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Index to Financial Statements

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

 

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material under §240.14a-12

Spartan Energy Acquisition Corp.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

  (2)  

Aggregate number of securities to which transaction applies:

 

     

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

     

  (4)  

Proposed maximum aggregate value of transaction:

 

     

  (5)  

Total fee paid:

 

     

 

Fee paid previously with preliminary materials.

  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

     

  (2)  

Form, Schedule or Registration Statement No.:

 

     

  (3)  

Filing Party:

 

     

  (4)  

Date Filed:

 

     

 

 

 


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PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS OF SPARTAN ENERGY ACQUISITION CORP.

Dear Stockholders of Spartan Energy Acquisition Corp.:

You are cordially invited to attend the special meeting (the “special meeting”) of stockholders of Spartan Energy Acquisition Corp. (“Spartan,” “we,” “our,” “us” or the “Company”), which will be held at 11:00 a.m., Eastern time, on October 28, 2020, via live webcast at the following address: https://www.cstproxy.com/spartanenergy/sm2020. At the special meeting, Spartan stockholders will be asked to consider and vote upon the following proposals:

 

   

The Business Combination Proposal—To consider and vote upon a proposal to (a) approve and adopt the Business Combination Agreement and Plan of Reorganization, dated as of July 10, 2020 (the “Business Combination Agreement”), among Spartan, Spartan Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Spartan (“Merger Sub”), and Fisker Inc., a Delaware corporation (“Fisker”), pursuant to which Merger Sub will merge with and into Fisker, with Fisker surviving the merger as a wholly owned subsidiary of Spartan and (b) approve such merger and the other transactions contemplated by the Business Combination Agreement (the “business combination” and such proposal, the “Business Combination Proposal”) (Proposal No. 1). A copy of the Business Combination Agreement is attached to this proxy statement as Annex A.

 

   

The Charter Proposals—To consider and vote upon each of the following proposals to amend Spartan’s amended and restated certificate of incorporation (the “Charter”) (collectively, the “Charter Proposals”):

 

   

The Authorized Share Charter Proposal—To (a) increase the number of authorized shares of Spartan’s Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”), from 200,000,000 shares to 750,000,000 shares, (b) increase the number of authorized shares of Spartan’s Class B Common Stock, par value $0.0001 per share (the “Class B Common Stock”), from 20,000,000 shares to 150,000,000 shares, and (c) increase the number of authorized shares of Spartan’s Preferred Stock, par value $0.0001 per share, from 1,000,000 shares to 15,000,000 shares (the “Authorized Share Charter Proposal”) (Proposal No. 2);

 

   

The Dual Class Charter Proposal—To implement a dual class stock structure comprised of Class A Common Stock, which will carry one vote per share, and Class B Common Stock, which will carry 10 votes per share (the “Dual Class Charter Proposal”) (Proposal No. 3); and

 

   

The Additional Charter Proposal—To eliminate provisions in the Charter relating to Spartan’s initial business combination that will no longer be applicable to Spartan following the closing of the business combination (the “Closing”), change the post-combination company’s name to “Fisker Inc.” and make certain other changes that the board of directors (the “Spartan Board”) of Spartan deems appropriate for a public operating company (the “Additional Charter Proposal”) (Proposal No. 4).

The full text of our proposed second amended and restated certificate of incorporation (the “Proposed Second A&R Charter”) reflecting each of the proposed amendments pursuant to the Charter Proposals is attached to this proxy statement as Annex B.

 

   

The NYSE Proposal—To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of the New York Stock Exchange (the “NYSE”), (a) the issuance (or reservation for issuance in respect of certain options issued in exchange for outstanding pre-merger Fisker options) of 46,318,959 shares of Class A Common Stock (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta) and 129,122,242 shares of Class B Common Stock in the business combination and (b) the issuance and sale of 50,000,000 shares of Class A Common Stock in the private offering of securities to certain investors in connection with the business combination (the “NYSE Proposal”) (Proposal No. 5).


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The 2020 Plan Proposal—To consider and vote upon a proposal to approve and adopt the Fisker Inc. 2020 Equity Incentive Plan (the “2020 Plan”) and material terms thereunder (the “2020 Plan Proposal”) (Proposal No. 6). A copy of the 2020 Plan is attached to this proxy statement as Annex C.

 

   

The ESPP Proposal—To consider and vote upon a proposal to approve and adopt the Fisker Inc. 2020 Employee Stock Purchase Plan (the “ESPP”) and material terms thereunder (the “ESPP Proposal”) (Proposal No. 7). A copy of the ESPP is attached to this proxy statement as Annex D.

 

   

The Director Election Proposal—To consider and vote upon a proposal to elect two directors to serve until the 2021 annual meeting of stockholders, three directors to serve until the 2022 annual meeting of stockholders and two directors to serve until the 2023 annual meeting of stockholders, and until their respective successors are duly elected and qualified, subject to such directors’ earlier death, resignation, retirement, disqualification or removal (the “Director Election Proposal”) (Proposal No. 8).

 

   

The Adjournment Proposal—To consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposals, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal or the Director Election Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Charter Proposals, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal and the Director Election Proposal, the “Proposals”) (Proposal No. 9).

The special meeting will be completely virtual. There will be no physical meeting location and the special meeting will only be conducted via live webcast at the following address: https://www.cstproxy.com/spartanenergy/sm2020.

The Spartan Board recommends that Spartan stockholders vote “FOR” each Proposal (or in the case of the Director Election Proposal, “FOR ALL NOMINEES”) being submitted to a vote of the stockholders at the special meeting. When you consider the recommendation of the Spartan Board in favor of each of the Proposals, you should keep in mind that certain of Spartan’s directors and officers have interests in the business combination that may conflict with your interests as a stockholder. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination.”

Each of the Proposals is more fully described in this proxy statement, which each Spartan stockholder is encouraged to review carefully.

Spartan’s Class A Common Stock and public warrants, which are exercisable for shares of Class A Common Stock under certain circumstances, are currently listed on the NYSE under the symbols “SPAQ” and “SPAQ.WS,” respectively. In addition, certain of our shares of Class A Common Stock and warrants currently trade as units consisting of one share of Class A Common Stock and one-third of one warrant, and are listed on the NYSE under the symbol “SPAQ.U.” The units will automatically separate into the component securities upon consummation of the business combination and, as a result, will no longer trade as a separate security. Upon the Closing, we intend to change our name from “Spartan Energy Acquisition Corp.” to “Fisker Inc.,” and we intend to apply to continue the listing of our Class A Common Stock and warrants on the NYSE under the symbols “FSR” and “FSR WS,” respectively.

Pursuant to our Charter, we are providing the holders of shares of Class A Common Stock originally sold as part of the units issued in our initial public offering (the “IPO” and such holders, the “public stockholders”) with the opportunity to redeem, upon the Closing, shares of Class A Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds (including interest not previously released to Spartan to pay its franchise and income taxes) from the IPO and a concurrent private placement of warrants to Spartan Energy Acquisition Sponsor LLC, a Delaware limited liability company (our “Sponsor”). For illustrative purposes, based on the fair value of cash and marketable securities held in the Trust Account as of June 30, 2020 of approximately $569.6 million, the estimated per share redemption price would have been approximately


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$10.32. Public stockholders may elect to redeem their shares whether or not they are holders as of the record date and whether or not they vote for the Business Combination Proposal. Notwithstanding the foregoing redemption rights, a public stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the outstanding shares of Class A Common Stock sold in the IPO. Holders of Spartan’s outstanding warrants sold in the IPO, which are exercisable for shares of Class A Common Stock under certain circumstances, do not have redemption rights in connection with the business combination. Our Sponsor, officers and directors have agreed to waive their redemption rights in connection with the consummation of the business combination with respect to any shares of Class A Common Stock they may hold, and our shares of Class B Common Stock will be excluded from the pro rata calculation used to determine the per share redemption price. Currently, our Sponsor, officers and directors own approximately 20% of our outstanding Class A Common Stock and Class B Common Stock, including all of the shares of Class B Common Stock. Our Sponsor, officers and directors have agreed to vote any shares of Class A Common Stock and Class B Common Stock owned by them in favor of the business combination.

Spartan is providing this proxy statement and accompanying proxy card to its stockholders in connection with the solicitation of proxies to be voted at the special meeting and any adjournments or postponements of the special meeting. Your vote is very important. Whether or not you plan to attend the special meeting virtually, please submit your proxy card without delay.

We encourage you to read this proxy statement carefully. In particular, you should review the matters discussed under the section entitled “Risk Factors” beginning on page 32 of this proxy statement.

Approval of each of the Business Combination Proposal, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal and the Adjournment Proposal requires the affirmative vote (online or by proxy) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock entitled to vote and actually cast thereon at the special meeting, voting as a single class. Approval of the Charter Proposals requires the affirmative vote (online or by proxy) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock entitled to vote thereon at the special meeting, voting as a single class. Approval of the Director Election Proposal requires the affirmative vote of a plurality of the votes cast by holders of our Class A Common Stock and Class B Common Stock virtually present or represented by proxy at the special meeting and entitled to vote thereon, voting as a single class.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of Proposal Nos. 1, 2, 3, 4, 5, 6, 7 and 9 and “FOR ALL NOMINEES” for Proposal No. 8. If you fail to return your proxy card or fail to submit your proxy by telephone or over the Internet, or fail to instruct your bank, broker or other nominee how to vote, and do not virtually attend the special meeting, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have no effect on the Business Combination Proposal, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal, the Director Election Proposal or the Adjournment Proposal, but will have the same effect as a vote “AGAINST” the Charter Proposals. If you are a stockholder of record and you virtually attend the special meeting and wish to vote, you may withdraw your proxy and vote online.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE SPARTAN REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO SPARTAN’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE VIRTUAL SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN


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STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

Thank you for your consideration of these matters.

Sincerely,

/s/ Geoffrey Strong

Geoffrey Strong

Chief Executive Officer and Director

Spartan Energy Acquisition Corp.

Whether or not you plan to attend the special meeting of Spartan stockholders online, please submit your proxy by completing, signing, dating and mailing the enclosed proxy card in the pre-addressed postage paid envelope or by using the telephone or Internet procedures provided to you by your broker or bank. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting of Spartan stockholders and vote online, you must obtain a proxy from your broker or bank.

Neither the Securities and Exchange Commission nor any state securities commission has passed upon the adequacy or accuracy of this proxy statement. Any representation to the contrary is a criminal offense.

This proxy statement is dated October 5, 2020 and is first being mailed to Spartan stockholders on or about October 5, 2020.


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SPARTAN ENERGY ACQUISITION CORP.

9 West 57th Street, 43rd Floor

New York, New York 10019

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

OF SPARTAN ENERGY ACQUISITION CORP.

To Be Held On October 28, 2020

To the Stockholders of Spartan Energy Acquisition Corp.:

NOTICE IS HEREBY GIVEN that the special meeting (the “special meeting”) of stockholders of Spartan Energy Acquisition Corp. (“Spartan,” “we,” “our,” “us” or the “Company”) will be held at 11:00 a.m., Eastern time, on October 28, 2020, via live webcast at the following address: https://www.cstproxy.com/spartanenergy/sm2020. At the special meeting, Spartan stockholders will be asked to consider and vote upon the following proposals:

 

   

The Business Combination Proposal—To consider and vote upon a proposal to (a) approve and adopt the Business Combination Agreement and Plan of Reorganization, dated as of July 10, 2020 (the “Business Combination Agreement”), among Spartan, Spartan Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Spartan (“Merger Sub”), and Fisker Inc., a Delaware corporation (“Fisker”), pursuant to which Merger Sub will merge with and into Fisker, with Fisker surviving the merger as a wholly owned subsidiary of Spartan and (b) approve such merger and the other transactions contemplated by the Business Combination Agreement (the “business combination” and such proposal, the “Business Combination Proposal”) (Proposal No. 1). A copy of the Business Combination Agreement is attached to the accompanying proxy statement as Annex A.

 

   

The Charter Proposals—To consider and vote upon each of the following proposals to amend Spartan’s amended and restated certificate of incorporation (the “Charter”) (collectively, the “Charter Proposals”):

 

   

The Authorized Share Charter Proposal—To (a) increase the number of authorized shares of Spartan’s Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”), from 200,000,000 shares to 750,000,000 shares, (b) increase the number of authorized shares of Spartan’s Class B Common Stock, par value $0.0001 per share (the “Class B Common Stock”), from 20,000,000 shares to 150,000,000 shares, and (c) increase the number of authorized shares of Spartan’s Preferred Stock, par value $0.0001 per share, from 1,000,000 shares to 15,000,000 shares (the “Authorized Share Charter Proposal”) (Proposal No. 2);

 

   

The Dual Class Charter Proposal—To implement a dual class stock structure comprised of Class A Common Stock, which will carry one vote per share, and Class B Common Stock, which will carry 10 votes per share (the “Dual Class Charter Proposal”) (Proposal No. 3); and

 

   

The Additional Charter Proposal—To eliminate provisions in the Charter relating to Spartan’s initial business combination that will no longer be applicable to Spartan following the closing of the business combination (the “Closing”), change the post-combination company’s name to “Fisker Inc.” and make certain other changes that the board of directors (the “Spartan Board”) of Spartan deems appropriate for a public operating company (the “Additional Charter Proposal”) (Proposal No. 4).

The full text of our proposed second amended and restated certificate of incorporation (the “Proposed Second A&R Charter”) reflecting each of the proposed amendments pursuant to the Charter Proposals is attached to the accompanying proxy statement as Annex B.

 

   

The NYSE Proposal—To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of the New York Stock Exchange, (a) the issuance (or reservation for issuance in respect of certain options issued in exchange for outstanding pre-merger Fisker options) of 46,318,959 shares of Class A Common Stock (including 918,637 shares of Class A Common Stock


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issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta) and 129,122,242 shares of Class B Common Stock in the business combination and (b) the issuance and sale of 50,000,000 shares of Class A Common Stock in the private offering of securities to certain investors in connection with the business combination (the “NYSE Proposal”) (Proposal No. 5).

 

   

The 2020 Plan Proposal—To consider and vote upon a proposal to approve and adopt the Fisker Inc. 2020 Equity Incentive Plan (the “2020 Plan”) and material terms thereunder (the “2020 Plan Proposal”) (Proposal No. 6). A copy of the 2020 Plan is attached to the accompanying proxy statement as Annex C.

 

   

The ESPP Proposal—To consider and vote upon a proposal to approve and adopt the Fisker Inc. 2020 Employee Stock Purchase Plan (the “ESPP”) and material terms thereunder (the “ESPP Proposal”) (Proposal No. 7). A copy of the ESPP is attached to this proxy statement as Annex D.

 

   

The Director Election Proposal—To consider and vote upon a proposal to elect two directors to serve until the 2021 annual meeting of stockholders, three directors to serve until the 2022 annual meeting of stockholders and two directors to serve until the 2023 annual meeting of stockholders, and until their respective successors are duly elected and qualified, subject to such directors’ earlier death, resignation, retirement, disqualification or removal (the “Director Election Proposal”) (Proposal No. 8).

 

   

The Adjournment Proposal—To consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposals, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal or the Director Election Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Charter Proposals, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal and the Director Election Proposal, the “Proposals”) (Proposal No. 9).

The special meeting will be completely virtual. There will be no physical meeting location and the special meeting will only be conducted via live webcast at the following address: https://www.cstproxy.com/spartanenergy/sm2020.

Only holders of record of Spartan’s Class A Common Stock and Class B Common Stock at the close of business on October 1, 2020 are entitled to notice of the virtual special meeting and to vote at the virtual special meeting and any adjournments or postponements thereof. A complete list of Spartan’s stockholders of record entitled to vote at the virtual special meeting will be available at the virtual special meeting and for ten days before the virtual special meeting at Spartan’s principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the virtual special meeting.

Pursuant to our Charter, we are providing the holders of shares of Class A Common Stock originally sold as part of the units issued in our initial public offering (the “IPO” and such holders, the “public stockholders”) with the opportunity to redeem, upon the Closing, shares of Class A Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account (the “Trust Account”) that holds the proceeds (including interest not previously released to Spartan to pay its franchise and income taxes) from the IPO and a concurrent private placement of warrants to Spartan Energy Acquisition Sponsor LLC, a Delaware limited liability company (our “Sponsor”). For illustrative purposes, based on the fair value of cash and marketable securities held in the Trust Account as of June 30, 2020 of approximately $569.6 million, the estimated per share redemption price would have been approximately $10.32. Public stockholders may elect to redeem their shares whether or not they are holders as of the record date and whether or not they vote for the Business Combination Proposal. Notwithstanding the foregoing redemption rights, a public stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the outstanding shares of Class A Common Stock sold in the IPO. Holders of Spartan’s outstanding warrants sold in the IPO, which are exercisable for shares of Class A Common


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Stock under certain circumstances, do not have redemption rights in connection with the business combination. Our Sponsor, officers and directors have agreed to waive their redemption rights in connection with the consummation of the business combination with respect to any shares of Class A Common Stock they may hold, and our shares of Class B Common Stock will be excluded from the pro rata calculation used to determine the per share redemption price. Currently, our Sponsor, officers and directors own approximately 20% of our outstanding Class A Common Stock and Class B Common Stock, including all of the shares of Class B Common Stock. Our Sponsor, officers and directors have agreed to vote any shares of Class A Common Stock and Class B Common Stock owned by them in favor of the business combination.

