Fisker Inc. is providing an update on recent business activities.
Dealer Partner Model Update
On January 4, Fisker announced a change in its vehicle distribution strategy toward an innovative Dealer Partnership model in North America and hybrid model in Europe that will continue to include direct sales to consumers and dealer arrangements. Since this announcement, Fisker has seen substantial interest from potential partner dealers across the United States, Canada, and Europe. The company is currently engaged with over 100 dealers. Enthusiasm has been driven by the fact that Fisker is the only American brand available to dealers that manufactures exclusively electric vehicles that have class leading features (for example, the Fisker Ocean has the longest range in its segment). Fisker is scheduled to host dealers at its headquarters in Manhattan Beach during the week of January 29. In addition, Chairman and CEO Henrik Fisker and several Fisker executives are scheduled to attend the National Automobile Dealers Association (NADA) show in early February to meet with prospective dealers and promote the company’s new dealership model. Fisker expects the first Oceans to be available in dealer showrooms in February.
Many of Fisker’s potential dealer partners already support multiple brands of vehicles, have existing EV infrastructure and the ability to service vehicles. The company anticipates that dealers will be able to purchase vehicles for their inventory shortly after finalizing the partner agreements. Fisker believes this strategy is consistent with its asset-light business model and will allow the company to build a strong distribution network capable of servicing its customers in a more cost-efficient way. Initial dealer agreements will likely cover California, Illinois, New York, New Jersey, Massachusetts, Florida, Maryland, and Canada.
Anticipated Positive Impact to Cash Flow
Fisker expects that the Dealer Partnership model will enhance its ability to turn new vehicles into cash by reducing the time vehicles are retained on its balance sheet. Similar to the traditional automotive OEM/dealer model, Fisker will recognize revenue when a vehicle is sold to a dealer. Fisker anticipates that it will sell most of the vehicles it currently has in inventory before the end of this year’s first quarter and expects to provide a delivery update in February.
During the first half of 2024, the company expects to generate cash from the sale of existing 2023 production vehicle as well as a consumption of raw materials, including batteries, in producing cars in first half of 2024 that are currently on its balance sheet. The carrying value of completed vehicles in Fisker’s inventory at the end of 2023 was approximately $290 million. Since Fisker has been selling vehicles through its direct to customer model and will pivot to a dealership model during Q1. We expect to sell the balance of our 2023 vehicle inventory before end of the quarter, releasing almost $290 million on the balance sheet that can be used for working capital. In addition, Fisker has approximately $260 million of parts, including batteries, which will support the production of Ocean vehicles in 2024. As a result, Fisker expects to achieve a higher contribution to cash flow from Oceans produced and sold in early 2024.
Amendment to 2025 Convertible Notes
As previously announced, on January 21, Fisker entered into a second amendment and waiver agreement with the holder of its 2025 senior convertible notes. Pursuant to this waiver, among other items, the company no longer is required to maintain a minimum cash balance. In addition, the company has obtained a release from the investor of certain intellectual property belonging to Fisker upon the company entering into certain commercial agreements with an automotive original equipment manufacturer (OEM). Fisker believes this waiver provides increased flexibility to pursue strategic collaborations. Reflecting a series of conversions by the senior convertible notes holder, the company’s overall debt level has been reduced. As of January 19, 2024, the principal balance outstanding on the 2025 notes has been reduced by approximately $185.5 million to $324.5 million.
NHTSA Preliminary Evaluation
Fisker issued the following statement on the National Highway Traffic Safety Administration (NHTSA) Office of Defects Investigation’s (ODI) Preliminary Evaluation of reported braking issues with the 2023 Fisker Ocean:
The Fisker Ocean brake system uses both friction braking and regenerative braking. In December 2023, Fisker responded to customer feedback and issued an Over-the-Air update (Version 1.10) to the regenerative system that improved the customer experience when traveling over bumps and uneven surfaces, resolving the issue. The Fisker Ocean brake system meets or exceeds all US and international performance requirements.
Key Executive Leadership Updates
As previously announced, Fisker has strengthened its leadership team with the addition of seasoned and experienced executives across departments including finance, accounting, marketing, and sales.
These leaders include Angel Salinas as Chief Accounting Officer; Eric Goldstein as Head of Investor Relations; Beverly Lively as VP, Internal Controls & Audit; and Dan Quirk as EVP, of Finance and Accounting. Wolfgang Hoffman has also joined as Country Manager for Canada as well as Amira Aly as VP, Marketing, Sales & Financial Service US.
Fisker also held the largest meetup in company history, with approximately 2,500 owners and prospective owners gathering in 24 US locations and at six locations in Europe.
EchoMark Customer Successfully Identifies Source of Sensitive Email Leak For The First Time
Posted in Commentary with tags EchoMark on January 23, 2024 by itnerdEchoMark, the company pioneering an unprecedented approach to information protection, announced a landmark achievement for its innovative solution to protect the confidentiality of corporate email and other content: An early EchoMark customer successfully identified the source of an ongoing online email leak.
EchoMark launched in late 2023, and this is the first time it was used in a live information breach situation. The company’s technology worked with flying colors, identifying the source of the leak in minutes.
EchoMark’s advanced, invisible, personalized forensic watermarking was seamlessly added to the company’s corporate emails after the organization saw evidence of a potential unauthorized exposure of confidential information. When one email was later disclosed online, the hidden and proprietary forensics markings positively identified the source of the leak.
EchoMark can be easily deployed with customizable policies across both Microsoft Exchange and Google Gmail, and does not require any client software. For organizations that desire more selective end-user control, EchoMark also announced the availability of optional Outlook and Gmail Add-Ons.
Insider risk management, including information leaks and intellectual property theft, is a big and growing problem. Responsible data sharing and trustful collaboration have emerged as a top concern, even among the world’s most sophisticated organizations. EchoMark’s solutions are designed to protect an organization’s intellectual property and support trustful collaboration. EchoMark represents a major advance in digital asset privacy and protection that helps organizations foster the seamless flow of information among legitimate participants and prevent and mitigate leaks so that everyone involved can do their best work.
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