extent and in the manner set forth in the Transaction Documents (including, without limitation, the Security Agreement, the other Security Documents and the Guaranty). (c) The last sentence of Section 20 of each of the Notes (including the form of Note attached to the Securities Purchase Agreement) is hereby amend and restated as follows: Terms used in this Note and not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed to such terms in such other Transaction Documents unless otherwise consented to in writing by the Holder. SECTION 9. Remedies Upon Event of Default; Application of Proceeds. If any Event of Default shall have occurred and be continuing: (a) The Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein, in any other Transaction Document or otherwise available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not the Code applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including, without limitation, transfer into the Collateral Agent’s name or into the name of its nominee or nominees (to the extent the Collateral Agent has not theretofore done so) and thereafter receive, for the ratable benefit of itself and the Noteholders, all payments made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of its respective Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place or places to be designated by the Collateral Agent that is reasonably convenient to both parties, and the Collateral Agent may enter into and occupy any premises owned or leased by any Grantor where the Collateral or any part thereof is located or assembled for a reasonable period in order to effectuate the Collateral Agent’s rights and remedies hereunder or under law, without obligation to any Grantor in respect of such occupation, and

 
13 (iii) without notice except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral or any part thereof in one or more parcels at public or private sale (including, without limitation, by credit bid), at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable and/or (B) lease, license or dispose of the Collateral or any part thereof upon such terms as the Collateral Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale or any other disposition of its respective Collateral shall be required by law, at least ten (10) days’ notice to any Grantor of the time and place of any public sale or the time after which any private sale or other disposition of its respective Collateral is to be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale or other disposition of any Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against the Collateral Agent and the Noteholders arising by reason of the fact that the price at which its respective Collateral may have been sold at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the Obligations, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree, and waives all rights that any Grantor may have to require that all or any part of such Collateral be marshaled upon any sale (public or private) thereof. Each Grantor hereby acknowledges that (i) any such sale of its respective Collateral by the Collateral Agent shall be made without warranty, (ii) the Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment or the like, and (iii) such actions set forth in clauses (i) and (ii) above shall not adversely affect the commercial reasonableness of any such sale of Collateral. (b) Without limiting the generality of the foregoing, if any Event of Default shall have occurred be continuing, Secured Party, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are, to the extent permitted by applicable law, hereby waived), may in such circumstances forthwith vote, collect, receive, appropriate and realize upon any Collateral. To the extent permitted by applicable law, Grantor waives all claims, damages and demands it may acquire against Secured Party arising out of the exercise by Secured Party of any rights hereunder, except for Secured Party’s gross negligence, willful misconduct or breach of this Agreement. SECTION 10. Indemnity; Expenses. (a) Each Grantor, jointly and severally, agrees to indemnify and hold harmless the Collateral Agent and each other Indemnitee (as defined in the Securities Purchase Agreement) to the same extent and subject to the same terms that the Company has agreed to indemnify the Indemnitees under Section 9(k) of the Securities Purchase Agreement, which Section 9(k) is hereby incorporated by reference, mutatis mutandis. (b) Each Grantor agrees, jointly and severally, to pay to the Collateral Agent upon demand the amount of any and all costs and expenses, including the reasonable fees, costs, expenses and disbursements of counsel for the Collateral Agent and of any experts and agents (including, without limitation, any collateral trustee which may act as agent of the Collateral

 
14 Agent), which the Collateral Agent may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment, waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights or remedies of the Collateral Agent hereunder, or (iv) the failure by any Grantor to perform or observe any of the provisions hereof. SECTION 11. Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, first-class postage prepaid and return receipt requested), telecopied, e-mailed or delivered, if to any Grantor, to the Company’s address, or if to the Collateral Agent or any Noteholder, to it at its respective address, each as set forth in Section 9(f) of the Securities Purchase Agreement. SECTION 12. Miscellaneous. (a) No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by each Grantor and the Collateral Agent (and approved by the Required Holders), and no waiver of any provision of this Agreement, and no consent to any departure by each Grantor therefrom, shall be effective unless it is in writing and signed by each Grantor and the Collateral Agent (and approved by the Required Holders), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. (b) This Agreement shall create a continuing Lien on and security interest in the Collateral and shall (i) remain in full force and effect until the full performance and Payment in Full of the Obligations, and (ii) be binding on each Grantor and all other Persons who become bound as debtor to this Agreement in accordance with Section 9-203(d) of the Code and shall inure, together with all rights and remedies of the Collateral Agent and the Noteholders hereunder, to the ratable benefit of the Collateral Agent and the Noteholders and their respective permitted successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence, without notice to any Grantor, the Collateral Agent and the Noteholders may assign or otherwise transfer their rights and obligations under this Agreement and any of the other Transaction Documents, to any other Person and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Collateral Agent and the Noteholders herein or otherwise. Upon any such assignment or transfer, all references in this Agreement to the Collateral Agent or any such Noteholder shall mean the assignee of the Collateral Agent or such Noteholder. None of the rights or obligations of any Grantor hereunder may be assigned, delegated or otherwise transferred without the prior written consent of the Collateral Agent in its sole and absolute discretion, and any such assignment, delegation or transfer without such consent of the Collateral Agent shall be null and void. (c) Upon the full performance and Payment in Full of the Obligations, (i) this Agreement and the security interests created hereby shall terminate and all rights to the Collateral shall revert to the respective Grantor that granted such security interests hereunder, and (ii) the Collateral Agent will, upon any Grantor’s request and at such Grantor’s expense, (A) return to such Grantor such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination, all without any representation, warranty or recourse whatsoever.