Subject to approval by Spartan stockholders of the Business Combination Proposal, the NYSE Proposal and the Charter Proposals, New Fisker will adopt a dual class stock structure comparable to the one that will be in effect at Fisker immediately prior to the Closing, comprised of Class A Common Stock, which will carry one vote per share, and Class B Common Stock, which will carry 10 votes per share. Henrik Fisker and Dr. Geeta Gupta, Fisker’s co-founders, members of New Fisker’s Board of Directors and Chief Executive Officer and Chief Financial Officer, respectively, will hold all of the issued and outstanding shares of New Fisker’s Class B Common Stock following the Closing. Accordingly, Mr. Fisker and Dr. Gupta will hold approximately 89.7% of the voting power of New Fisker’s capital stock on a fully-diluted basis and will be able to control matters submitted to its stockholders for approval, including the election of directors, amendments of its organizational documents and any merger, consolidation, sale of all or substantially all of New Fisker’s assets or other major corporate transactions. For information about New Fisker’s dual class structure, see the section titled “Description of Securities.”

We may not consummate the business combination unless the Business Combination Proposal, the Charter Proposals and the NYSE Proposal are approved at the special meeting. The Charter Proposals, the 2020 Plan Proposal, the ESPP Proposal and the Director Election Proposal are conditioned on the approval of the Business Combination Proposal and the NYSE Proposal. The Adjournment Proposal is not conditioned on the approval of any other Proposal set forth in the accompanying proxy statement.

Your attention is directed to the proxy statement accompanying this notice (including the annexes thereto) for a more complete description of the proposed business combination and related transactions and each of our Proposals. We encourage you to read the accompanying proxy statement carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Morrow Sodali LLC, at (800) 662-5200 (banks and brokers call collect at (203) 658-9400).

October 5, 2020

By Order of the Board of Directors

/s/ Geoffrey Strong

Geoffrey Strong

Chief Executive Officer and Director

 


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TABLE OF CONTENTS

 

CERTAIN DEFINED TERMS

     i  

SUMMARY TERM SHEET

     v  

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR SPARTAN STOCKHOLDERS

     1  

SUMMARY OF THE PROXY STATEMENT

     14  

SELECTED HISTORICAL FINANCIAL AND OPERATING DATA OF SPARTAN

     28  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA OF FISKER

     29  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     30  

RISK FACTORS

     32  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     77  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     79  

COMPARATIVE SHARE INFORMATION

     91  

SPECIAL MEETING OF SPARTAN STOCKHOLDERS

     93  

PROPOSAL NO. 1—THE BUSINESS COMBINATION PROPOSAL

     99  

PROPOSAL NO. 2—THE AUTHORIZED SHARE CHARTER PROPOSAL

     137  

PROPOSAL NO. 3—THE DUAL CLASS CHARTER PROPOSAL

     138  

PROPOSAL NO. 4—THE ADDITIONAL CHARTER PROPOSAL

     139  

PROPOSAL NO. 5—THE NYSE PROPOSAL

     140  

PROPOSAL NO. 6—THE 2020 PLAN PROPOSAL

     141  

PROPOSAL NO. 7—THE ESPP PROPOSAL

     151  

PROPOSAL NO. 8—THE DIRECTOR ELECTION PROPOSAL

     158  

PROPOSAL NO. 9—THE ADJOURNMENT PROPOSAL

     159  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF FISKER

     160  

INFORMATION ABOUT FISKER

     173  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SPARTAN

     198  

INFORMATION ABOUT SPARTAN

     201  

EXECUTIVE COMPENSATION

     212  

MANAGEMENT AFTER THE BUSINESS COMBINATION

     219  

DESCRIPTION OF SECURITIES

     227  

BENEFICIAL OWNERSHIP OF SECURITIES

     241  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     244  

INDEPENDENT REGISTERED ACCOUNTING FIRM

     247  

HOUSEHOLDING INFORMATION

     247  

TRANSFER AGENT AND REGISTRAR

     247  

SUBMISSION OF STOCKHOLDER PROPOSALS

     247  

FUTURE STOCKHOLDER PROPOSALS

     247  

WHERE YOU CAN FIND ADDITIONAL INFORMATION

     248  

INDEX TO FINANCIAL STATEMENTS

     F-1  

ANNEX A: BUSINESS COMBINATION AGREEMENT AND PLAN OF REORGANIZATION

     A-1  

ANNEX B: SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

     B-1  

ANNEX C: NEW FISKER 2020 EQUITY INCENTIVE PLAN

     C-1  

ANNEX D: NEW FISKER 2020 EMPLOYEE STOCK PURCHASE PLAN

     D-1  

 

 

i


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CERTAIN DEFINED TERMS

Unless the context otherwise requires, references in this proxy statement to:

 

   

“Apollo” are to Apollo Global Management, Inc. (NYSE: APO), a Delaware corporation, and its consolidated subsidiaries;

 

   

“business combination” are to the transactions contemplated by the Business Combination Agreement;

 

   

“Business Combination Agreement” are to that certain Business Combination Agreement and Plan of Reorganization, dated as of July 10, 2020, by and among Spartan, Merger Sub and Fisker;

 

   

“Charter” are to Spartan’s Amended and Restated Certificate of Incorporation;

 

   

“Class A Common Stock” are to (a) prior to giving effect to the business combination, Spartan’s Class A Common Stock, par value $0.0001 per share, and (b) after giving effect to the business combination, New Fisker’s Class A Common Stock, par value $0.00001 per share;

 

   

“Class B Common Stock” are to (a) prior to giving effect to the business combination, Spartan’s Class B Common Stock, par value $0.0001 per share, and (b) after giving effect to the business combination, New Fisker’s Class B Common Stock, par value $0.00001 per share;

 

   

“Closing” are to the closing of the business combination;

 

   

“Closing Cash” are to (i) the sum of the fair market value (expressed in United States dollars) of all cash and cash equivalents (including marketable securities, checks, bank deposits and short term investments) of Fisker and each subsidiary of Fisker, minus (ii) all amounts in respect of any outstanding checks written by Fisker or any subsidiary of Fisker, in each case, calculated in accordance with the Business Combination Agreement; provided that Closing Cash does not include Excluded Cash;

 

   

“Closing Debt” are to the outstanding principal amount of, accrued and unpaid interest on, and other payment obligations (including any prepayment premiums, breakage costs and other related fees or liabilities payable on the Closing Date as a result of the prepayment thereof or the consummation of the transactions contemplated by the Business Combination Agreement) arising under, any obligations of Fisker or any subsidiary of Fisker consisting of (i) indebtedness for borrowed money or indebtedness issued in substitution or exchange for borrowed money, or (ii) indebtedness evidenced by any note, bond, debenture or other debt security, in each case, calculated in accordance with the Business Combination Agreement. Notwithstanding the foregoing, “Closing Debt” does not include any (v) obligations under operating leases or capitalized leases, (w) undrawn letters of credit, (x) obligations under any interest rate, currency or other hedging agreements (other than breakage costs payable upon termination thereof on the Closing Date), (y) expenses incurred in connection with the Business Combination Agreement and the business combination or (z) outstanding principal and accrued but unpaid interest due on the Fisker Convertible Notes that will convert to Fisker Class A Common Stock pursuant to the Business Combination Agreement;

 

   

“Closing Date” are to the date on which the Closing occurs;

 

   

“Common Stock” are to the Class A Common Stock and the Class B Common Stock;

 

   

“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

 

   

“Exchange Ratio” are to the quotient obtained by dividing (i) the Fisker Merger Shares by (ii) the total number of shares of Fisker Common Stock outstanding immediately prior to the Effective Time, expressed on a fully-diluted and as-converted to Fisker Common Stock basis, and including, without limitation or duplication, the number of shares of Fisker Class A Common Stock issuable upon conversion of Fisker Preferred Stock, Fisker Founders Stock and Fisker Convertible Notes pursuant to the Business Combination Agreement, and the number of shares of Fisker Class A Common Stock

 

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subject to unexpired, issued and outstanding Fisker Options as of immediately prior to the Effective Time;

 

   

“Excluded Cash” are to the aggregate amount of (a) restricted cash and cash equivalents held or retained by Fisker and Fisker’s subsidiaries for the benefit, or pursuant to the requirement of, any other person, and (b) any cash and cash equivalents held or deposited as security deposits or escrow deposits;

 

   

“Fisker” are to Fisker Inc., a Delaware corporation;

 

   

“Fisker Certificate of Incorporation” are to the Amended and Restated Certificate of Incorporation of Fisker dated December 10, 2018, as such may have been amended, supplemented or modified from time to time.

 

   

“Fisker Class A Common Stock” are to Fisker’s Class A common stock, par value $0.00001 per share;

 

   

“Fisker Class B Common Stock” are to Fisker’s Class B common stock, par value $0.00001 per share;

 

   

“Fisker Common Stock” are to the Fisker Class A Common Stock and the Fisker Class B Common Stock;

 

   

“Fisker Convertible Equity Security” means the Convertible Equity Security issued pursuant to the Convertible Equity Security Purchase Agreement, dated July 7, 2020, by and between Fisker and the purchaser named therein.

 

   

“Fisker Convertible Notes” are to the convertible notes issued pursuant to the Convertible Note Purchase Agreement, dated July 29, 2019, by and among Fisker and the purchasers named therein;

 

   

“Fisker Founders Stock” are to shares of Fisker’s Founders preferred stock, par value $0.00001 per share;

 

   

“Fisker Merger Shares” are to the number of shares equal to (i) the quotient determined by dividing (a) the Fisker Valuation by (b) $10.00, minus (ii) the number of shares of Class A Common Stock ultimately issuable to the holder of the Fisker Convertible Equity Security, plus (iii) the number of Sponsor Shares (as defined below).

 

   

“Fisker Options” are to all options to purchase outstanding shares of Fisker Class A Common Stock, whether or not exercisable and whether or not vested, immediately prior to the Closing under the Fisker Inc. 2016 Stock Plan, as such may have been amended, supplemented or modified from time to time;

 

   

“Fisker Series A Preferred Stock” are to the shares of Fisker’s preferred stock, par value $0.00001 per share, designated as Series A Preferred Stock in the Fisker Certificate of Incorporation;

 

   

“Fisker Series B Preferred Stock” are to the shares of Fisker’s Preferred Stock, par value $0.00001 per share, designated as Series B Preferred Stock in the Fisker Certificate of Incorporation;

 

   

“Fisker Preferred Stock” are to the Fisker Series A Preferred Stock and the Fisker Series B Preferred Stock;

 

   

“Fisker Valuation” are to $1,750,000,000, plus the aggregate amount of Closing Cash and minus the aggregate amount of Closing Debt;

 

   

“Founder Shares” are to the outstanding shares of our Class B Common Stock;

 

   

“HF Holdco” are to HF Holdco, LLC, a Nevada limited liability company and an affiliate of Henrik Fisker and Dr. Geeta Gupta;

 

   

“Historical Rollover Stockholders” are to the holders of shares of Class A Common Stock that will be issued in exchange for all outstanding shares of Fisker Class A Common Stock in the business combination;

 

   

“Initial Business Combination” are to our initial merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;

 

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“initial stockholders” are to the holders of our Founder Shares, which includes our Sponsor, our independent directors and John J. MacWilliams, a non-independent member of the Spartan Board;

 

   

“Initial Public Offering” or “IPO” are to Spartan’s initial public offering of units, which closed on August 14, 2018;

 

   

“IRS” are to the Internal Revenue Service;

 

   

“management” or our “management team” are to our officers and directors;

 

   

“Merger Sub” are to Spartan Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Spartan;

 

   

“Merger Sub Common Stock” are to Merger Sub’s common stock, par value $0.0001 per share;

 

   

“New Fisker” are to (a) prior to giving effect to the business combination, Spartan, and (b) after giving effect to the business combination, Fisker Inc., the new name of Spartan after giving effect to the business combination;

 

   

“New PIPE Investors” are to investors in the PIPE Financing;

 

   

“NYSE” are to the New York Stock Exchange;

 

   

“PIPE Financing” are to the private offering of securities of New Fisker to certain investors in connection with the business combination;

 

   

“PIPE Funds” are to the proceeds from the PIPE Financing;

 

   

“PIPE Shares” are to the shares of Class A Common Stock that are issued in the PIPE Financing;

 

   

“Preferred Stock” are to (a) prior to giving effect to the business combination, Spartan’s Preferred Stock, par value $0.0001 per share, and (b) after giving effect to the business combination, New Fisker’s Preferred Stock, par value $0.00001 per share;

 

   

“private placement warrants” are to the warrants issued to our Sponsor in a private placement simultaneously with the closing of our IPO;

 

   

“public shares” are to shares of our Class A Common Stock sold as part of the units in the IPO (whether they were purchased in the IPO or thereafter in the open market);

 

   

“public stockholders” are to the holders of our public shares;

 

   

“public warrants” are to the warrants sold as part of the units in the IPO (whether they were purchased in the IPO or thereafter in the open market);

 

   

“SEC” are to the U.S. Securities and Exchange Commission;

 

   

“Securities Act” are to the Securities Act of 1933, as amended;

 

   

“special meeting” are to the special meeting of stockholders of Spartan that is the subject of this proxy statement and any adjournments or postponements thereof;

 

   

“Sponsor” are to Spartan Energy Acquisition Sponsor LLC, a Delaware limited liability company, which is an affiliate of a private investment fund managed by Apollo;

 

   

“Spartan,” “we,” “our,” “us” or the “Company” are to Spartan Energy Acquisition Corp., a Delaware corporation;

 

   

“Spartan Board” are to the board of directors of Spartan;

 

   

“Surviving Corporation” are to (a) prior to giving effect to the business combination, Fisker, and (b) after giving effect to the business combination, Fisker Group Inc., the new name of Fisker after giving effect to the business combination;

 

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“Trust Account” are to the trust account that holds the proceeds (including interest not previously released to Spartan to pay its franchise and income taxes) from the IPO and a concurrent private placement of private placement warrants to our Sponsor;

 

   

“units” are to our units sold in the IPO, each of which consists of one share of Class A Common Stock and one-third of one public warrant; and

 

   

“voting common stock” are to our Class A Common Stock and Class B Common Stock.

Unless otherwise specified, the voting and economic interests of Spartan stockholders set forth in this proxy statement (a) assume that (i) no public stockholders elect to have their public shares redeemed, (ii) 50,000,000 shares of Class A Common Stock are issued in the PIPE Financing, (iii) 46,318,959 shares of Class A Common Stock are issued to the Historical Rollover Stockholders in the business combination (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta), (iv) 129,122,242 shares of Class B Common Stock are issued to Henrik Fisker and Dr. Geeta Gupta in the business combination, (v) all pre-merger Fisker Options have vested and been exercised prior to the merger, (vi) none of Spartan’s initial stockholders or the Historical Rollover Stockholders purchase shares of Class A Common Stock in the open market, (vii) there are no other issuances of equity interests of Spartan and (viii) the automatic conversion of all outstanding shares of Fisker Class B Common Stock into shares of Fisker Class A Common Stock on a one-for-one basis, as if such conversion had occurred immediately prior to the completion of the business combination and (b) do not take into account private placement warrants and public warrants that will remain outstanding following the business combination and may be exercised at a later date.

 

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SUMMARY TERM SHEET

This Summary Term Sheet, together with the sections entitled “Questions and Answers About the Proposals for Spartan Stockholders” and “Summary of the Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached annexes, for a more complete understanding of the matters to be considered at the special meeting.

 

   

Spartan is a blank check company incorporated on October 13, 2017 as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. For more information about Spartan, see the section entitled “Information About Spartan.”

 

   

There are currently 55,200,000 shares of Spartan’s Class A Common Stock and 13,800,000 shares of Spartan’s Class B Common Stock issued and outstanding. In addition, there are currently 27,760,000 warrants of Spartan outstanding, consisting of 18,400,000 public warrants and 9,360,000 private placement warrants. Each whole warrant entitles the holder to purchase one whole share of Class A Common Stock for $11.50 per share. The warrants will become exercisable 30 days after the completion of an Initial Business Combination and will expire five years after the completion of an Initial Business Combination or earlier upon redemption or liquidation. Once the warrants become exercisable, Spartan may redeem the outstanding warrants, in whole and not in part, for cash in accordance with, and subject to the terms of, the warrant agreement. The private placement warrants, however, are non-redeemable so long as they are held by our Sponsor or its permitted transferees. For more information about the terms of the warrants, see the section entitled “Description of Securities—Warrants.”

