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fiskerresponseletter0623

  Fisker Inc.  1888 Rosecrans Avenue, Manha an Beach, CA 90266  www.fiskerinc.com   June 23, 2023    VIA EDGAR    Ms. SiSi Cheng  Mr. Kevin Stertzel   Office of Manufacturing  Division of Corporation Finance   U.S. Securities and Exchange Commission  100 F. Street, N.E.  Washington, D.C. 20549-3561       Re:  Fisker Inc.   Form 10-K for Fiscal Year Ended December 31, 2022   Filed March 1, 2023   File No. 001-38625    Dear Ms. Cheng and Mr. Stertzel:    The following is in response to the comment set forth in your letter dated June 2, 2023. For ease of  reference, your comment is copied below with our response immediately following.    Form 10-K for the Fiscal Year Ended December 31, 2022    Financial Statements  Note 11- Convertible Senior Notes, page 88    1. With regard to the Capped Call Transactions, we note your disclosure which states "if  exercised, (the capped call options) 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". Your disclosure also states you have concluded  the options should be classified as equity. We further note from your 2026 Notes Indenture  agreement filed as Exhibit 4.1, various scenarios whereby the exercise provisions are at  the option of the holder. Please provide us with your comprehensive analysis which  supports your equity classification conclusion. Refer to ASC 815-40-25 for guidance. In  addition, please file your Capped Call Transaction agreement as an exhibit, as it appears  to be a material agreement.  Response:  The Capped Call Option is classified in Stockholders’ Equity  The Capped Call Option is classified in Stockholders’ Equity pursuant to ASC 815-40-25 which  provides that contracts that require physical settlement or net-share settlement, or contracts that give the  Company a choice of net-cash settlement, be classified as equity provided that the criteria of  paragraphs ASC 815-40-25-7 through 25-30 and 815-40-55-2 through 55-6 are met. Under the 2026 Note  Indenture (refer to Section 14.02 – Conversion Procedure; Settlement Upon Conversion), filed as Exhibit  10.19 to the Company’s 2022 Form-10K, the Company controls the form of consideration delivered to a  Note holder upon conversion of any Note or Capped Call Option and determines, in its sole discretion,  whether settlement is in the form of cash, shares of Class A Common Stock or a combination thereof.    Under the Capped Call Transaction agreement, the Dealer delivers to the counterparty (i.e., Fisker)  consideration in the same form as the consideration elected by the counterparty to settle its 2026 Notes.

  Fisker Inc.  1888 Rosecrans Avenue, Manha an Beach, CA 90266  www.fiskerinc.com   The Company is the holder of the Capped Call Option and, as such, is the holder of a right to receive  stock instead of an obligation to issue stock.  In the context of the analysis of the Capped Call Option held  by the Company, the condition stated in ASC 815-40-25-10b does not apply because the Company would  receive Class A Common Stock if the Capped Call Option is exercised.   The Capped Call Transaction  agreement does not contain provisions outside of the Company’s control that could require settlement in  cash or other assets and there are no required cash payments if the Company fails to file timely with the  SEC (ASC 815-40-25-10d) or cash-settled top-off or make-whole provisions (ASC 815-40-25-10e).  The triggering events for exercise of the Capped Call Option mirror the triggering events for  conversion of the 2026 Notes.  Referring to the 2026 Note Indenture, we identified three scenarios that  could be viewed as outside of the Company’s control:   Section 14.02:  “Subject to this Section 14.02, Section 14.03(b) and Section 14.07(a), upon  conversion of any Note, the Company shall pay or deliver, as the case may be, to the  converting Holder, in respect of each $1,000 principal amount of Notes being converted,  cash (“Cash Settlement”), shares of Class A Common Stock, together with cash, if  applicable, in lieu of delivering any fractional share of Class A Common Stock in  accordance with subsection (j) of this Section 14.02 (“Physical Settlement”) or a  combination of cash and shares of Class A Common Stock, together with cash, if  applicable, in lieu of delivering any fractional share of Class A Common Stock in  accordance with subsection (j) of this Section 14.02 (“Combination Settlement”), at its  election, as set forth in this Section 14.02.”      Section 14.03(b): “Upon surrender of Notes for conversion in connection with a Make- Whole Fundamental Change described in clause (b) of the definition of Fundamental  Change, the Reference Property….is composed entirely of cash, for any conversion of  Notes following the Effective Date of such Make-Whole Fundamental Change, the  Conversion Obligation shall be calculated…and shall be deemed to be an amount of cash  per $1,000 principal amount of converted Notes equal to the Conversion Rate…”   Section  14.07(a) defines “Reference Property” as the composition of consideration exchanged in a  “Share Exchange Event” which could be in the form of shares of stock, other securities or  other property or assets.      Section 14.07(a): The section refers to the effects of recapitalizations, reclassifications and  changes of Class A Common Stock.  Our evaluation of each scenario is as follows:   Section 14.02:  The Company controls the form of consideration exchanged or delivered to  2026 Note holders and received by the Company upon exercise and settlement of the  Capped Call Option.  Pursuant to section 14.02(c), the Company has the ability to decide  the Settlement Method up to the Conversion Date to elect the form of consideration to be  paid or delivered to the holder.    We note section 14.02 requires the Company to elect the  same Settlement Method for conversions that occur on the same date within the Free  Convertibility Period.   Section 14.03(b): We note clause (b) of the definition of Fundamental Change includes “(B)  any share exchange, consolidation or merger of the Company pursuant to which the Class  A Common Stock will be converted into cash, securities or other property or assets”.   We  refer to ASC 815-40-25-8 which states: “Generally, if an event that is not within the entity's  control could require net cash settlement, then the contract shall be classified as an asset  or a liability. However, if the net cash settlement requirement can only be triggered in  circumstances in which the holders of the shares underlying the contract also would  receive cash, equity classification is not precluded.” [emphasis added] This section  requires consideration exchanged to be in the same form for all underlying Class A  shareholders.  Thus, we concluded this provision does not preclude equity classification.