 
15 (d) All security interests granted or contemplated hereby shall be for the benefit of the Collateral Agent and the Noteholders. (e) Governing Law; Jurisdiction; Jury Trial. (i) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any provision or rule of law (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of New York. (ii) Each Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim, defense or objection that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under Section 9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Collateral Agent or the Noteholders from bringing suit or taking other legal action against any Grantor in any other jurisdiction to collect on a Grantor’s obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder. (iii) WAIVER OF JURY TRIAL, ETC. EACH GRANTOR IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. (iv) Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages. (f) Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. (g) This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together constitute one and the same Agreement. Delivery of any executed

 
16 counterpart of a signature page of this Agreement by pdf, facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement. (h) This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the Collateral Agent, any Noteholder or any other Person (upon (i) the occurrence of any Insolvency Proceeding of any of the Company or any Grantor or (ii) otherwise, in all cases as though such payment had not [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above written. GRANTORS: FISKER INC. By: Name: Title: FISKER GROUP INC. By: Name: Title: FISKER GMBH By: Name: Title: ACCEPTED BY: [COLLATERAL AGENT], as Collateral Agent By: ________________________________ Name: Title:

 
SCHEDULE I Pledged Equity

 
SCHEDULE II Commercial Tort Claims

 
SCHEDULE III Persons Transaction Party Name Jurisdiction of Organization Federal Employer I.D. Organizational I.D.

 
fisker-amendmentandwaive
AMENDMENT AND WAIVER AGREEMENT This Amendment and Waiver Agreement (this “Agreement”) is entered into as of the [ ] day of November, 2023, by and between Fisker Inc., a Delaware corporation (the “Company”) and the investor signatory hereto (the “Investor”), with reference to the following facts: A. Prior to the date hereof, pursuant to that Securities Purchase Agreement, dated as of July 10, 2023, by and between the Company and the investor party thereto (as amended, modified or waived from time to time, the “Securities Purchase Agreement”), the Company, among other things, issued $340,000,000 in aggregate original principal amount of Series A-1 senior convertible notes due 2025 (the “Series A-1 Notes”) and $170,000,000 in aggregate original principal amount of Series B-1 senior convertible notes due 2025 (the “Series B-1 Notes,” and together with the Series A-1 Notes, the “Existing Notes”). Capitalized terms not defined herein shall have the meaning set forth in the Securities Purchase Agreement. B. As of the date hereof, the Company has failed to timely file its quarterly report on Form 10-Q for the quarter ended September 30, 2023 (the “Existing Default”). C. The Company desires to obtain a waiver, in part, of the Existing Default such that the Existing Default shall cease to be an Event of Default (as defined in the Note) (other than with respect to Section 30(nnn) of the Notes) (the “Limited Waiver”), and, in connection therewith, has agreed to grant (the “Security Grant”) each holder of Notes (including the Existing Notes) a security interest in certain assets of the Company and its Subsidiaries, as described in (i) that certain supplemental indenture, in the form attached hereto as Exhibit A (the “Security Grant Supplemental Indenture”), (ii) that certain Pledge Agreement, in the form attached hereto as Exhibit B (the “Pledge Agreement”) and (iii) that certain security agreement, by and among the Company, the Investor and certain subsidiaries of the Company and such other security documents and certificates as specified in the Pledge Agreement, together with the Pledge Agreement and the Security Grant Supplemental Indenture, collectively, the “Security Documents”). D. The Company and the Investor desire to amend certain terms and conditions of the Transaction Documents and waive, in part, certain terms and conditions of the Transaction Documents to effectuate the Security Grant, as provided herein and in the Security Documents. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter contained, the parties hereto agree as follows: 1. Amendments. Effective as of the date hereof, the Securities Purchase Agreement, the Notes (including the Existing Notes) and each of the other Transaction Documents are hereby amended as follows (and any such agreements, covenants and related provisions therein shall be deemed incorporated by reference herein, mutatis mutandis, as amended as such): (a) The defined term “Transaction Documents” is hereby amended to include this Agreement, the Guaranty (as defined in the Pledge Agreement), the Security Grant Supplemental Indenture and the Security Documents.