 

   

Fisker, a Delaware corporation, is building a technology-enabled, asset-light automotive business model that it believes will be among the first of its kind and aligned with the future state of the automotive industry. Fisker combines the legendary design and engineering expertise of Henrik Fisker—the visionary behind the iconic BMW Z8 sports car and the famed Aston Martin DB9 and V8 Vantage, and—to develop high quality electric vehicles with strong emotional appeal by engaging the consumer’s senses through the overall experience of Fisker vehicles. Fisker believes it is well positioned through its global premium EV brand, its renowned design capabilities and sustainability focus. The Fisker mission is to create the world’s most emotional and sustainable vehicles. For more information about Fisker, see the sections entitled “Information About Fisker” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Fisker.”

 

   

On July 10, 2020, we and our wholly owned subsidiary, Merger Sub, entered into the Business Combination Agreement with Fisker. A copy of the Business Combination Agreement is attached to this proxy statement as Annex A.

 

   

Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein, Merger Sub will merge with and into Fisker, with Fisker surviving the merger as a wholly owned subsidiary of New Fisker. For more information about the Business Combination Agreement and the business combination, see the section entitled “Proposal No. 1—The Business Combination Proposal.”

 

   

At the Closing, 46,318,959 shares of Class A Common Stock will be issued to the Historical Rollover Stockholders in the business combination in exchange for all outstanding shares of Fisker Class A Common Stock, or reserved for issuance in respect of New Fisker options issued in exchange for outstanding pre-merger Fisker Options, assuming that certain provisions of the Business Combination Agreement do not result in an upward adjustment (including for Closing Cash (as defined in the Business Combination Agreement) of Fisker) to the number of such shares at Closing (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta). In addition, in connection with the Closing, New Fisker will implement a dual class stock structure comprised of Class A Common Stock, which will carry one vote per share, and Class B Common Stock, which will carry 10 votes per share. At the Closing, 129,122,242 shares of Class B

 

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Common Stock will be issued to Henrik Fisker and Dr. Geeta Gupta in the business combination in exchange for all outstanding shares of Fisker Class B Common Stock and Fisker Founders Stock. For more information about the Business Combination Agreement and the business combination, see the section entitled “Proposal No. 1—The Business Combination Proposal.”

 

   

The Closing is subject to the satisfaction (or waiver) of a number of conditions set forth in the Business Combination Agreement, including, among others, receipt of the requisite stockholder approval of the Business Combination Agreement and the business combination as contemplated by this proxy statement. For more information about the closing conditions to the business combination, see the section entitled “Proposal No. 1—The Business Combination Proposal—The Business Combination Agreement—Conditions to Closing of the Business Combination Agreement.”

 

   

The Business Combination Agreement may be terminated at any time prior to the consummation of the business combination upon mutual written consent of Spartan and Fisker, or for other reasons in specified circumstances. For more information about the termination rights under the Business Combination Agreement, see the section entitled “Proposal No. 1—The Business Combination Proposal—The Business Combination Agreement—Termination.”

 

   

The proposed business combination involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors.”

 

   

Under our Charter, in connection with the business combination, our public stockholders may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with our Charter. As of June 30, 2020, this would have amounted to approximately $10.32 per share. If a holder exercises its redemption rights, then such holder will be exchanging its public shares for cash and will no longer own shares of Spartan following the completion of the business combination and will not participate in the future growth of New Fisker, if any. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our transfer agent at least two business days prior to the special meeting. For more information regarding these procedures, see the section entitled “Special Meeting of Spartan Stockholders—Redemption Rights.”

 

   

We anticipate that, upon the Closing, the ownership of New Fisker will be as follows:

 

   

the Historical Rollover Stockholders other than Henrik Fisker and Dr. Geeta Gupta will own 29,905,433 shares of our Class A Common Stock, which will constitute 10.2% of our outstanding Common Stock;

 

   

Henrik Fisker and Dr. Geeta Gupta will own 16,413,516 shares of our Class A Common Stock, assuming they do not convert any of their Class B Common Stock to Class A Common Stock, which will constitute 5.6% of our outstanding Common Stock (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta);

 

   

the public stockholders will own 55,192,542 shares of our Class A Common Stock (assuming no further redemptions), which will constitute 18.8% of our outstanding Common Stock;

 

   

the New PIPE Investors will own 50,000,000 shares of our Class A Common Stock, which will constitute 17.0% of our outstanding Common Stock;

 

   

the initial stockholders will own 13,358,824 shares of our Class A Common Stock, which will constitute 4.5% of our outstanding Common Stock; and

 

   

Henrik Fisker and Dr. Geeta Gupta will own 129,122,242 shares of our Class B Common Stock, or 100% of our outstanding Class B Common Stock, assuming that the Class B Common Stock is not converted to Class A Common Stock, such that as of immediately following the completion of the business combination, taking into account all of their Class A Common Stock and Class B

 

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Common Stock, Henrik Fisker and Dr. Geeta Gupta will collectively have approximately 89.8% of the voting power of the capital stock of New Fisker on a fully-diluted basis.

The number of shares and the interests set forth above assume that (a) no public stockholders elect to have their public shares redeemed, (b) 50,000,000 shares of Class A Common Stock are issued in the PIPE Financing, (c) 46,318,959 shares of Class A Common Stock are issued to the Historical Rollover Stockholders in the business combination (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta), (d) all pre-merger Fisker Options have vested and been exercised prior to the merger, (e) none of Spartan’s initial stockholders or the Historical Rollover Stockholders purchase shares of Class A Common Stock in the open market, (f) 129,122,242 shares of our Class B Common Stock are issued to Henrik Fisker and Dr. Geeta Gupta in the business combination, (g) the automatic conversion of all outstanding shares of Fisker Class B Common Stock into shares of Fisker Class A Common Stock on a one-for-one basis, as if such conversion had occurred immediately prior to the completion of the business combination, (h) there are no other issuances of equity interests of New Fisker, and (i) no additional Closing Cash of Fisker upon the Closing (which otherwise will increase the number of shares of Class A Common Stock and Class B Common Stock issuable to Historical Rollover Stockholders). If we assume that 100% of the shares of Class A Common Stock held by our public stockholders, i.e., 55,200,000 shares, are redeemed and (b) – (g) remain true, the ownership of New Fisker upon the Closing will be as follows:

 

   

the Historical Rollover Stockholders other than Henrik Fisker and Dr. Geeta Gupta will own 29,905,443 shares of our Class A Common Stock, which will constitute 12.5% of our outstanding Common Stock;

 

   

Henrik Fisker and Dr. Geeta Gupta will own 16,413,516 shares of our Class A Common Stock, assuming they do not convert any of their Class B Common Stock to Class A Common Stock, which will constitute 6.9% of our outstanding Common Stock (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta);

 

   

the public stockholders will own no shares of our Class A Common Stock;

 

   

the New PIPE Investors will own 50,000,000 shares of our Class A Common Stock, which will constitute 20.9% of our outstanding Common Stock;

 

   

the initial stockholders will own 13,358,824 shares of our Class A Common Stock, which will constitute 5.6% of our outstanding Common Stock; and

 

   

Henrik Fisker and Dr. Geeta Gupta will own 129,122,242 shares of our Class B Common Stock, or 100% of our outstanding Class B Common Stock, assuming that the Class B Common Stock is not converted to Class A Common Stock, such that as of immediately following the completion of the business combination, taking into account all of their Class A Common Stock and Class B Common Stock, Henrik Fisker and Dr. Geeta Gupta will collectively have approximately 93.3% of the voting power of the capital stock of New Fisker on a fully-diluted basis.

The ownership percentages with respect to New Fisker set forth above do not take into account warrants to purchase Class A Common Stock that will remain outstanding immediately following the business combination, but do include the Founder Shares, which will convert into Class A Common Stock upon an Initial Business Combination. If the facts are different than these assumptions, the percentage ownership retained by Spartan’s existing stockholders in New Fisker following the business combination will be different. For example, if we assume that all outstanding 18,400,000 public warrants and 9,360,000 private placement warrants were exercisable and exercised following completion of the business combination and further assume that no public stockholders elect to have their public shares redeemed, then the ownership of New Fisker would be as follows:

 

   

the Historical Rollover Stockholders other than Henrik Fisker and Dr. Geeta Gupta will own 29,905,443 shares of our Class A Common Stock, which will constitute 9.3% of our outstanding Common Stock;

 

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Henrik Fisker and Dr. Geeta Gupta will own 16,413,516 shares of our Class A Common Stock, assuming they do not convert any of their Class B Common Stock to Class A Common Stock, which will constitute 5.1% of our outstanding Common Stock (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta);

 

   

the public stockholders will own 73,600,000 shares of our Class A Common Stock, which will constitute 22.9% of our outstanding Common Stock;

 

   

the New PIPE Investors will own 50,000,000 shares of our Class A Common Stock, which will constitute 15.5% of our outstanding Common Stock;

 

   

the initial stockholders will own 22,718,824 shares of our Class A Common Stock, which will constitute 7.1% of our outstanding Common Stock; and

 

   

Henrik Fisker and Dr. Geeta Gupta will own 129,122,242 shares of our Class B Common Stock, or 100% of our outstanding Class B Common Stock, assuming that the Class B Common Stock is not converted to Class A Common Stock, such that as of immediately following the completion of the business combination, taking into account all of their Class A Common Stock and Class B Common Stock, Henrik Fisker and Dr. Geeta Gupta will collectively have approximately 88.1% of the voting power of the capital stock of New Fisker on a fully-diluted basis.

The public warrants and private placement warrants will become exercisable 30 days after the completion of an Initial Business Combination and will expire five years after the completion of an Initial Business Combination or earlier upon their redemption or liquidation.

Please see the sections entitled “Summary of the Proxy Statement—Ownership of New Fisker After the Closing” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

   

The Spartan Board considered various factors in determining whether to approve the Business Combination Agreement and the business combination. For more information about the Spartan Board’s decision-making process, see the section entitled “Proposal No. 1—The Business Combination Proposal—Spartan Board’s Reasons for the Approval of the Business Combination.”

 

   

In addition to voting on the proposal to approve and adopt the Business Combination Agreement and the business combination (the “Business Combination Proposal”) at the special meeting, Spartan’s stockholders will also be asked to vote on the approval of:

 

   

an amendment to our Charter to (a) increase the number of authorized shares of our Class A Common Stock from 200,000,000 shares to 750,000,000 shares, (b) increase the number of authorized shares of our Class B Common Stock from 20,000,000 shares to 150,000,000 shares, and (c) increase the number of authorized shares of our Preferred Stock from 1,000,000 shares to 15,000,000 shares (the “Authorized Share Charter Proposal”);

 

   

an amendment to our Charter to implement a dual class stock structure comprised of Class A Common Stock, which will carry one vote per share, and Class B Common Stock, which will carry 10 votes per share (the “Dual Class Charter Proposal”);

 

   

amendments to our Charter to eliminate provisions in the Charter relating to an Initial Business Combination that will no longer be applicable to us following the Closing, change the post-combination company’s name to “Fisker Inc.” and make certain other changes that the Spartan Board deems appropriate for a public operating company (the “Additional Charter Proposal” and, together with the Authorized Share Charter Proposal and the Dual Class Charter Proposal, the “Charter Proposals”);

 

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for purposes of complying with applicable listing rules of the NYSE, (a) the issuance, or reservation for issuance in respect of New Fisker options issued in exchange for outstanding pre-merger Fisker Options, of 46,318,959 shares of Class A Common Stock to the Historical Rollover Stockholders (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta) and 129,122,242 shares of Class B Common Stock to Henrik Fisker and Dr. Geeta Gupta in the business combination and (b) the issuance and sale of 50,000,000 shares of Class A Common Stock in the PIPE Financing (the “NYSE Proposal”);

 

   

the New Fisker 2020 Equity Incentive Plan (the “2020 Plan”) and material terms thereunder (the “2020 Plan Proposal”);

 

   

the New Fisker 2020 Employee Stock Purchase Plan (the “ESPP”) and material terms thereunder (the “ESPP Proposal”);

 

   

the election of two directors to serve until the 2021 annual meeting of stockholders, three directors to serve until the 2022 annual meeting of stockholders and two directors to serve until the 2023 annual meeting of stockholders, and until their respective successors are duly elected and qualified, subject to such directors’ earlier death, resignation, retirement, disqualification or removal (the “Director Election Proposal”); and

 

   

the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposals, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal or the Director Election Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Charter Proposals, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal and the Director Election Proposal, the “Proposals”).

For more information, see the sections entitled “Proposal No. 2—The Authorized Share Charter Proposal,” “Proposal No. 3—The Dual Class Charter Proposal,” “Proposal No. 4—The Additional Charter Proposal,” “Proposal No. 5—The NYSE Proposal,” “Proposal No. 6—The 2020 Plan Proposal,” “Proposal No. 7—ESPP Proposal,” “Proposal No. 8—The Director Election Proposal” and “Proposal No. 9—The Adjournment Proposal.”

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

FOR SPARTAN STOCKHOLDERS

The following questions and answers briefly address some commonly asked questions about the Proposals to be presented at the special meeting of stockholders of Spartan, including the proposed business combination. The following questions and answers do not include all the information that is important to Spartan stockholders. We urge Spartan stockholders to carefully read this entire proxy statement, including the annexes and other documents referred to herein.

 

Q:

Why am I receiving this proxy statement?

 

A:

Spartan stockholders are being asked to consider and vote upon, among other things, a proposal to (a) approve and adopt the Business Combination Agreement, pursuant to which Merger Sub will merge with and into Fisker, with Fisker surviving the merger as a wholly owned subsidiary of New Fisker, (b) approve such merger and the other transactions contemplated by the Business Combination Agreement and (c) approve, for purposes of complying with applicable listing rules of the NYSE, (i) the issuance, or reservation for issuance in respect of New Fisker options issued in exchange for outstanding pre-merger Fisker Options, of 46,318,959 shares of Class A Common Stock to the Historical Rollover Stockholders (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta) and 129,122,242 shares of Class B Common Stock to Henrik Fisker and Dr. Geeta Gupta in the business combination and (ii) the issuance and sale of 50,000,000 shares of Class A Common Stock in the PIPE Financing. Subject to the terms and conditions set forth in the Business Combination Agreement, all outstanding shares of Fisker Class A Common Stock will be exchanged for shares of Class A Common Stock of New Fisker and all outstanding shares of Fisker Class B Common Stock and Fisker Founders Stock will be exchanged for shares of Class B Common Stock of New Fisker.

A copy of the Business Combination Agreement is attached to this proxy statement as Annex A. This proxy statement and its annexes contain important information about the proposed business combination and the other matters to be acted upon at the special meeting. You should read this proxy statement and its annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its annexes.

 

Q:

What is being voted on at the special meeting?

 

A:

Spartan stockholders will vote on the following proposals at the special meeting.

 

   

The Business Combination Proposal—To consider and vote upon a proposal to approve and adopt the Business Combination Agreement and the transactions contemplated thereby (Proposal No. 1).

 

   

The Charter Proposals—To consider and vote upon each of the following proposals to amend the Charter:

 

   

The Authorized Share Charter Proposal— To (a) increase the number of authorized shares of Spartan’s Class A Common Stock from 200,000,000 shares to 750,000,000 shares, (b) increase the number of authorized shares of Spartan’s Class B Common Stock from 20,000,000 shares to 150,000,000 shares, and (c) increase the number of authorized shares of Spartan’s Preferred Stock from 1,000,000 shares to 15,000,000 shares (the “Authorized Share Charter Proposal”) (Proposal No. 2);

 

   

The Dual Class Charter Proposal—To implement a dual class stock structure comprised of Class A Common Stock, which will carry one vote per share, and Class B common stock, which will carry 10 votes per share (Proposal No. 3); and

 

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Index to Financial Statements
   

The Additional Charter Proposal—To eliminate provisions in the Charter relating to Spartan’s Initial Business Combination that will no longer be applicable to Spartan following the Closing, change the post-combination company’s name to “Fisker Inc.” and make certain other changes that the Spartan Board deems appropriate for a public operating company (Proposal No. 4).

The full text of our proposed second amended and restated certificate of incorporation (the “Proposed Second A&R Charter”) reflecting each of the proposed amendments pursuant to the Charter Proposals is attached to this proxy statement as Annex B.

 

   

The NYSE Proposal—To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of the NYSE, (a) the issuance, or reservation for issuance in respect of New Fisker options issued in exchange for outstanding pre-merger Fisker Options, of 46,318,959 shares of Class A Common Stock to the Historical Rollover Stockholders and 129,122,242 shares of Class B Common Stock to Henrik Fisker and Dr. Geeta Gupta in the business combination and (b) the issuance and sale of 50,000,000 shares of Class A Common Stock in the PIPE Financing (Proposal No. 5).

 

   

The 2020 Plan Proposal—To consider and vote upon a proposal to approve and adopt the 2020 Plan and material terms thereunder (Proposal No. 6). A copy of the 2020 Plan is attached to this proxy statement as Annex C.

 

   

The ESPP Proposal— To consider and vote upon a proposal to approve and adopt the ESPP and material terms thereunder (Proposal No. 7). A copy of the ESPP is attached to this proxy statement as Annex D.