  Fisker Inc.  1888 Rosecrans Avenue, Manha an Beach, CA 90266  www.fiskerinc.com    Section 14.07(a):  The external events contemplated in this section could occur outside of  the Company’s control and then trigger the conversion features of the 2026 Notes and, in  turn exercise of the Company’s Capped Call Option.    As part of its analysis of ASC 815- 40-55-2 through 55-6, we evaluated whether an event that causes a change in control of an  entity, as described in the 2026 Notes Indenture and cross-referenced in the Capped Call  Transaction agreement, is not within the Company’s control and, if such an event occurs,  whether a contractual provision exists that requires the Company to net cash settle the  transaction.   Upon a change-in-control event occurring, the forms of consideration  received by both counterparty and stockholder would be the same (ASC 815-40-25-8).    Similar to our evaluation of section 14.03(b), the form of consideration exchanged is the  same for all Class A Common Stock shareholders.       Overall, the Company controls the form of consideration to settle the Capped Call Option, except  upon early termination of the Capped Call Transaction agreement or the occurrence of certain other  extraordinary events which result in share settlement.   If a transaction subject to sections 14.03(b) or  Section 14.07(a) occurs, the Share Termination Alternative, defined in section 9(l) of the Capped Call  Transaction agreement, provides for settlement of the Capped Call Option in the same form of  consideration that holders of Class A Common Stock would be entitled and, therefore, is similarly subject  to the same guidance noted above in ASC 815-40-25-8.  In addition, the Capped Call Transaction  agreement contains an explicit limit on the number of shares of Class A common stock to be delivered to  the Company in a share settlement.  Therefore, under ASC 815-40-25-7 through 25-30 and 815-40-55-2 through 55-6, the Capped Call  Option meets the criteria for classification in equity at issuance.  Conclusion  The Company has concluded the Capped Call Option is classified in the equity section of the  Company’s balance sheet. At the end of each reporting period after the purchase of the Capped Call  Option, the Company evaluates the equity classification guidance at ASC 815-40-25-7 through 25-30 and  815-40-55-2 through 55-6.  There have been no changes to the conclusions reached.  Capped Call Transaction agreement  Consistent with market practice to inform investors of the structure, we filed the form of confirmation  for the Capped Call as Exhibit 99.1 to our Form 8-K dated August 12, 2021.  In addition, we evaluated the  form and the executed confirmations and concluded they were not material agreements.  Nonetheless,  pursuant to the Staff’s request, we will include executed confirmations as an exhibit to the Company’s  next periodic report.     * * *    We appreciate your assistance in our compliance with applicable disclosure requirements and  enhancing the overall disclosures in our filings.  Should you have any questions or comments regarding  our response, please feel free to contact me at (310) 415-9807.      Sincerely,     /s/ John Finnucan    John Finnucan  Chief Accounting Officer