Fisker lost track of millions of dollars in customer payments for months

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Fisker temporarily mislaid way of millions of dollars successful customer payments arsenic it scaled up deliveries, starring to an soul audit that started successful December and took months to complete, TechCrunch has learned.

The EV startup was yet capable to way down a mostly of those payments aliases petition caller ones from customers whose costs methods had expired. But nan disarray, which was described to TechCrunch by 3 group acquainted pinch nan soul costs crisis, took labor and resources distant from Fisker’s income squad astatine a clip erstwhile nan institution was attempting to prevention itself by restructuring its business model.

Fisker struggled to support tabs connected these transactions, which included down payments and successful immoderate cases, nan afloat value of nan vehicles, because of lax soul procedures for keeping way of them, according to nan people. In a fewer cases, it delivered vehicles without collecting immoderate shape of costs astatine all, they said.

“Checks were not cashed successful a timely mode aliases conscionable mislaid altogether,” 1 of nan group told TechCrunch. “We were often scrambling to find checks, in installments paper receipts and immoderate wired costs a fewer months aft a conveyance was sold.”

Alongside nan soul audit, extracurricular auditor PwC was asking Fisker for much archiving astir its conveyance income arsenic portion of nan process of putting together nan company’s yearly financial report, according to 2 of nan people. Fisker was often incapable to supply satisfactory documentation, starring to much requests from PwC.

“Paperwork being collected wasn’t ever being collected successful full, aliases sent to nan aforesaid places,” different 1 of nan group said.

These sources requested anonymity because they were not authorized to talk to nan property astir soul matters.

This soul disorder had put nan institution successful a position wherever it couldn’t accurately opportunity really overmuch gross it had generated, according to nan people, who noted it is 1 of nan reasons Fisker has yet to record its yearly financial study for 2023.

Tracking down nan payments whitethorn upwind up offering small solace to nan startup, which is connected nan brink of bankruptcy. Fisker has paused production of its only vehicle, nan Ocean SUV, aft moving into problem meeting soul income goals and struggling to support customers dealing pinch a number of value problems. It has alerted investors that it whitethorn not beryllium capable to proceed operations without a caller infusion of cash.

This week, nan New York Stock Exchange suspended nan trading of Fisker shares and delisted nan company, expanding nan likelihood that it won’t beryllium capable to raise money to survive. The institution gutted prices — by arsenic overmuch arsenic 39% — connected its remaining inventory Wednesday morning.

Representatives for Fisker and PwC did not respond to requests for comment.

Red flags raised

Fisker has warned investors since past twelvemonth astir problems pinch its soul accounting practices. In November, nan institution reported that it had discovered aggregate “material weaknesses” successful its soul financial reporting.

The institution initially said it lacked “a capable number of professionals pinch an due level of accounting knowledge, training and acquisition to appropriately analyze, grounds and disclose accounting matters timely and accurately.”

That connection followed nan resignation of 2 main accounting officers wrong a month. “Specifically, location are insufficient controls to guarantee that nan accounting section is consistently provided pinch complete and capable support, archiving and information, and that matters are resolved successful a timely and effective manner,” nan institution wrote astatine nan time.

In that aforesaid filing, Fisker revealed a 2nd worldly weakness involving nan “risks of worldly misstatement complete nan accounting for inventory and related income connection accounts.”

On February 29, Fisker admitted successful a property merchandise that it identified an further worldly weakness “in gross and nan related equilibrium expanse accounts.”

This ineligible motto was a measurement for Fisker to admit what sources told TechCrunch: that it simply did not person nan group aliases processes successful spot to decently combine its books.

Fisker’s mediocre soul procedures person created problems beyond keeping way of payments.

The institution has besides struggled to support up pinch making nan required payments to various authorities DMVs erstwhile mounting up caller customers, according to nan people.

This has resulted successful astatine slightest dozens of customers spending months pinch impermanent licence plates. Some owners person had to fuss nan institution for multiple sets of impermanent plates, arsenic they support expiring. The aforesaid has been existent for immoderate owners who person been stuck waiting for their title and registration.

Fisker hired contractors successful February to thief resoluteness nan title and registration problems, but nan backlog was immense, according to nan people. One of nan group said that nan squad was moving connected amending paperwork connected orders stretching arsenic acold backmost arsenic August 2023.

“There was nary infrastructure successful spot anterior to spinning up nan wheels of nan income machine,” 1 of nan group said.