 

   

The Director Election Proposal—To consider and vote upon a proposal to elect two directors to serve until the 2021 annual meeting of stockholders, three directors to serve until the 2022 annual meeting of stockholders and two directors to serve until the 2023 annual meeting of stockholders, and until their respective successors are duly elected and qualified, subject to such directors’ earlier death, resignation, retirement, disqualification or removal (Proposal No. 8).

 

   

The Adjournment Proposal—To consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposals, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal or the Director Election Proposal (Proposal No. 9).

 

Q:

Are the Proposals conditioned on one another?

 

A:

We may not consummate the business combination unless the Business Combination Proposal, the Charter Proposals and the NYSE Proposal are approved at the special meeting. The Charter Proposals, the 2020 Plan Proposal, the ESPP Proposal and the Director Election Proposal are conditioned on the approval of the Business Combination Proposal and the NYSE Proposal. The Adjournment Proposal is not conditioned on the approval of any other Proposal set forth in this proxy statement.

 

Q:

What will happen in the business combination?

 

A:

On July 10, 2020, Spartan and Merger Sub entered into the Business Combination Agreement with Fisker. Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein, Merger Sub will merge with and into Fisker, with Fisker surviving the merger. After giving effect to the merger, Fisker will become a wholly owned subsidiary of New Fisker. At the Closing, 46,318,959 shares of Class A Common Stock will be issued to the Historical Rollover Stockholders in the business combination in exchange for all outstanding shares of Fisker Class A Common Stock (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta), or reserved for

 

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  issuance in respect of New Fisker options issued in exchange for outstanding pre-merger Fisker Options. In addition, in connection with the Closing, New Fisker will implement a dual class stock structure comprised of Class A Common Stock, which will carry one vote per share, and Class B Common Stock, which will carry 10 votes per share. At the Closing, 129,122,242 shares of Class B Common Stock will be issued to Henrik Fisker and Dr. Geeta Gupta in the business combination in exchange for all outstanding shares of Fisker Class B Common Stock and Fisker Founders Stock. For more information about the Business Combination Agreement and the business combination, see the section entitled “Proposal No. 1—The Business Combination Proposal.”

 

Q:

How were the transaction structure and consideration for the business combination determined?

Following our IPO, representatives of Spartan and our Sponsor contacted and were contacted by a number of individuals and entities with respect to business combination opportunities. Our Chief Executive Officer, Geoffrey Strong, and Joseph Romeo, a representative of our Sponsor, initially met with Henrik Fisker and Dr. Geeta Gupta in relation to a possible capital raise. After further conversations, Fisker and Spartan entered into an exclusive, non-binding letter of intent term sheet, which included a $1.75 billion purchase price (which assumed that Fisker, on a consolidated basis, would have no funded indebtedness at the Closing or any cash and cash equivalents of Fisker at the Closing), the dual class stock structure described elsewhere in this proxy statement and various closing conditions. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Background of the Business Combination” for additional information.

 

Q:

What conditions must be satisfied to complete the business combination?

 

A:

There are several closing conditions in the Business Combination Agreement, including the approval by our stockholders of the Business Combination Proposal. For a summary of the conditions that must be satisfied or waived prior to completion of the business combination, see the section entitled “Proposal No. 1—The Business Combination Proposal—The Business Combination Agreement—Conditions to Closing of the Business Combination Agreement.”

 

Q:

How will we be managed and governed following the business combination?

Immediately after the Closing, the Spartan Board will be divided into three separate classes, designated as follows:

 

   

Class I comprised of Wendy J. Greuel and Roderick K. Randall;

 

   

Class II comprised of Dr. Geeta Gupta, Nadine I. Watt and William R. McDermott; and

 

   

Class III comprised of Henrik Fisker and Mark E. Hickson.

It is anticipated that Henrik Fisker will be designated Chairman of the Board upon the Closing.

Please see the section entitled “Management After the Business Combination.”

 

Q:

Will Spartan obtain new financing in connection with the business combination?

 

A:

The New PIPE Investors have committed to purchase from Spartan 50,000,000 shares of Class A Common Stock, for an aggregate purchase price of approximately $500,000,000 in the PIPE Financing.

 

Q:

What equity stake will our current stockholders and the holders of our Founder Shares hold in New Fisker following the consummation of the business combination?

 

A:

We anticipate that, upon the Closing, the ownership of New Fisker will be as follows:

 

   

the Historical Rollover Stockholders other than Henrik Fisker and Dr. Geeta Gupta will own 29,905,443 shares of our Class A Common Stock, which will constitute 10.2% of our outstanding Common Stock;

 

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Index to Financial Statements
   

Henrik Fisker and Dr. Geeta Gupta will own 16,413,516 shares of our Class A Common Stock, assuming they do not convert any of their Class B Common Stock to Class A Common Stock, which will constitute 5.6% of our outstanding Common Stock (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta);

 

   

the public stockholders will own 55,192,542 shares of our Class A Common Stock (assuming no further redemptions), which will constitute 18.8% of our outstanding Common Stock;

 

   

the New PIPE Investors will own 50,000,000 shares of our Class A Common Stock, which will constitute 17.0% of our outstanding Common Stock;

 

   

the initial stockholders will own 13,358,824 shares of our Class A Common Stock, which will constitute 4.5% of our outstanding Common Stock; and

 

   

Henrik Fisker and Dr. Geeta Gupta will own 129,122,242 shares of our Class B Common Stock, or 100% of our outstanding Class B Common Stock, assuming that the Class B Common Stock is not converted to Class A Common Stock, such that as of immediately following the completion of the business combination, taking into account all of their Class A Common Stock and Class B Common Stock, Henrik Fisker and Dr. Geeta Gupta will collectively have approximately 89.8% of the voting power of the capital stock of New Fisker on a fully-diluted basis.

The number of shares and the interests set forth above assume that (a) no public stockholders elect to have their public shares redeemed, (b) 50,000,000 shares of Class A Common Stock are issued in the PIPE Financing, (c) 46,318,959 shares of Class A Common Stock are issued to the Historical Rollover Stockholders in the business combination (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta), (d) all pre-merger Fisker Options have vested and been exercised prior to the merger, (e) none of Spartan’s initial stockholders or the Historical Rollover Stockholders purchase shares of Class A Common Stock in the open market, (f) 129,122,242 shares of our Class B Common Stock are issued to Henrik Fisker and Dr. Geeta Gupta in the business combination, (g) the automatic conversion of all outstanding shares of Fisker Class B Common Stock into shares of Fisker Class A Common Stock on a one-for-one basis, as if such conversion had occurred immediately prior to the completion of the business combination, (h) there are no other issuances of equity interests of New Fisker, and (i) no additional Closing Cash of Fisker upon the Closing (which otherwise will increase the number of shares of Class A Common Stock and Class B Common Stock issuable to Historical Rollover Stockholders). As a result of the business combination, the economic and voting interests of our public stockholders will decrease.

The ownership percentages with respect to New Fisker set forth above do not take into account warrants to purchase Class A Common Stock that will remain outstanding immediately following the business combination, but do include the Founder Shares, which will convert into Class A Common Stock upon an Initial Business Combination. If the facts are different than these assumptions, the percentage ownership retained by Spartan’s existing stockholders in New Fisker following the business combination will be different. For example, if we assume that all outstanding 18,400,000 public warrants and 9,360,000 private placement warrants were exercisable and exercised following completion of the business combination and further assume that no public stockholders elect to have their public shares redeemed, then the ownership of New Fisker would be as follows:

 

   

the Historical Rollover Stockholders other than Henrik Fisker and Dr. Geeta Gupta will own 29,905,443 shares of our Class A Common Stock, which will constitute 9.3% of our outstanding Common Stock;

 

   

Henrik Fisker and Dr. Geeta Gupta will own 16,413,516 shares of our Class A Common Stock, assuming they do not convert any of their Class B Common Stock to Class A Common Stock, which will constitute 5.1% of our outstanding Common Stock (including 918,637 shares of Class A Common

 

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Index to Financial Statements
 

Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta);

 

   

the public stockholders will own 73,600,000 shares of our Class A Common Stock, which will constitute 22.9% of our outstanding Common Stock;

 

   

the New PIPE Investors will own 50,000,000 shares of our Class A Common Stock, which will constitute 15.5% of our outstanding Common Stock;

 

   

the initial stockholders will own 22,718,824 shares of our Class A Common Stock, which will constitute 7.1% of our outstanding Common Stock; and

 

   

Henrik Fisker and Dr. Geeta Gupta will own 129,122,242 shares of our Class B Common Stock, or 100% of our outstanding Class B Common Stock, assuming that the Class B Common Stock is not converted to Class A Common Stock, such that as of immediately following the completion of the business combination, taking into account all of their Class A Common Stock and Class B Common Stock, Henrik Fisker and Dr. Geeta Gupta will collectively have approximately 88.1% of the voting power of the capital stock of New Fisker on a fully-diluted basis.

The public warrants and private placement warrants will become exercisable 30 days after the completion of an Initial Business Combination and will expire five years after the completion of an Initial Business Combination or earlier upon their redemption or liquidation.

Please see the sections entitled “Summary of the Proxy Statement—Ownership of New Fisker After the Closing” and “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

Q:

Why is Spartan proposing the amendments to the Charter set forth in the Charter Proposals?

 

A:

Spartan is proposing amendments to the Charter to approve certain items required to effectuate the business combination and other matters the Spartan Board believes are appropriate for the operation of New Fisker, including providing for, among other things, (a) an increase in the number of authorized shares of Spartan’s Class A Common Stock from 200,000,000 shares to 750,000,000 shares, (b) an increase in the number of authorized shares of Spartan’s Class B Common Stock from 20,000,000 shares to 150,000,000 shares, (c) an increase in the number of authorized shares of Spartan’s Preferred Stock from 1,000,000 shares to 15,000,000 shares, (d) the implementation of a dual class stock structure comprised of Class A Common Stock, which will carry one vote per share, and Class B Common Stock, which will carry 10 votes per share and (e) the elimination of certain provisions relating to an Initial Business Combination that will no longer be applicable to Spartan following the Closing, change the post-combination company’s name to “Fisker Inc.” and make certain other changes that the Spartan Board deems appropriate for a public operating company. Under the Charter and Delaware law, stockholder approval is required in order to effect the Charter Proposals. See the sections entitled “Proposal No. 2—The Authorized Share Charter Proposal,” “Proposal No. 3—The Dual Class Charter Proposal” and “Proposal No. 4—The Additional Charter Proposal” for additional information.

 

Q:

Why is Spartan proposing the NYSE Proposal?

 

A:

Spartan is proposing the NYSE Proposal in order to comply with NYSE Listing Rules, which require stockholder approval of certain transactions that result in the issuance of 20% or more of a company’s outstanding voting power or shares of common stock outstanding before the issuance of stock or securities. In connection with the business combination and PIPE Financing, we may issue up to an aggregate of 96,318,959 shares of Class A Common Stock (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta) and 129,122,242 shares of Class B Common Stock. The Class A Common Stock will carry one vote per share and the Class B Common Stock will carry 10 votes per share. Accordingly, we may issue shares representing up to 2,003.6% of the voting power of

 

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  shares of Class A Common Stock and Class B Common Stock outstanding on the date of this proxy statement. Because we may issue 20% or more of our outstanding voting power and outstanding common stock in connection with the business combination, we are required to obtain stockholder approval of such issuances pursuant to NYSE Listing Rules. See the section entitled “Proposal No. 5—The NYSE Proposal” for additional information.

 

Q:

Did the Spartan Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the business combination?

 

A:

No. The Spartan Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the business combination. Spartan’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Spartan’s advisors, enabled them to make the necessary analyses and determinations regarding the business combination. In addition, Spartan’s officers, directors and advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of the Spartan Board in valuing Fisker and assuming the risk that the Spartan Board may not have properly valued the business.

 

Q:

What happens if I sell my shares of Class A Common Stock before the special meeting?

 

A:

The record date for the special meeting is earlier than the date that the business combination is expected to be completed. If you transfer your shares of Class A Common Stock after the record date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your shares of Class A Common Stock because you will no longer be able to deliver them for cancellation upon consummation of the business combination in accordance with the provisions described in this proxy statement. If you transfer your shares of Class A Common Stock prior to the record date, you will have no right to vote those shares at the special meeting or seek redemption of those shares.

 

Q:

How has the announcement of the business combination affected the trading price of Spartan’s units, Class A Common Stock and warrants?

 

A:

On July 9, 2020, the last trading date before the public announcement of the business combination, Spartan’s public units, Class A Common Stock and public warrants closed at $16.08, $14.99 and $4.12, respectively. On October 2, 2020 the trading date immediately prior to the date of this proxy statement, Spartan’s public units, Class A Common Stock and warrants closed at $15.22, $14.35 and $4.28 respectively.

 

Q:

Following the business combination, will Spartan’s securities continue to trade on a stock exchange?

 

A:

Yes. We anticipate that, following the business combination, our Class A Common Stock and public warrants will continue trading on the NYSE under the new symbols “FSR” and “FSR WS,” respectively. Our units will automatically separate into the component securities upon consummation of the business combination and, as a result, will no longer trade as a separate security following the business combination.

 

Q:

What vote is required to approve the Proposals presented at the special meeting?

 

A:

Approval of each of the Business Combination Proposal, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal and the Adjournment Proposal requires the affirmative vote (online or by proxy) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock entitled to vote and actually cast thereon, voting as a single class. Approval of the Charter Proposals requires the affirmative vote (online or by proxy) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock entitled to vote thereon at the special meeting, voting as a single class.

 

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Index to Financial Statements

Approval of the Director Election Proposal requires the affirmative vote of a plurality of the votes cast by holders of our Class A Common Stock and Class B Common Stock virtually present or represented by proxy at the special meeting and entitled to vote thereon. This means that the seven director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions will have no effect on the Director Election Proposal.

 

Q:

May Spartan’s Sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in connection with the business combination?

 

A:

In connection with the stockholder vote to approve the proposed business combination, our Sponsor, directors, officers, advisors and any of their respective affiliates may privately negotiate to purchase public shares from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per share pro rata portion of the Trust Account. Our Sponsor, directors, officers, advisors and any of their respective affiliates will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller of such public shares or during a restricted period under Regulation M under the Exchange Act. Such a purchase could include a contractual acknowledgement that such stockholder, although still the record holder of such public shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual provision that directs such stockholder to vote such shares in a manner directed by the purchaser. In the event that our Sponsor, directors, officers, advisors or any of their respective affiliates purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the per share pro rata portion of the Trust Account.

 

Q:

How many votes do I have at the special meeting?

 

A:

Our stockholders are entitled to one vote at the special meeting for each share of Class A Common Stock or Class B Common Stock held of record as of October 1, 2020, the record date for the special meeting. As of the close of business on the record date, there were 55,200,000 outstanding shares of Class A Common Stock, which are held by our public stockholders, and 13,800,000 outstanding shares of Class B Common Stock, which are held by our initial stockholders.

 

Q:

What constitutes a quorum at the special meeting?

 

A:

Holders of a majority in voting power of Class A Common Stock and Class B Common Stock issued and outstanding and entitled to vote at the special meeting, virtually present or represented by proxy, constitute a quorum. In the absence of a quorum, the chairman of the meeting has the power to adjourn the special meeting. As of the record date for the special meeting, 34,500,001 shares of Class A Common Stock and Class B Common Stock, in the aggregate, would be required to achieve a quorum. Abstentions will count as present for the purposes of establishing a quorum with respect to each Proposal.

 

Q:

How will Spartan’s Sponsor, directors and officers vote?

 

A:

Our Sponsor, directors and officers have agreed to vote any shares of Class A Common Stock and Class B Common Stock owned by them in favor of the business combination. Currently, our initial stockholders own approximately 20% of our issued and outstanding shares of Class A Common Stock and Class B Common Stock, in the aggregate.

 

Q:

What interests do the current officers and directors have in the business combination?

 

A:

In considering the recommendation of the Spartan Board to vote in favor of the business combination, stockholders should be aware that, aside from their interests as stockholders, our Sponsor and certain of our

 

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  directors and officers have interests in the business combination that are different from, or in addition to, those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the business combination, and in recommending to stockholders that they approve the business combination. Stockholders should take these interests into account in deciding whether to approve the business combination. These interests include, among other things:

 

   

the fact that our Sponsor holds 9,360,000 private placement warrants that would expire worthless if a business combination is not consummated;

 

   

the fact that our Sponsor, officers and directors have agreed not to redeem any of the shares of our common stock held by them in connection with a stockholder vote to approve the business combination;

 

   

the fact that our Sponsor paid an aggregate of $25,000 for the Founder Shares, including 412,500 Founder Shares that were subsequently transferred to our independent directors and John J. MacWilliams, a non-independent member of the Spartan Board, and that such securities will have a significantly higher value at the time of the business combination, which if unrestricted and freely tradable would be valued at approximately $207.7 million, based on the closing price of our Class A Common Stock of $15.05 per share on October 1, 2020;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an Initial Business Combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser amount per public share as is in the Trust Account on the liquidation date, by the claims of (a) any third party (other than our independent public accountants) for services rendered or products sold to us or (b) a prospective target business with which we have entered into a letter of intent, confidentiality or other similar agreement or business combination agreement, but only if such a third party or target business has not executed a waiver of all rights to seek access to the Trust Account;

 

   

the fact that our independent directors and John J. MacWilliams, a non-independent member of the Spartan Board, own an aggregate of 412,500 Founder Shares that were transferred from our Sponsor, which if unrestricted and freely tradeable would be valued at approximately $6.2 million, based on the closing price of our Class A Common Stock of $15.05 per share on October 1, 2020;

 

   

the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations; and

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us if an Initial Business Combination is not completed.