 
2 (b) The defined term “Security Documents”, “Pledge Agreement”, and “Security Grant Supplemental Indenture” shall have the meaning as set forth in this Agreement and “Collateral” shall have the meaning as set forth in the Pledge Agreement. (c) The Notes (including any Existing Notes) shall be senior secured convertible notes, with such security interest as provided in the Security Documents. 2. Limited Waiver. Effective upon (a) the due execution and delivery by the Company, the Investor and, where applicable, each direct and indirect U.S. subsidiary of the Company and/or the Trustee, as applicable, of the Pledge Agreement, the Guaranty and the Security Grant Supplemental Indenture and (b) the satisfaction in full of any covenant or agreement therein required to be completed as of the date of execution thereof as required therein (other than, for the avoidance of doubt, terms or agreements to be entered into following the execution thereof), (i) in exchange for the Security Grant, the Investor hereby grants the Limited Waiver and (ii) the Investor hereby waives Section 13(o) of the Notes, in part, and amends each of the Notes and the form of Note attached to the Securities Purchase Agreement, as applicable, such that “$340,000,000” shall be reduced to “$250,000,000”. 3. Ratifications. Except as otherwise expressly provided herein, the Securities Purchase Agreement, and each other Transaction Document, is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that on and after the date hereof: (i) all references in the Securities Purchase Agreement to “this Agreement”, “hereto”, “hereof”, “hereunder” or words of like import referring to the Securities Purchase Agreement shall mean the Securities Purchase Agreement as amended by this Agreement, and (ii) all references in the other Transaction Documents to the “Securities Purchase Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Securities Purchase Agreement shall mean the Securities Purchase Agreement as amended by this Agreement. 4. Replacement Registration Statement. On or prior to January 31, 2024, the Company shall file a Registration Statement on Form S-1 (or such other available form) to register the issuance of the Additional Notes to permit one or more Additional Closings, when and as required, in accordance with the terms of the Securities Purchase Agreement (each, a “Replacement Registration Statement”). The Company shall use its reasonable best efforts to cause each Replacement Registration Statement (a) to clear all comments with the SEC as soon as reasonably practicable after the date of filing of such Replacement Registration Statement, but in no event later than the 90th (ninetieth) calendar day after such applicable filing date and (b) to be accelerated and become effective to permit each applicable Additional Closing, when and as required, in accordance with the terms of the Securities Purchase Agreement. 5. Fees. The Company shall promptly reimburse Kelley Drye & Warren, LLP (counsel to the Investor), on demand, a non-accountable amount of $75,000 for the costs and expenses incurred by it in connection with preparing and delivering this Agreement and the Security Documents and shall reimburse the Investor for any additional costs and expenses incurred in connection with the satisfaction of the terms and conditions thereof. 6. Disclosure of Transaction. On or before 9:00 a.m., New York time, on the first (1st) Business Day after the date of this Agreement, the Company shall file a Quarterly Report on Form 10-Q describing all the material terms of the transactions contemplated by this Agreement and the Pledge Agreement in the form required by the Exchange Act and attaching this Agreement

 
3 (including all attachments, the “10-Q Filing”). From and after the filing of the 10-Q Filing, the Company shall have disclosed all material, non-public information (if any) provided to the Investor by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection with the transactions contemplated hereby and pursuant to and the Pledge Agreement. In addition, effective upon the filing of the 10-Q Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and the Investor or any of its affiliates, on the other hand, relating to the transactions contemplated hereby and pursuant to the Transaction Documents, shall terminate. Notwithstanding anything contained in this Agreement to the contrary and without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees that the Investor shall not have (unless expressly agreed to by the Investor after the date hereof in a written definitive and binding agreement executed by the Company and the Investor), any duty of confidentiality with respect to any material, non-public information regarding the Company or any of its Subsidiaries. 7. Reliance by Trustee. The Company and the Investor acknowledge and agree that Wilmington Savings Fund Society, FSB, as trustee, is an intended third-party beneficiary of this Agreement and is entitled to rely upon its terms for all purposes of the Indenture (as defined in the Indenture) and the Security Grant Supplemental Indenture. 8. Miscellaneous Provisions. Section 9 of the Securities Purchase Agreement (as amended hereby) is hereby incorporated by reference herein, mutatis mutandis. [The remainder of the page is intentionally left blank]

 
IN WITNESS WHEREOF, the Investor and the Company have executed this Agreement as of the date set forth on the first page of this Agreement. COMPANY: FISKER INC. By: Name: Title:

 
IN WITNESS WHEREOF, the Investor and the Company have executed this Agreement as of the date set forth on the first page of this Agreement. INVESTOR: [INVESTOR] By: Name: Title:

 
Document

Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Henrik Fisker, certify that: 
1.I have reviewed this Quarterly Report on Form 10-Q of Fisker Inc. (the “registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 22, 2023/s/ Henrik Fisker
Henrik Fisker
Chairman, President and Chief Executive Officer
(Principal Executive Officer)

Document

Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Dr. Geeta Gupta-Fisker, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Fisker Inc. (the “registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 22, 2023/s/ Dr. Geeta Gupta-Fisker
Dr. Geeta Gupta-Fisker
Chief Financial Officer & Chief Operating Officer
(Principal Financial Officer)

Document

Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fisker Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Henrik Fisker, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 22, 2023/s/ Henrik Fisker
Henrik Fisker
Chairman, President & Chief Executive Officer
(Principal Executive Officer)

Document

Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fisker Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dr. Geeta Gupta-Fisker, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 22, 2023/s/ Dr. Geeta Gupta-Fisker
Dr. Geeta Gupta-Fisker
Chief Financial Officer & Chief Operating Officer
(Principal Financial Officer)