Warrants

6 Months Ended

Jun. 30, 2021

8. Warrants

Public and Private Warrants

Upon the Closing, there were 18,400,000 public and 9,360,000 private warrants outstanding to purchase shares of the Company’s common stock that were issued by Spartan prior to the Business Combination. Each whole warrant entitles the registered holder to purchase one whole share of the Company’s Class A Common Stock at a price of $11.50 per share, subject to adjustment as discussed below, 30 days after the Closing, provided that the Company has an effective registration statement under the Securities Act covering the shares of Class A Common Stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A Common Stock. The warrants will expire five years after the completion of the Business Combination, or earlier upon redemption or liquidation. The Private Placement Warrants are identical to the Warrants, except that the Private Placement Warrants and the Class A common stock issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of an Initial Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be

non-redeemable

so long as they are held by the Sponsor or any of its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Warrants.

On March 19, 2021, the Company announced that it would redeem all of its outstanding warrants (the “Public Warrants”) to purchase shares of the Company’s Class A common stock, par value $0.00001 per share (the “Common Stock”), that were issued under the Warrant Agreement, dated August 9, 2018 (the “Warrant Agreement”), by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agent”), as part of the units sold in the Company’s initial public offering (the “IPO”), for a redemption price of $0.01 per Public Warrant (the “Redemption Price”), that remained outstanding at 5:00 p.m. New York City time on April 22, 2021 (the “Redemption Date”). The Private Placement Warrants were not subject to this redemption. In addition, in accordance with the Warrant Agreement, the Company’s board of directors elected to require that, upon delivery of the notice of redemption, all Public Warrants were to be exercised only on a “cashless basis.” Accordingly, holders could not exercise Public Warrants and receive Common Stock in exchange for payment in cash of the $11.50 per warrant exercise price. Instead, a holder exercising a Public Warrant was deemed to pay the $11.50 per warrant exercise price by the surrender of 0.5046 of a share of Common Stock that such holder would have been entitled to receive upon a cash exercise of a Public Warrant. Accordingly, by virtue of the cashless exercise of the Public Warrants, exercising warrant holders received 0.4954 of a share of Common Stock for each Public Warrant surrendered for exercise. Any Public Warrants (including Public Warrants that were not included in outstanding units) that remained unexercised at 5:00 p.m. New York City time on the Redemption Date were delisted, void and no longer exercisable. The Company completed the redemption prior to filing this report. For the unexercised 225,906 Public Warrants outstanding at the Redemption Date, the Company paid $2,259 to redeem the unexercised warrants. There are no Public Warrants outstanding as of June 30, 2021.

During March 2021, the 9,360,000 warrants to purchase Common Stock that were originally issued under the Warrant Agreement in a private placement simultaneously with the IPO were exercised by the Company’s former sponsor on a cashless basis for 4,907,329 shares of Common Stock (4,452,671 shares of Common Stock surrendered) and are no longer outstanding.

Since January 1, 2021, the Company has received cash proceeds of $89 million upon the exercise of 7,733,400 Public Warrants immediately prior to the announcement to redeem the Public Warrants.

Public and private warrant exercise activity and underlying Common Stock issued or surrendered for the

six-months

ended June 30, 2021, is:


	Public warrants			Private warrants			Total
December 31, 2020		18,391,587			9,360,000			27,751,587
Shares issued for cash exercises		(7,733,400	)					(7,733,400	)
Shares issued for cashless exercises		(3,490,935	)		(4,907,329	)		(8,398,264	)
Shares surrendered upon cashless exercise		(3,556,026	)		(4,452,671	)		(8,008,697	)

March 31, 2021		3,611,226			—			3,611,226

Shares issued for cashless exercises		(1,676,856	)					(1,676,856	)
Shares surrendered upon cashless exercises		(1,708,464	)					(1,708,464	)
Shares redeemed by Company for cash		(225,906	)					(225,906	)

June 30, 2021		—			—			—

Cashless exercises of public and private warrants increased additional

paid-in

capital by $24 million and $277 million for the three-months and

six-months

ended June 30, 2021, respectively.

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% 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.

The cost upon achievement of each milestone is

capitalized

when it is probable that a milestone is 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. On June 12, 2021, Fisker Group Inc., a Delaware corporation, a wholly-owned subsidiary of Fisker Inc., entered into a detailed manufacturing agreement with Magna Steyr Fahrzeugtechnik AG & Co KG, a limited liability partnership established and existing under the laws of Austria, an affiliate of Magna, and achieved the second milestone resulting in $58 million

non-cash

increases of intangible assets and additional

paid-in-capital

in the condensed consolidated balance sheet. As of June 30, 2021, Magna satisfied the first and second milestones and the Company capitalized costs of $116 million as an intangible asset representing the future economic benefit to Fisker, Inc. Magna has 12,969,986 vested and exercisable warrants to acquire underlying Class A common stock of Fisker as of June 30, 2021. The third milestone is start of

pre-serial

production, which is not probable of being met as of June 30, 2021.