 

Q:

What happens if I vote against the Business Combination Proposal?

 

A:

Under our Charter, if the Business Combination Proposal is not approved and we do not otherwise consummate an alternative business combination by February 14, 2021, we will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to our public stockholders.

 

Q:

Do I have redemption rights?

 

A:

If you are a holder of public shares, you may elect to have your public shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the business combination, including interest not previously released to us to pay our franchise and income taxes, by (b) the total number of then outstanding shares of Class A Common Stock included as part of the units sold

 

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  in the IPO; provided that we will not redeem any public shares to the extent that such redemption would result in Spartan having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act ) of less than $5,000,001. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 20% of the public shares (the “20% threshold”). Unlike some other blank check companies, other than the net tangible asset requirement and the 20% threshold described above, we have no specified maximum redemption threshold and there is no other limit on the amount of public shares that you can redeem. Holders of our outstanding public warrants do not have redemption rights in connection with the business combination. Our Sponsor, officers and directors have agreed to waive their redemption rights with respect to any shares of our common stock they may hold in connection with the consummation of the business combination. For illustrative purposes, based on the fair value of cash and marketable securities held in the Trust Account as of June 30, 2020 of approximately $569.6 million, the estimated per share redemption price would have been approximately $10.32. Additionally, shares properly tendered for redemption will only be redeemed if the business combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest but net of franchise and income taxes payable) (a) in connection with a stockholder vote to approve an amendment to our Charter that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an Initial Business Combination by February 14, 2021, (b) in connection with the liquidation of the Trust Account or (c) if we subsequently complete a different business combination on or before.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A:

No. You may exercise your redemption rights whether you vote your shares of Class A Common Stock for or against or abstain from voting on the Business Combination Proposal or any other proposal described in this proxy statement. As a result, the business combination can be approved by stockholders who will redeem their shares and no longer remain stockholders.

 

Q:

How do I exercise my redemption rights?

 

A:

In order to exercise your redemption rights, you must (a) if you hold your shares of Class A Common Stock through units, elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares, and (b) prior to 5:00 p.m., Eastern time, on October 26, 2020 (two business days before the special meeting), tender your shares physically or electronically and submit a request in writing that we redeem your public shares for cash to Continental Stock Transfer & Trust Company, our transfer agent, at the following address:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004-1561

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to his, her or its shares or, if part of such a group, the group’s shares, in excess of the 20% threshold. Accordingly, all public shares in excess of the 20% threshold beneficially owned by a public stockholder or group will not be redeemed for cash. Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent.

 

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However, we do not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Holders of our outstanding units must separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold units registered in your own name, you must deliver the certificate for such units or deliver such units electronically to Continental Stock Transfer & Trust Company with written instructions to separate such units into public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share certificates or electronic delivery of the public shares back to you so that you may then exercise your redemption rights with respect to the public shares following the separation of such public shares from the units.

If a broker, dealer, commercial bank, trust company or other nominee holds your units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using The Depository Trust Company’s (“DTC”) DWAC (deposit withdrawal at custodian) system, a withdrawal of the relevant units and a deposit of the corresponding number of public shares and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights with respect to the public shares following the separation of such public shares from the units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the vote is taken with respect to the business combination. If you delivered your shares for redemption to the transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that the transfer agent return the shares (physically or electronically). You may make such request by contacting our transfer agent at the email address or address listed under the question “Who can help answer my questions?” below.

 

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

The U.S. federal income tax consequences of a redemption depend on a holder’s particular facts and circumstances. See the section entitled “Proposal No. 1—The Business Combination Proposal—Certain U.S. Federal Income Tax Considerations.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights and to rely solely upon their advice.

 

Q:

If I am a warrant holder, can I exercise redemption rights with respect to my warrants?

 

A:

No. The holders of our warrants have no redemption rights with respect to our warrants.

 

Q:

Do I have appraisal rights if I object to the proposed business combination?

 

A:

No. There are no appraisal rights available to holders of Class A Common Stock or Class B Common Stock in connection with the business combination.

 

Q:

What happens to the funds deposited in the Trust Account after consummation of the business combination?

 

A:

If the Business Combination Proposal is approved, we intend to use a portion of the funds held in the Trust Account to pay (a) a portion of our aggregate costs, fees and expenses in connection with the consummation

 

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  of the business combination, (b) tax obligations and deferred underwriting discounts and commissions from the IPO and (c) for any redemptions of public shares. The remaining balance in the Trust Account, together with PIPE Proceeds, will be used for general corporate purposes of New Fisker. See the section entitled “Proposal No. 1—The Business Combination Proposal” for additional information.

 

Q:

What happens if the business combination is not consummated or is terminated?

 

A:

There are certain circumstances under which the Business Combination Agreement may be terminated. See the section entitled “Proposal No. 1—The Business Combination Proposal—The Business Combination Agreement—Termination” for additional information regarding the parties’ specific termination rights. In accordance with our Charter, if an Initial Business Combination is not consummated by February 14, 2021, we will (a) cease all operations except for the purpose of winding up, (b) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (c) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the Spartan Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

We expect that the amount of any distribution our public stockholders will be entitled to receive upon our dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the business combination, subject in each case to our obligations under the General Corporation Law of the State of Delaware (“DGCL”) to provide for claims of creditors and other requirements of applicable law. Holders of our Founder Shares have waived any right to any liquidating distributions with respect to those shares.

In the event of liquidation, there will be no distribution with respect to our outstanding warrants. Accordingly, the warrants will expire worthless.

 

Q:

When is the business combination expected to be consummated?

 

A:

It is currently anticipated that the business combination will be consummated promptly following the special meeting of our stockholders to be held on October 28, 2020, provided that all the requisite stockholder approvals are obtained and other conditions to the consummation of the business combination have been satisfied or waived. For a description of the conditions for the completion of the business combination, see the section entitled “Proposal No. 1—The Business Combination Proposal—The Business Combination Agreement—Conditions to Closing of the Business Combination Agreement.”

 

Q:

What do I need to do now?

 

A:

You are urged to read carefully and consider the information contained in this proxy statement, including the section entitled “Risk Factors” and the annexes attached to this proxy statement, and to consider how the business combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

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Q:

How do I vote?

 

A:

If you were a holder of record of Class A Common Stock or Class B Common Stock on October 1, 2020, the record date for the special meeting of our stockholders, you may vote with respect to the proposals online at the virtual special meeting or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to virtually attend the special meeting and vote online, obtain a proxy from your broker, bank or nominee.

 

Q:

What will happen if I abstain from voting or fail to vote at the special meeting?

 

A:

At the special meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, failure to vote or an abstention will have no effect on the Business Combination Proposal, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal, the Director Election Proposal or the Adjournment Proposal, but will have the same effect as a vote AGAINST the Charter Proposals.

 

Q:

What will happen if I sign and submit my proxy card without indicating how I wish to vote?

 

A:

Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each Proposal (or in the case of the Director Election Proposal, “FOR ALL NOMINEES”) being submitted to a vote of the stockholders at the special meeting .

 

Q:

If I am not going to attend the virtual special meeting online, should I submit my proxy card instead?

 

A:

Yes. Whether you plan to attend the special meeting or not, please read the enclosed proxy statement carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. We believe the Proposals presented to our stockholders will be considered non-discretionary and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

Q:

May I change my vote after I have submitted my executed proxy card?

 

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to us at the address listed below so that it is received by us prior to the special meeting or by attending the virtual special meeting online and voting there. You also may revoke your proxy by sending a notice of revocation to us, which must be received prior to the special meeting.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which

 

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  you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the proposals or if you need additional copies of the proxy statement or the enclosed proxy card you should contact:

Geoffrey Strong, Chief Executive Officer

c/o Spartan Energy Acquisition Corp.

9 West 57th Street, 43rd Floor

New York, New York 10019

Email: info@spartanenergyspac.com

Tel: (212) 515-3200

You may also contact our proxy solicitor at:

Morrow Sodali LLC

470 West Avenue

Stamford, Connecticut 06902

Telephone: (800) 662-5200

(banks and brokers call collect at (203) 658-9400)

Email: SPAQ.info@investor.morrowsodali.com

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the special meeting.

You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find Additional Information.”

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your shares (either physically or electronically) to our transfer agent at least two business days prior to the special meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your shares, please contact:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004-1561

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

 

Q:

Who will solicit and pay the cost of soliciting proxies?

 

A:

The Spartan Board is soliciting your proxy to vote your shares of Class A Common Stock and Class B Common Stock on all matters scheduled to come before the special meeting. We will pay the cost of soliciting proxies for the special meeting. We have engaged Morrow Sodali LLC to assist in the solicitation of proxies for the special meeting. We have agreed to pay Morrow Sodali LLC a fee of $35,000, plus disbursements. We will reimburse Morrow Sodali LLC for reasonable out-of-pocket expenses and will indemnify Morrow Sodali LLC and its affiliates against certain claims, liabilities, losses, damages and expenses. We will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of Class A Common Stock and Class B Common Stock for their expenses in forwarding soliciting materials to beneficial owners of Class A Common Stock and Class B Common Stock and in obtaining voting instructions from those owners. Our directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

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SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. To better understand the business combination and the proposals to be considered at the special meeting, you should read this entire proxy statement carefully, including the annexes. See also the section entitled “Where You Can Find Additional Information.”

Parties to the Business Combination

Spartan Energy Acquisition Corp.

Spartan is a Delaware corporation formed on October 13, 2017 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving Spartan and one or more businesses. Upon the Closing, we intend to change our name from “Spartan Energy Acquisition Corp.” to “Fisker Inc.”

Our Class A Common Stock, public warrants, and units, consisting of one share of Class A Common Stock and one-third of one warrant, are traded on the NYSE under the ticker symbols “SPAQ,” “SPAQ WS” and “SPAQ.U,” respectively. We intend to apply to continue the listing of our Class A Common Stock and warrants on the NYSE under the symbols “FSR” and “FSR WS,” respectively, upon the Closing. The units will automatically separate into the component securities upon consummation of the business combination and, as a result, will no longer trade as a separate security.

The mailing address of our principal executive office is 9 West 57th Street, 43rd Floor, New York, New York 10019, and our telephone number is (212) 258-0947.

Fisker Inc.

Fisker is building a technology-enabled, asset-light automotive business model that it believes will be among the first of its kind and aligned with the future state of the automotive industry. Fisker combines the legendary design and engineering expertise of Henrik Fisker—the visionary behind the iconic BMW Z8 sports car and the famed Aston Martin DB9 and V8 Vantage, and—to develop high quality electric vehicles with strong emotional appeal by engaging the consumer’s senses through the overall experience of Fisker vehicles. Fisker believes it is well positioned through its global premium EV brand, its renowned design capabilities and sustainability focus. 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 EV platform in the specific segment size. The Fisker mission is to create the world’s most emotional and sustainable vehicles. Fisker’s goal is to revolutionize how customers view personal transportation and car ownership. Fisker plans to employ an innovative “E-Mobility-as-a-Service” (“EMaaS”) business model that combines a customer-focused experience with flexible leasing options with affordable monthly payments and no fixed term. Fisker’s first vehicle, the Fisker Ocean, a five-passenger vehicle with potentially a 250- to over 300-mile range and state-of-the-art autonomous driving capabilities, will stand out due to Fisker’s innovative and timeless design and a re-imagined customer experience delivered through an advanced software-based user interface. Fisker has designed the Fisker Ocean for a high degree of sustainability, using recycled rubber, eco-suede interior trim made from recycled polyester, and carpeting from fishing nets and bottles recycled from ocean waste, among other sustainable features.

The mailing address of Fisker’s principal executive office is 1850 Francisco Street, Suite B, Torrance, California 90501, and its telephone number is (833) 434-7537.

For more information about Fisker, see the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Fisker” and “Information About Fisker.”



 

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The Business Combination

On July 10, 2020, we entered into the Business Combination Agreement with Merger Sub and Fisker. Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein, Merger Sub will merge with and into Fisker, with Fisker surviving the merger. After giving effect to the merger, Fisker will become a wholly owned subsidiary of New Fisker.

Immediately prior to the effective time of the merger (the “Effective Time”), Fisker shall cause each share of Fisker Preferred Stock that is issued and outstanding immediately prior to the Effective Time to be automatically converted into a number of shares of Fisker Class A Common Stock in accordance with the terms of Fisker’s amended and restated certificate of incorporation. All of the shares of Fisker Preferred Stock converted into shares of Fisker Class A Common Stock will no longer be outstanding and will cease to exist, and each holder of Fisker Preferred Stock will thereafter cease to have any rights with respect to such securities.

Also immediately prior to the Effective Time, Fisker will cause the outstanding principal and accrued but unpaid interest due on the Fisker Convertible Notes immediately prior to the Effective Time to be automatically converted into a number of shares of Fisker Class A Common Stock at the per share conversion price set forth in the applicable Fisker Convertible Note. All of the Fisker Convertible Notes converted into shares of Fisker Class A Common Stock will no longer be outstanding and will cease to exist and each holder of Fisker Convertible Notes will thereafter cease to have any rights with respect to such securities.

Also immediately prior to the Effective Time, Fisker will cause the Fisker Convertible Equity Security that is issued and outstanding immediately prior to the Effective Time to be automatically converted into 5,882,352 shares of Fisker Class A Common Stock. The Fisker Convertible Equity Security that is converted into shares of Fisker Class A Common Stock will no longer be outstanding and will cease to exist, and each holder of the Fisker Convertible Equity Security will thereafter cease to have any rights with respect to such security.

At the Effective Time, by virtue of the merger and without any action on the part of Spartan, Merger Sub, Fisker or the holders of any of Fisker’s securities:

 

   

each share of Fisker Class A Common Stock issued and outstanding immediately prior to the Effective Time (including shares of Fisker Class A Common Stock resulting from the conversion of Fisker Preferred Stock and Fisker Convertible Notes described above, but excluding shares of Fisker Class A Common Stock resulting from the conversion of the Fisker Convertible Equity Security described above) will be canceled and converted into the right to receive the number of shares of Class A Common Stock equal to the Exchange Ratio;

 

   

each share of Fisker Class A Common Stock issued and outstanding immediately prior to the Effective Time resulting from the conversion of the Fisker Convertible Equity Security described above will be canceled and converted into the right to receive one share of Class A Common Stock;

 

   

each share of Fisker Class B Common Stock issued and outstanding immediately prior to the Effective Time will be canceled and converted into the right to receive the number of shares of Class B Common Stock equal to the Exchange Ratio;

 

   

each share of Fisker Founders Stock issued and outstanding immediately prior to the Effective Time will be canceled and converted into the right to receive the number of shares of Class B Common Stock equal to the product (rounded up or down to the nearest whole number, with a fraction of 0.5 rounded up) of (x) the number of shares of Fisker Class A Common Stock that would have been issuable upon the conversion of such share of Fisker Founders Stock at the then-effective conversion rate as calculated pursuant to Fisker’s amended and restated certificate of incorporation and (y) the Exchange Ratio;



 

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all shares of Fisker Common Stock, Fisker Preferred Stock, Fisker Founders Stock and the Fisker Convertible Equity Security held in the treasury of Fisker will be canceled without any conversion thereof and no payment or distribution will be made with respect thereto;

 

   

each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time will be converted into and exchanged for one-tenth of a validly issued, fully paid and nonassessable share of common stock, par value $0.00001 per share, of the Surviving Corporation; and

 

   

each Fisker Option that is outstanding immediately prior to the Effective Time, whether vested or unvested, will be converted into an option to purchase a number of shares of Class A Common Stock (such option, an “Exchanged Option”) equal to the product (rounded up or down to the nearest whole number, with a fraction of 0.5 rounded up) of (a) the number of shares of Fisker Class A Common Stock subject to such Fisker Option immediately prior to the Effective Time and (b) the Exchange Ratio, at an exercise price per share (rounded up or down to the nearest whole cent, with a fraction of $0.005 rounded up) equal to (i) the exercise price per share of such Fisker Option immediately prior to the Effective Time divided by (ii) the Exchange Ratio. Except as specifically provided in the Business Combination Agreement, following the Effective Time, each Exchanged Option will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Fisker Option immediately prior to the Effective Time.

Pursuant to the terms of the Charter, the Class B Common Stock outstanding prior to the Effective Time will convert into Class A Common Stock at the Closing. All of the shares of Class B Common Stock converted into shares of Class A Common Stock will no longer be outstanding and will cease to exist, and each holder of such Class B Common Stock will thereafter cease to have any rights with respect to such securities.

For more information about the Business Combination Agreement and the business combination and other transactions contemplated thereby, see the section entitled “Proposal No. 1—The Business Combination Proposal.”

Conditions to the Closing

The obligations of Spartan, Merger Sub and Fisker to consummate the business combination are subject to the satisfaction or waiver (where permissible) at or prior to the Effective Time of each of the following mutual conditions:

 

   

the Written Consent (as defined below) shall have been delivered to Spartan;

 

   

the Proposals shall have been approved and adopted by the requisite affirmative vote of the Spartan stockholders in accordance with this proxy statement, the DGCL, Spartan’s organizational documents and the rules and regulations of the NYSE;

 

   

no governmental authority shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, executive order or award which is then in effect and has the effect of making the business combination illegal or otherwise prohibiting consummation of the business combination;

 

   

all required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), shall have been completed and any applicable waiting period (and any extension thereof) applicable to the consummation of the business combination under the HSR Act shall have expired or been terminated (we received notice of early termination of the waiting period under the HSR Act on August 4, 2020); and

 

   

the shares of Class A Common Stock shall be listed on the NYSE, or another national securities exchange mutually agreed to by the parties, as of the Closing Date.



 

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The obligations of Spartan and Merger Sub to consummate the business combination are subject to the satisfaction or waiver (where permissible) at or prior to the Effective Time of the following additional conditions:

 

   

the representations and warranties of Fisker contained in the sections titled (a) “Organization and Qualification; Subsidiaries,” (b) “Capitalization” (other than certain provisions in such section as described below), (c) “Authority Relative to the Business Combination Agreement” and (d) “Brokers” in the Business Combination Agreement shall each be true and correct in all material respects as of the date of the Business Combination Agreement and the Effective Time, except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier specified date. Certain of the representations and warranties of Fisker contained in the section titled “Absence of Certain Changes or Events” in the Business Combination Agreement shall be true and correct in all respects as of the date of the Business Combination Agreement and the Effective Time. Certain of the representations and warranties in the section titled “Capitalization” in the Business Combination Agreement shall be true and correct in all respects except for de minimis inaccuracies as of the date of the Business Combination Agreement and as of the Effective Time as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such specified date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, be reasonably expected to result in more than de minimis additional cost, expense or liability to Fisker, Spartan, Merger Sub or any of their respective affiliates. The other representations and warranties of Fisker contained in the Business Combination Agreement shall be true and correct in all respects (without giving effect to any “materiality,” “Fisker Material Adverse Effect” (as defined below) or similar qualifiers contained in any such representations and warranties) as of the date of the Business Combination Agreement and as of the Effective Time as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failures of any such representations and warranties to be so true and correct, individually or in the aggregate, would not reasonably be expected to have a Fisker Material Adverse Effect;

 

   

Fisker shall have performed or complied in all material respects with all agreements and covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Effective Time;

 

   

Fisker shall have delivered to Spartan a customary officer’s certificate, dated the date of the Closing, certifying as to the satisfaction of certain conditions;

 

   

no Fisker Material Adverse Effect shall have occurred between the date of the Business Combination Agreement and the Effective Time;

 

   

other than those persons identified as continuing directors in the Business Combination Agreement, all members of the board of directors of Fisker and the board of directors of Fisker’s subsidiaries shall have executed written resignations effective as of the Effective Time;

 

   

all parties to the A&R Registration Rights Agreement (as defined below) (other than Spartan and the Spartan stockholders party thereto) shall have delivered, or caused to be delivered, to Spartan copies of the A&R Registration Rights Agreement duly executed by all such parties;

 

   

all parties to the Lock-Up Agreements (as defined below) shall have delivered, or caused to be delivered, to Spartan copies of the Lock-Up Agreements duly executed by all such parties;

 

   

at least two days prior to the Closing, Fisker shall have delivered to Spartan in a form reasonably acceptable to Spartan a properly executed certification that shares of Fisker Common Stock are not “U.S. real property interests” in accordance with Treasury Regulation Section 1.1445-2(c)(3), together



 

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with a notice to the IRS (which will be filed by Spartan with the IRS at or following the Closing) in accordance with the provisions of Section 1.897-2(h)(2) of the Treasury Regulations;

 

   

Spartan shall have at least $5,000,001 of net tangible assets following the exercise of redemption rights by the holders of Class A Common Stock in accordance with Spartan’s organizational documents;

 

   

the sale and issuance by Spartan of the PIPE Shares in connection with the PIPE Financing shall have been consummated prior to or in connection with the Effective Time; and

 

   

Fisker shall have delivered Fisker’s audited financial statements to Spartan.

The obligations of Fisker to consummate the business combination are subject to the satisfaction or waiver (where permissible) at or prior to the Closing of the following additional conditions:

 

   

the representations and warranties of Spartan and Merger Sub contained in the sections titled (a) “Corporate Organization,” (b) “Capitalization” (other than certain provisions in such section as described below) (c) “Authority Relative to the Business Combination Agreement” and (d) “Brokers” in the Business Combination Agreement shall each be true and correct in all material respects as of the date of the Business Combination Agreement and the Effective Time, except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier specified date. Certain of the representations and warranties of Spartan and Merger Sub contained in the section titled “Absence of Certain Changes or Events” in the Business Combination Agreement shall be true and correct in all respects as of the date of the Business Combination Agreement and the Effective Time. Certain of the representations and warranties in the section titled “Capitalization” in the Business Combination Agreement shall be true and correct in all respects except for de minimis inaccuracies as of the date of the Business Combination Agreement and as of the Effective Time as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such specified date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, be reasonably expected to result in more than de minimis additional cost, expense or liability to Fisker, Spartan, Merger Sub or any of their respective affiliates. The other representations and warranties of Spartan and Merger Sub contained in the Business Combination Agreement shall be true and correct in all respects (without giving effect to any “materiality,” “Spartan Material Adverse Effect” (as defined below) or similar qualifiers contained in any such representations and warranties) as of the date of the Business Combination Agreement and as of the Effective Time as though made on and as of such date (except to the extent that any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failures of any such representations and warranties to be so true and correct, individually or in the aggregate, would not reasonably be expected to have a Spartan Material Adverse Effect;

 

   

Spartan and Merger Sub shall have performed or complied (i) in all respects with the covenant to take all actions necessary to seek the approval of Spartan’s stockholders to extend the deadline for Spartan to consummate its initial business combination, and (ii) in all material respects with all other agreements and covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Effective Time;

 

   

Spartan shall have delivered to Fisker a customary officer’s certificate, dated the date of the Closing, certifying as to the satisfaction of certain conditions;

 

   

no Spartan Material Adverse Effect shall have occurred between the date of the Business Combination Agreement and the Effective Time;



 

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Spartan shall have delivered a copy of the A&R Registration Rights Agreement duly executed by Spartan and the Spartan stockholders party thereto; and

 

   

Spartan shall have made all necessary and appropriate arrangements with Continental Stock Transfer & Trust Company, acting as trustee, to have all of the funds in the Trust Account disbursed to Spartan immediately prior to the Effective Time, and all such funds released from the Trust Account shall be available for immediate use to Spartan in respect of all or a portion of certain payment obligations set forth in the Business Combination Agreement and the payment of Spartan’s fees and expenses incurred in connection with the Business Combination Agreement and the business combination.

Regulatory Matters

Neither Spartan nor Fisker is aware of any material regulatory approvals or actions that are required for completion of the business combination other than as required under the HSR Act. The parties have filed a premerger notification under the HSR Act. It is presently contemplated that if any additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any such additional approvals or actions will be obtained.

Litigation Relating to the Business Combination

On August 31, 2020, a putative class action lawsuit was filed in the Supreme Court of the State of New York by a purported Spartan stockholder in connection with the business combination: Bailey v. Spartan Energy Acquisition Corp., et al., Index No. 654150/2020 (Sup. Ct. N.Y. Cnty.). The complaint names Spartan and certain current and former members of the Spartan Board as defendants. The complaint alleges, among other things, breach of fiduciary duty claims against the Spartan Board in connection with the business combination. The complaint also alleges that this proxy statement is misleading and/or omits material information concerning the business combination. The complaint generally seeks, among other things, injunctive relief and an award of attorneys’ fees.

Other Agreements

Sponsor Agreement

In connection with the execution of the Business Combination Agreement, on July 10, 2020, our Sponsor entered into a Sponsor Agreement with us pursuant to which our Sponsor will, immediately prior to, and conditioned upon, the Effective Time, automatically and irrevocably surrender and forfeit to us, for no consideration and as a contribution to our capital, 441,176 shares of our Class B Common Stock (the “Sponsor Shares”), whereupon the Sponsor Shares will be canceled.

For more information about the Sponsor Agreement, see the section entitled “Proposal No. 1—The Business Combination Proposal—Related Agreements—Sponsor Agreement.”

A&R Registration Rights Agreement

In connection with the Closing, that certain Registration Rights Agreement dated August 9, 2018 (the “IPO Registration Rights Agreement”) will be amended and restated and Spartan, certain persons and entities holding securities of Spartan prior to the Closing (the “Initial Holders”) and certain persons and entities receiving Class A Common Stock or Class B Common Stock in connection with the business combination (the “New Holders” and together with the Initial Holders, the “Reg Rights Holders”) will enter into that amended and restated IPO Registration Rights Agreement attached as an exhibit to the Business Combination Agreement (the “A&R Registration Rights Agreement”). Pursuant to the A&R Registration Rights Agreement, Spartan will agree that,



 

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within 30 calendar days after the Closing, Spartan will file with the SEC (at Spartan’s sole cost and expense) a registration statement registering the resale of certain securities held by or issuable to the Initial Holders and certain of the New Holders (the “Founders Registration Statement”), and Spartan will use its reasonable best efforts to have the Founders Registration Statement become effective as soon as reasonably practicable after the filing thereof. Additionally, Spartan will agree that, as soon as reasonably practicable after Spartan is eligible to register the Reg Rights Holders’ securities on a registration statement on Form S-3, Spartan will file with the SEC (at Spartan’s sole cost and expense) a registration statement registering the resale of certain securities held by or issuable to the New Holders that were not included on the Founders Registration Statement (the “New Holders Registration Statement”) and Spartan will use its reasonable best efforts to have the New Holders Registration Statement become effective as soon as reasonably practicable after the filing thereof. In certain circumstances, the Reg Rights Holders can demand up to three underwritten offerings and will be entitled to customary piggyback registration rights. The A&R Registration Rights Agreement does not provide for the payment of any cash penalties by Spartan if it fails to satisfy any of its obligations under the A&R Registration Rights Agreement.

For more information about the A&R Registration Rights Agreement, see the section entitled “Proposal No. 1—The Business Combination Proposal—Related Agreements—A&R Registration Rights Agreement.”

Lock-Up Agreements

In connection with the Closing, certain investors in Fisker will enter into agreements (the “Lock-Up Agreements”) pursuant to which they will agree, subject to certain customary exceptions, not to (a) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, any shares of Class A Common Stock or any shares of Class B Common Stock held by them immediately after the Effective Time, including any shares of Class A Common Stock issuable upon conversion of such shares of Class B Common Stock, or any shares of Common Stock issuable upon the exercise of options to purchase shares of Common Stock held by them immediately after the Effective Time (“Lock-Up Shares”), (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of such Lock-Up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or (c) publicly announce any intention to effect any transaction specified in clause (a) or (b) (the actions specified in clauses (a)-(c), collectively, “Transfer”) for 180 days after the Closing Date. Thereafter, until the 18 month anniversary of the Closing Date, subject to certain customary exceptions, each of Henrik Fisker and Dr. Geeta Gupta will also agree not to Transfer more than the lesser of (a) such number of Lock-Up Shares resulting in gross proceeds to him or her of $25,000,000 and (b) 10% of the Lock-Up Shares. Thereafter, until the two year anniversary of the Closing Date, subject to certain customary exceptions, each of Henrik Fisker and Dr. Geeta Gupta will also agree not to Transfer more than the number of Lock-Up Shares that, together with any amounts Transferred pursuant to the immediately preceding sentence, would constitute 80% of the Lock-Up Shares.

For more information about the Lock-Up Agreements, see the section entitled “Proposal No. 1—The Business Combination Proposal—Related Agreements—Lock-Up Agreements.”

Proposed Second Amended and Restated Charter

Pursuant to the terms of the Business Combination Agreement, at the Closing, we will amend and restate, effective as of the Effective Time, our Charter to, among other things, (a) increase the number of authorized shares of our Class A Common Stock from 200,000,000 shares to 750,000,000 shares, (b) increase the number of authorized shares of our Class B Common Stock from 20,000,000 shares to 150,000,000 shares, (c) increase the



 

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number of authorized shares of our Preferred Stock from 1,000,000 shares to 15,000,000 shares, (d) implement a dual class stock structure comprised of Class A Common Stock, which will carry one vote per share, and Class B Common Stock, which will carry 10 votes per share, (e) eliminate certain provisions in the Charter relating to an Initial Business Combination that will no longer be applicable to us following the Closing, (f) change the post-combination company’s name to “Fisker Inc.” and (g) make certain other changes that the Spartan Board deems appropriate for a public operating company.

For more information about the amendments to our Charter, see the sections entitled “Proposal No. 2—The Authorized Share Charter Proposal,” “Proposal No. 3—The Dual Class Charter Proposal” and “Proposal No. 4—The Additional Charter Proposal.”

PIPE Financing

In connection with the execution of the Business Combination Agreement, on July 10, 2020, we entered into separate subscription agreements (collectively, the “Subscription Agreements”) with a number of investors (collectively, the “Subscribers”), pursuant to which the Subscribers agreed to purchase, and we agreed to sell to the Subscribers, an aggregate of 50,000,000 PIPE Shares for a purchase price of $10.00 per share and an aggregate purchase price of $500,000,000, in a private placement.

The closing of the sale of the PIPE Shares pursuant to the Subscription Agreements is contingent upon, among other customary closing conditions, the concurrent consummation of the business combination. The purpose of the PIPE Financing is to raise additional capital for use by the combined company following the Closing.

Pursuant to the Subscription Agreements, we agreed that, within 30 calendar days after the consummation of the business combination, we will file with the SEC (at our sole cost and expense) a registration statement registering the resale of the PIPE Shares (the “PIPE Resale Registration Statement”), and we will use our commercially reasonable efforts to have the PIPE Resale Registration Statement declared effective as soon as practicable after the filing thereof.

For more information about the Subscription Agreements, see the section entitled “Proposal No. 1—The Business Combination Proposal—Related Agreements—PIPE Financing.”

Interests of Certain Persons in the Business Combination

In considering the recommendation of the Spartan Board to vote in favor of the business combination, stockholders should be aware that, aside from their interests as stockholders, our Sponsor and certain of our directors and officers have interests in the business combination that are different from, or in addition to, those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the business combination, and in recommending to stockholders that they approve the business combination. Stockholders should take these interests into account in deciding whether to approve the business combination. These interests include, among other things:

 

   

the fact that our Sponsor holds 9,360,000 private placement warrants that would expire worthless if a business combination is not consummated;

 

   

the fact that our Sponsor, officers and directors have agreed not to redeem any of the shares of our common stock held by them in connection with a stockholder vote to approve the business combination;

 

   

the fact that our Sponsor paid an aggregate of $25,000 for the Founder Shares, including 412,500 Founder Shares which were subsequently transferred to our independent directors and John J. MacWilliams, a non-independent member of the Spartan Board, and that such securities will have a



 

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significantly higher value at the time of the business combination, which if unrestricted and freely tradable would be valued at approximately $207.7 million, based on the closing price of our Class A Common Stock of $15.05 per share on October 1, 2020;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an Initial Business Combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser amount per public share as is in the Trust Account on the liquidation date, by the claims of (a) any third party (other than our independent public accountants) for services rendered or products sold to us or (b) a prospective target business with which we have entered into a letter of intent, confidentiality or other similar agreement or business combination agreement, but only if such a third party or target business has not executed a waiver of all rights to seek access to the Trust Account;

 

   

the fact that our independent directors and John J. MacWilliams, a non-independent member of the Spartan Board, own an aggregate of 412,500 Founder Shares that were transferred from our Sponsor, which if unrestricted and freely tradeable would be valued at approximately $6.2 million, based on the closing price of our Class A Common Stock of $15.05 per share on October 1, 2020;

 

   

the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations; and

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us if an Initial Business Combination is not completed.

Reasons for the Approval of the Business Combination

After careful consideration, the Spartan Board recommends that our stockholders vote “FOR” the approval of the Business Combination Proposal.

For a more complete description of our reasons for the approval of the business combination and the recommendation of the Spartan Board, see the section entitled “Proposal No. 1—The Business Combination Proposal—Spartan Board’s Reasons for the Approval of the Business Combination.”

Redemption Rights

Under our Charter, holders of our Class A Common Stock may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the business combination, including interest not previously released to us to pay our franchise and income taxes, by (b) the total number of shares of Class A Common Stock issued in the IPO; provided that we will not redeem any public shares to the extent that such redemption would result in Spartan having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. As of June 30, 2020, this would have amounted to approximately $10.32 per share. Under our Charter, in connection with an Initial Business Combination, a public stockholder, together with any affiliate or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Exchange Act), is restricted from seeking redemption rights with respect to more than 20% of the public shares.

If a holder exercises its redemption rights, then such holder will be exchanging its shares of Class A Common Stock for cash and will no longer own shares of Class A Common Stock and will not participate in our future growth, if any. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our transfer agent in



 

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accordance with the procedures described herein. See the section entitled “Special Meeting of Spartan Stockholders—Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

Ownership of New Fisker After the Closing

We anticipate that, upon completion of the business combination, the ownership of New Fisker will be as follows:

 

   

the Historical Rollover Stockholders other than Henrik Fisker and Dr. Geeta Gupta will own 29,905,443 shares of our Class A Common Stock, which will constitute 10.2% of our outstanding Common Stock;

 

   

Henrik Fisker and Dr. Geeta Gupta will own 16,413,516 shares of our Class A Common Stock, assuming they do not convert any of their Class B Common Stock, which will constitute 5.6% of our outstanding Common Stock (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta);

 

   

the public stockholders will own 55,192,542 shares of our Class A Common Stock (assuming no further redemptions), which will constitute 18.8% of our outstanding Common Stock;

 

   

the New PIPE Investors will own 50,000,000 shares of our Class A Common Stock, which will constitute 17.0% of our outstanding Common Stock;

 

   

the initial stockholders will own 13,358,824 shares of our Class A Common Stock, which will constitute 4.5% of our outstanding Common Stock; and

 

   

Henrik Fisker and Dr. Geeta Gupta will own 129,122,242 shares of our Class B Common Stock, or 100% of our outstanding Class B Common Stock, assuming that the Class B Common Stock is not converted to Class A Common Stock to Class A Common Stock, such that as of immediately following the completion of the business combination, taking into account all of their Class A Common Stock and Class B Common Stock, Henrik Fisker and Dr. Geeta Gupta will collectively have approximately 89.8% of the voting power of the capital stock of New Fisker on a fully-diluted basis.

Unless otherwise specified, the number of shares and the interests set forth above assume that (a) no public stockholders elect to have their public shares redeemed, (b) 50,000,000 shares of Class A Common Stock are issued in the PIPE Financing, (c) 46,318,959 shares of Class A Common Stock are issued to the Historical Rollover Stockholders in the business combination (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta), (d) all pre-merger Fisker Options have vested and been exercised prior to the merger, (e) none of Spartan’s initial stockholders or the Historical Rollover Stockholders purchase shares of Class A Common Stock in the open market, (f) 129,122,242 shares of our Class B Common Stock are issued to Henrik Fisker and Dr. Geeta Gupta in the business combination, (g) the automatic conversion of all outstanding shares of Fisker Class B Common Stock into shares of Fisker Class A Common Stock on a one-for-one basis, as if such conversion had occurred immediately prior to the completion of the business combination, (h) there are no other issuances of equity interests of New Fisker, and (i) no additional Closing Cash of Fisker upon the Closing (which otherwise will increase the number of shares of Class A Common Stock and Class B Common Stock issuable to Historical Rollover Stockholders). As a result of the business combination, the economic and voting interests of our public stockholders will decrease.

The ownership percentages with respect to New Fisker set forth above do not take into account warrants to purchase Class A Common Stock that will remain outstanding immediately following the business combination, but do include the Founder Shares which will convert into Class A Common Stock upon an Initial Business



 

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Combination. If the facts are different than these assumptions, the percentage ownership retained by Spartan’s existing stockholders in New Fisker following the business combination will be different. For example, if we assume that all outstanding 18,400,000 public warrants and 9,360,000 private placement warrants were exercisable and exercised following completion of the business combination and further assume that no public stockholders elect to have their public shares redeemed, then the ownership of New Fisker would be as follows:

 

   

the Historical Rollover Stockholders other than Henrik Fisker and Dr. Geeta Gupta will own 29,905,443 shares of our Class A Common Stock, which will constitute 9.3% of our outstanding Common Stock;

 

   

Henrik Fisker and Dr. Geeta Gupta will own 16,413,516 shares of our Class A Common Stock, assuming they do not convert any of their Class B Common Stock to Class A Common Stock, which will constitute 5.1% of our outstanding Common Stock (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta);

 

   

the public stockholders will own 73,600,000 shares of our Class A Common Stock, which will constitute 22.9% of our outstanding Common Stock;

 

   

the New PIPE Investors will own 50,000,000 shares of our Class A Common Stock, which will constitute 15.5% of our outstanding Common Stock;

 

   

the initial stockholders will own 22,718,824 shares of our Class A Common Stock, which will constitute 7.1% of our outstanding Common Stock; and

 

   

Henrik Fisker and Dr. Geeta Gupta will own 129,122,242 shares of our Class B Common Stock, or 100% of our outstanding Class B Common Stock, assuming that the Class B Common Stock is not converted to Class A Common Stock, such that as of immediately following the completion of the business combination, taking into account all of their Class A Common Stock and Class B Common Stock, Henrik Fisker and Dr. Geeta Gupta will collectively have approximately 88.1% of the voting power of the capital stock of New Fisker on a fully-diluted basis.

The public warrants and private placement warrants will become exercisable 30 days after the completion of an Initial Business Combination and will expire five years after the completion of an Initial Business Combination or earlier upon their redemption or liquidation.

Please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

Board of Directors of New Fisker Following the Business Combination

Assuming the Director Election Proposal is approved at the special meeting, we expect the New Fisker board of directors (the “New Fisker Board”) to be comprised of Henrik Fisker, Dr. Geeta Gupta, Wendy J. Greuel, Mark E. Hickson, William R. McDermott, Roderick K. Randall and Nadine I. Watt.

Accounting Treatment

’The business combination is intended to be accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States (“GAAP”). Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. Accordingly, the business combination will be treated as the equivalent of Fisker issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the business combination will be those of Fisker.



 

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Appraisal Rights

Appraisal rights are not available to holders of shares of Class A Common Stock and Class B Common Stock in connection with the business combination.

Other Proposals

In addition to the proposal to approve and adopt the Business Combination Agreement and the business combination, our stockholders will be asked to vote on proposals to amend and restate our Charter to, among other things, (a) increase the number of authorized shares of our Class A Common Stock from 200,000,000 shares to 750,000,000 shares, (b) increase the number of authorized shares of our Class B Common Stock from 20,000,000 shares to 150,000,000 shares, (c) increase the number of authorized shares of our Preferred Stock from 1,000,000 shares to 15,000,000 shares, (d) implement a dual class stock structure comprised of Class A Common Stock, which will carry one vote per share, and Class B Common Stock, which will carry 10 votes per share, (e) eliminate certain provisions in the Charter relating to an Initial Business Combination that will no longer be applicable to us following the Closing, (f) change the post-combination company’s name to “Fisker Inc.” and (g) make certain other changes that the Spartan Board deems appropriate for a public operating company. A copy of our Proposed Second A&R Charter reflecting the proposed amendments pursuant to the Authorized Share Charter Proposal, the Dual Class Charter Proposal and the Additional Charter Proposal is attached to this proxy statement as Annex B. For more information about the Authorized Share Charter Proposal, the Dual Class Charter Proposal and the Additional Charter Proposal, see the sections entitled “Proposal No. 2—The Authorized Share Charter Proposal,” “Proposal No. 3—The Dual Class Charter Proposal” and “Proposal No. 4—The Additional Charter Proposal.”

In addition, our stockholders will be asked to vote on (a) a proposal to approve, for purposes of complying with applicable NYSE listing rules, (i) the issuance, or reservation for issuance in respect of New Fisker options issued in exchange for outstanding pre-merger Fisker Options, of 46,318,959 shares of Class A Common Stock (including 918,637 shares of Class A Common Stock issued to HF Holdco and 15,494,879 shares of Class A Common Stock underlying options to purchase Class A Common Stock held by Henrik Fisker and Dr. Geeta Gupta) and 129,122,242 shares of Class B Common Stock to the Historical Rollover Stockholders in the business combination and (ii) the issuance and sale of 50,000,000 shares of Class A Common Stock in the PIPE Financing, (b) a proposal to approve and adopt the 2020 Plan, (c) a proposal to approve and adopt the ESPP, (d) a proposal to elect two directors to serve until the 2021 annual meeting of stockholders, three directors to serve until the 2022 annual meeting of stockholders and two directors to serve until the 2023 annual meeting of stockholders, and until their respective successors are duly elected and qualified, subject to such directors’ earlier death, resignation, retirement, disqualification or removal and (d) a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposals, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal or the Director Election Proposal.

See the sections entitled “Proposal No. 5—The NYSE Proposal,” “Proposal No. 6—The 2020 Plan Proposal,” “Proposal No. 7—ESPP Proposal,” “Proposal No. 8—The Director Election Proposal” and “Proposal No. 9—The Adjournment Proposal” for more information.

Date, Time and Place of Special Meeting

The special meeting will be held at 11:00 a.m., Eastern time, on October 28, 2020, via live webcast at the following address: https://www.cstproxy.com/spartanenergy/sm2020, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.



 

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Voting Power; Record Date

You will be entitled to vote or direct votes to be cast at the virtual special meeting if you owned shares of Class A Common Stock or Class B Common Stock at the close of business on October 1, 2020, which is the record date for the special meeting. You are entitled to one vote for each share of Class A Common Stock or Class B Common Stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 69,000,000 shares of Class A Common Stock and Class B Common Stock outstanding in the aggregate, of which 55,200,000 were public shares and 13,800,000 were Founder Shares held by the initial stockholders.

Proxy Solicitation

Proxies may be solicited by mail. We have engaged Morrow Sodali LLC to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares online if it revokes its proxy before the special meeting. A stockholder may also change its vote by submitting a later-dated proxy as described in the section entitled “Special Meeting of Spartan Stockholders—Revoking Your Proxy.”

Quorum and Required Vote for Proposals for the Special Meeting

A quorum of our stockholders is necessary to hold a valid meeting. A quorum will be present at the special meeting if holders of a majority of the outstanding shares of our Class A Common Stock and Class B Common Stock entitled to vote thereat attend virtually or are represented by proxy at the special meeting. Abstentions will count as present for the purposes of establishing a quorum.

The approval of the Business Combination Proposal, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal and the Adjournment Proposal requires the affirmative vote (online or by proxy) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock entitled to vote and actually cast thereon online at the special meeting, voting as a single class. Approval of the Charter Proposals requires the affirmative vote (online or by proxy) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock entitled to vote thereon at the special meeting, voting as a single class. Accordingly, a stockholder’s failure to vote by proxy or to vote online at the special meeting will not be counted towards the number of shares of Class A Common Stock and Class B Common Stock required to validly establish a quorum, and if a valid quorum is otherwise established, it will have no effect on the outcome of any vote on the Business Combination Proposal, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal or the Adjournment Proposal, but will have the same effect as a vote AGAINST the Charter Proposals.

Approval of the election of each director nominee pursuant to the Director Election Proposal requires the affirmative vote (online or by proxy) of a plurality of the votes cast by holders of our Class A Common Stock and Class B Common Stock entitled to vote and actually cast thereon at the special meeting. This means that the seven director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions will have no effect on the Director Election Proposal.

The Closing is conditioned on the approval of the Business Combination Proposal, the Charter Proposals and the NYSE Proposal at the special meeting. The Charter Proposals, the Director Election Proposal and the 2020 Plan Proposal, the ESPP Proposal are conditioned on the approval of the Business Combination Proposal and the NYSE Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement.



 

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Recommendation to Spartan Stockholders

The Spartan Board believes that each of the Business Combination Proposal, the Authorized Share Charter Proposal, the Dual Class Charter Proposal, the Additional Charter Proposal, the NYSE Proposal, the 2020 Plan Proposal, the ESPP Proposal, the Director Election Proposal and the Adjournment Proposal is in the best interests of Spartan and our stockholders and recommends that our stockholders vote “FOR” each Proposal (or in the case of the Director Election Proposal, “FOR ALL NOMINEES”) being submitted to a vote of the stockholders at the special meeting.

When you consider the recommendation of the Spartan Board in favor of approval of these Proposals, you should keep in mind that, aside from their interests as stockholders, our Sponsor and certain of our directors and officers have interests in the business combination that are different from, or in addition to, your interests as a stockholder. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination.”

Risk Factors

In evaluating the proposals set forth in this proxy statement, you should carefully read this proxy statement, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors.”

Controlled Company Exception

Following the completion of the business combination, Henrik Fisker and Dr. Geeta Gupta will control a majority of the voting power of our outstanding capital stock. As a result, New Fisker will be a “controlled company” under NYSE rules. As a controlled company, New Fisker will be exempt from certain NYSE corporate governance requirements, including those that would otherwise require New Fisker’s board of directors to have a majority of independent directors and require that New Fisker either establish compensation and nominating and corporate governance committees, each comprised entirely of independent directors, or otherwise ensure that the compensation of our executive officers and nominees for directors are determined or recommended to the board of directors by the independent members of the board of directors. While New Fisker does not currently intend to rely on any of these exemptions, it will be entitled to do so for as long as New Fisker will be considered a “controlled company,” and to the extent it relies on one or more of these exemptions, holders of New Fisker capital stock will not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.



 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF SPARTAN

The selected historical statements of operations data of Spartan for the years ended December 31, 2019 and 2018 and the historical balance sheet data as of December 31, 2019 and 2018 are derived from Spartan’s audited financial statements included elsewhere in this proxy statement. The selected historical condensed statements of operations data of Spartan for the six months ended June 30, 2020 and 2019 and the condensed balance sheet data as of June 30, 2020 are derived from Spartan’s unaudited interim condensed financial statements included elsewhere in this proxy statement. In Spartan management’s opinion, the unaudited interim condensed financial statements include all adjustments necessary to state fairly Spartan’s financial position as of June 30, 2020 and the results of operations for the six months ended June 30, 2020 and 2019.

Spartan’s historical results are not necessarily indicative of the results that may be expected in the future and Spartan’s results for the six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2020 or any other period. The information below is only a summary and should be read in conjunction with the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Spartan” and “Information About Spartan” and the financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement.

 

Statement of Operations Data    For the Six
months Ended
June 30,
2020
    For the Six
months Ended
June 30,
2019
    For the
Year ended
December 31,
2019
    For the
Year ended
December 31,
2018
 
     (in actual dollars and shares)  

Revenue

   $ —       $ —       $ —       $ —    

Expenses

      

Administrative fee—related party

     60,000       60,000       120,000       40,000  

General and administrative expenses

     958,001       595,909       1,132,661       811,091  

Other Income

      

Investment income from Trust Account

     4,479,826       6,780,233       12,654,638       4,375,763  

Interest income

     2,376       14,258       22,557       6,947  

Income tax provision

     (919,821     (1,403,022     (2,615,474     (878,369
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 2,544,380     $ 4,735,560     $ 8,809,060     $ 2,653,250  

Weighted average shares outstanding of Class A common stock

     55,200,000       55,200,000       55,200,000       55,200,000  

Basic and diluted net income per share, Class A

   $ 0.06     $ 0.10     $ 0.18     $ 0.06  

Weighted average shares outstanding of Class B common stock

     13,800,000       13,800,000       13,800,000       13,800,000  

Basic and diluted net loss per share, Class B

   $ (0.07   $ (0.04   $ (0.07   $ (0.05

 

Balance Sheet Data    June 30, 2020      December 31, 2019      December 31, 2018  

Total assets

   $ 569,988,185      $ 565,975,181      $ 557,475,687  

Total liabilities

     21,104,625        19,636,001        19,945,567  

Value of Class A Common Stock that may be redeemed in connection with an initial business combination

     543,883,550        541,339,170        532,530,110  

Total stockholders’ equity

     5,000,010        5,000,010        5,000,010  


 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA OF FISKER

The selected historical consolidated statements of operations data of Fisker for the years ended December 31, 2019 and 2018 and the historical consolidated balance sheet data as of December 31, 2019 and 2018 are derived from Fisker’s audited consolidated financial statements included elsewhere in this proxy statement. The selected historical condensed consolidated statements of operations data of Fisker for the six months ended June 30, 2020 and 2019 and the condensed consolidated balance sheet data as of June 30, 2020 are derived from Fisker’s unaudited interim condensed consolidated financial statements included elsewhere in this proxy statement. In Fisker management’s opinion, the unaudited interim condensed consolidated financial statements include all adjustments necessary to state fairly Fisker’s financial position as of June 30, 2020 and the results of operations for the six months ended June 30, 2020 and 2019. Fisker’s historical results are not necessarily indicative of the results that may be expected in the future and Fisker’s results for the six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2020 or any other period. You should read the following selected historical consolidated financial data together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Fisker” and Fisker’s consolidated financial statements and related notes included elsewhere in this proxy statement.

 

Statement of Operations Data    For The Six
months Ended
June 30, 2020
    For The Six
months Ended
June 30, 2019
    For The Year
Ended December

31, 2019
    For The Year
Ended December

31, 2018
 
     (in actual dollars and shares)  

Revenue

   $ —       $ —       $ —       $ —    

General and administrative

     1,535,005       2,016,886       3,625,833       1,475,613  

Research and development

     560,340       1,908,363       6,961,981       1,938,871  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (2,095,345     (3,925,249     (10,587,814     (3,414,484

Other income (expense):

        

Other income (expense)

     8,125       —         575       (21,000

Interest income

     5,357       5,671       8,503       7,427  

Interest expense

     (561,648     (579     (177,997     (1,590

Change in fair value of embedded derivative

     (260,114     —         (79,751      

Foreign currency gain (loss)

     (37,328     (7,293     (42,266     (1,298
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Loss

   $ (2,940,953   $ (3,927,450   $ (10,878,750   $ (3,430,945
  

 

 

   

 

 

   

 

 

   

 

 

 

Deemed dividend attributable to preferred stock

     —         —         —         (1,222,368
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common shareholders

   $ (2,940,953   $ (3,927,450   $ (10,878,750   $ (4,653,313
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding of Class A common stock

     82,738       45,560       57,139       20,040  

Weighted average shares outstanding of Class B common stock

     38,727,340       38,727,340       38,727,340       38,727,340  

Net loss per share attributable to Class A and Class B Common shareholders- Basic and Diluted

   $ (0.08   $ (0.10   $ (0.28   $ (0.12
  

 

 

   

 

 

   

 

 

   

 

 

 

 

Balance Sheet Data      June 30, 2020        December 31, 2019        December 31, 2018  

Total assets

   $ 3,781,215      $ 2,076,427      $ 5,651,302  

Total liabilities

     12,751,922        8,198,823        987,749  

Total temporary equity

     11,020,683        11,020,683        11,020,683  

Total stockholders’ deficit

     (19,991,390      (17,143,079      (6,357,130


 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. All statements, other than statements of present or historical fact included in this proxy statement, regarding the proposed business combination, Spartan’s ability to consummate the business combination, the benefits of the transaction, the post-combination company’s future financial performance following the business combination and the post-combination company’s strategy, expansion plans, future operations, future operating results, estimated revenues, losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “project” or the negative of such terms or other similar expressions. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Except as otherwise required by applicable law, Spartan disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this proxy statement. Spartan cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Spartan.

In addition, Spartan cautions you that the forward-looking statements regarding Spartan and the post-combination company, which are contained in this proxy statement, are subject to the following factors:

 

   

the occurrence of any event, change or other circumstances that could delay the business combination or give rise to the termination of the Business Combination Agreement;

 

   

the outcome of any legal proceedings that may be instituted against Spartan following announcement of the business combination;

 

   

the inability to complete the business combination due to the failure to obtain approval of the stockholders of Spartan, or satisfy the other conditions to closing in the Business Combination Agreement;

 

   

the risk that Spartan may not be able to obtain the financing necessary to consummate the business combination;

 

   

the risk that the proposed business combination disrupts current plans and operations of Fisker or Spartan as a result of the announcement and consummation of the business combination;

 

   

Fisker’s ability to enter into binding contracts with OEMs or tier-one suppliers in order to execute on its business plan;

 

   

New Fisker’s ability to realize the anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability of New Fisker to grow and manage growth profitably following the business combination;

 

   

Spartan’s ability to realize the anticipated benefits of the business combination, which may be affected by, among other things, competition and the ability of Spartan to grow and manage growth profitably following the business combination;

 

   

costs related to the business combination;

 

   

Spartan’s success in retaining or recruiting, or changes required in, its officers, key employees or directors following the business combination;

 

   

the possibility of third-party claims against Spartan’s Trust Account;

 

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changes in applicable laws or regulations;

 

   

the ability of Fisker to execute its business model, including market acceptance of its planned products and services;

 

   

that Fisker has identified a material weakness in its internal control over financial reporting which, if not corrected, could affect the reliability of Fisker’s consolidated financial statements;

 

   

the possibility that the novel coronavirus pandemic (“COVID-19”) may hinder Spartan’s ability to consummate the business combination;

 

   

the possibility that COVID-19 may adversely affect the results of operations, financial position and cash flows of Spartan or the post-combination company; and

 

   

the possibility that Spartan or the post-combination company may be adversely affected by other economic, business or competitive factors.

Should one or more of the risks or uncertainties described in this proxy statement, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact the operations and projections discussed herein can be found in the section entitled “Risk Factors” and in Spartan’s periodic filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and the subsequent Quarterly Reports on Form 10-Q. Spartan’s SEC filings are available publicly on the SEC’s website at www.sec.gov.

 

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RISK FACTORS

The following risk factors will apply to our business and operations following the completion of the business combination. These risk factors are not exhaustive, and investors are encouraged to perform their own investigation with respect to the business, financial condition and prospects of Fisker and our business, financial condition and prospects following the completion of the business combination. You should carefully consider the following risk factors in addition to the other information included in this proxy statement, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business or financial condition. The following discussion should be read in conjunction with the financial statements of Fisker and notes to the financial statements included herein.

Risks Related to Fisker

Fisker’s ability to develop, manufacture and obtain required regulatory approvals for a car of sufficient quality and appeal to customers on schedule and on a large scale is unproven.

Fisker’s business depends in large part on its ability to develop, manufacture, market and sell or lease its electric vehicles. Initially, Fisker plans to manufacture vehicles in collaboration with one or more automotive component and engineering services suppliers, including large original equipment manufacturers (OEMs) or tier-one automotive suppliers. Fisker has not yet executed definitive supply or manufacturing agreements with any OEM or tier-one automotive supplier for the supply of parts for production of the Fisker Ocean, or any of its other future vehicle offerings. If Fisker is unable to negotiate and finalize such supply and manufacturing agreements with an OEM or a tier-one automotive supplier, it will not be able to produce any vehicles and will not be able to generate any revenue, or the vehicles may become more expensive to deliver with a higher bill of materials, which would have a material adverse effect on its business, prospects, operating results and financial condition.

The continued development and the ability to start manufacturing Fisker vehicles, including the Fisker Ocean, are and will be subject to risks, including with respect to:

 

   

Fisker’s ability to secure necessary funding;

 

   

Fisker’s ability to negotiate and execute definitive agreements with its various suppliers for hardware, software, or services necessary to engineer or manufacture its vehicles;

 

   

Fisker’s ability to accurately manufacture vehicles within specified design tolerances;

 

   

obtaining required regulatory approvals and certifications;

 

   

compliance with environmental, safety, and similar regulations;

 

   

securing necessary components, services, or licenses on acceptable terms and in a timely manner;

 

   

delays by Fisker in delivering final component designs to its suppliers;

 

   

Fisker’s ability to attract, recruit, hire, retain and train skilled employees;

 

   

quality controls that prove to be ineffective or inefficient;

 

   

delays or disruptions in Fisker’s supply chain including raw material supplies;

 

   

Fisker’s ability to maintain arrangements on reasonable terms with its manufacturing partners and suppliers, engineering service providers, delivery partners, and after sales service providers; and

 

   

other delays, backlog in manufacturing and research and development of new models, and cost overruns.

Fisker’s ability to develop, manufacture and obtain required regulatory approvals for a vehicle of sufficient quality and appeal to customers on schedule and on a large scale is unproven, and the business plan is still

 

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evolving. Fisker may be required to introduce new vehicle models and enhanced versions of existing models. To date, Fisker has limited experience, as a company, designing, testing, manufacturing, marketing and selling or leasing its electric vehicles and therefore cannot assure you that it will be able to meet customer expectations. Any failure to develop such manufacturing processes and capabilities within Fisker’s projected costs and timelines would have a material adverse effect on its business, prospects, operating results and financial condition.

Fisker is substantially reliant on its relationships with OEMs, suppliers and service providers for the parts and components in its vehicles, as well as for the manufacture of its initial vehicles. If any of these OEMs, suppliers or service partners choose to not do business with Fisker, then Fisker would have significant difficulty in procuring and producing its vehicles and its business prospects would be significantly harmed.

Fisker has entered into a number of non-binding agreements with third parties in order to implement its asset-light business model and will need to enter into definitive agreements with one or more OEMs and suppliers in order to produce the Fisker Ocean and other vehicles in a manner contemplated by its business plan. Furthermore, Fisker has explored and intends to secure alternative suppliers and providers for many of the most material aspects of its business model.

Collaboration with third parties for the manufacturing of vehicles is subject to risks with respect to operations that are outside Fisker’s control. Fisker could experience delays to the extent its current or future partners do not continue doing business with Fisker, meet agreed upon timelines, experience capacity constraints or otherwise are unable to deliver components or manufacture vehicles as expected. There is risk of potential disputes with partners, and Fisker could be affected by adverse publicity related to its partners whether or not such publicity is related to their collaboration with Fisker. Fisker’s ability to successfully build a premium brand could also be adversely affected by perceptions about the quality of Fisker’s partners’ vehicles or other vehicles manufactured by the same partner. In addition, although Fisker intends to be involved in material decisions in the supply chain and manufacturing process, given that Fisker also relies on its partners to meet its quality standards, there can be no assurance that Fisker will be able to maintain high quality standards.

Fisker may in the future enter into strategic alliances, including joint ventures or minority equity investments, with various third parties to further its business purpose. These alliances could subject Fisker to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party, and increased expenses in establishing new strategic alliances, any of which may materially and adversely affect Fisker’s business.

To sell or lease Fisker vehicles as currently contemplated, Fisker will need to enter into certain additional agreements and arrangements that are not currently in place. These include entering into definitive agreements with third party service partners for fleet management, vehicle storage, dockside collection, mobile fleet servicing, financing and end of lease collections. If Fisker is unable to enter into such definitive agreements, or is only able to do so on terms that are unfavorable to Fisker, it may have a material adverse effect on its business, prospects, operating results and financial condition.

Fisker’s relationship with one or more OEMs and automotive suppliers is integral to its platform procurement and manufacturing plan, but Fisker does not have any binding commitments from an OEM or automotive supplier to participate in a platform sharing arrangement or manufacturing activities and it may not be able to obtain such commitments. Fisker therefore is seeking alternative arrangements with a number of OEMs, component suppliers, and manufacturers, which it may not be successful in obtaining.

To manufacture Fisker’s vehicles as currently contemplated, Fisker will need to enter into definitive agreements and arrangements that are not currently in place. Although Fisker has a historic working relationship with VW to source the Modularer E-Antriebs-Baukasten (“MEB”) platform, including the Fisker Ocean

 

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prototype built on the MEB platform by IDG, Fisker does not have a definitive agreement with VW or any other OEM to use a platform and commercially manufacture its vehicles, and as a result, Fisker may not be able to implement its business strategy in the timeframe anticipated, or at all. If Fisker is unable to enter into definitive agreements or is only able to do so on terms that are unfavorable to Fisker, it may not be able to timely identify adequate strategic relationship opportunities, or form strategic relationships, and consequently, Fisker may not be able to fully carry out its business plans. Accordingly, investors should not place undue reliance on Fisker’s statements about its production plans or their feasibility in the timeframe anticipated, or at all.

If Fisker is unable to contract with OEMs or suppliers on platform sharing and manufacturing of its vehicles, Fisker would need to develop its own platform and manufacturing facilities, which may not be feasible and, if feasible at all, would significantly increase its capital expenditure and would significantly delay production of its vehicles.

Fisker may be unable to enter into agreements with OEMs and suppliers for platform sharing and manufacturing on terms and conditions acceptable to Fisker and therefore may need to contract with other third parties or establish its own production capacity. There can be no assurance that in such event Fisker would be able to partner with other third parties or establish its own production capacity to meet its needs on acceptable terms, or at all. The expense and time required to complete any transition and to assure that vehicles manufactured at facilities of new third-party partners comply with Fisker’s quality standards and regulatory requirements would likely be greater than currently anticipated. If Fisker needs to develop its own manufacturing and production capabilities, which may not be feasible, it would significantly increase Fisker’s capital expenditures and would significantly delay production of Fisker’s vehicles. This may require Fisker to attempt to raise or borrow money, which may not be successful. Also, it may require Fisker to change the anticipated pricing of its vehicles, which would adversely affect Fisker’s margins and cash flows. Any of the foregoing could adversely affect Fisker’s business, results of operations, financial condition and prospects.

Manufacturing in collaboration with partners is subject to risks.

Fisker’s business model relies on outsourced manufacturing of its vehicles. The cost of tooling a manufacturing facility with a collaboration partner is high, but such cost will not be known until Fisker enters into a vehicle manufacturing agreement. Collaboration with third parties to manufacture vehicles is subject to risks that are outside Fisker’s control. Fisker could experience delays if its partners do not meet agreed upon timelines or experience capacity constraints. There is risk of potential disputes with partners, which could stop or slow vehicle production, and Fisker could be affected by adverse publicity related to its partners, whether or not such publicity is related to such third parties’ collaboration with Fisker. Fisker’s ability to successfully build a premium brand could also be adversely affected by perceptions about the quality of its partners’ products. In addition, Fisker cannot guarantee that its suppliers will not deviate from agreed-upon quality standards.

Fisker may be unable to enter into agreements with manufacturers on terms and conditions acceptable to it and therefore it may need to contract with other third parties or significantly add to its own production capacity. Fisker may not be able to engage other third parties or establish or expand its own production capacity to meet its needs on acceptable terms, or at all. The expense and time required to adequately complete any transition may be greater than anticipated. Any of the foregoing could adversely affect its business, results of operations, financial condition and prospects.

There are complex software and technology systems that need to be developed in coordination with vendors and suppliers in order to reach production for Fisker’s electric vehicles, and there can be no assurance such systems will be successfully developed.

Fisker vehicles will use a substantial amount of third-party and in-house software codes and complex hardware to operate. The development of such advanced technologies are inherently complex, and Fisker will

 

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need to coordinate with its vendors and suppliers in order to reach production for its electric vehicles. Defects and errors may be revealed over time and Fisker’s control over the performance of third-party services and systems may be limited. Thus, Fisker’s potential inability to develop the necessary software and technology systems may harm its competitive position.

Fisker is relying on third-party suppliers to develop a number of emerging technologies for use in its products, including lithium ion battery technology. These technologies are not today, and may not ever be, commercially viable. There can be no assurances that Fisker’s suppliers will be able to meet the technological requirements, production timing, and volume requirements to support its business plan. In addition, the technology may not comply with the cost, performance useful life and warranty characteristics Fisker anticipates in its business plan. As a result, Fisker’s business plan could be significantly impacted and Fisker may incur significant liabilities under warranty claims which could adversely affect its business, prospects, and results of operations.

Fisker may experience significant delays in the design, manufacture, regulatory approval, launch and financing of its vehicles, which could harm its business and prospects.

Any delay in the financing, design, manufacture, regulatory approval or launch of Fisker’s vehicles, including entering into agreements for platform sharing, supply of component parts, and manufacturing, could materially damage its brand, business, prospects, financial condition and operating results and could cause liquidity constraints. Vehicle manufacturers often experience delays in the design, manufacture and commercial release of new products. To the extent Fisker delays the launch of its vehicles, its growth prospects could be adversely affected as it may fail to establish or grow its market share. Fisker relies on third-party suppliers for the provision and development of the key components and materials used in its vehicles. To the extent Fisker’s suppliers experience any delays in providing it with or developing necessary components, it could experience delays in delivering on its timelines.

Prior to mass production of the Fisker Ocean, Fisker will need the vehicle to be fully designed and engineered and be approved for sale according to differing requirements, including but not limited to regulatory requirements, in the different geographies Fisker intends to launch its vehicles. If Fisker encounters delays in any of these matters, Fisker may consequently delay its deliveries of the Fisker Ocean.

Fisker is dependent on its suppliers, a significant number of which are single or limited source suppliers, and the inability of these suppliers to deliver necessary components of Fisker’s vehicles in a timely manner and at prices and volumes acceptable to it could have a material adverse effect on its business, prospects and operating results.

While Fisker plans to obtain components from multiple sources whenever possible, many of the components used in its vehicles will be purchased by Fisker from a single source. While Fisker believes that it may be able to establish alternate supply relationships and can obtain or engineer replacement components for its single source components, Fisker may be unable to do so in the short term (or at all) at prices or quality levels that are acceptable to it. In addition, Fisker could experience delays if its suppliers do not meet agreed upon timelines or experience capacity constraints.

Any disruption in the supply of components, whether or not from a single source supplier, could temporarily disrupt production of Fisker’s vehicles until an alternative supplier is able to supply the required material. Changes in business conditions, unforeseen circumstances, governmental changes, and other factors beyond Fisker’s control or which it does not presently anticipate, could also affect its suppliers’ ability to deliver components to Fisker on a timely basis. Any of the foregoing could materially and adversely affect Fisker’s results of operations, financial condition and prospects.

 

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If any of Fisker’s suppliers become economically distressed or go bankrupt, Fisker may be required to provide substantial financial support or take other measures to ensure supplies of components or materials, which could increase its costs, affect its liquidity or cause production disruptions.

Fisker expects to purchase various types of equipment, raw materials and manufactured component parts from its suppliers. If these suppliers experience substantial financial difficulties, cease operations, or otherwise face business disruptions, Fisker may be required to provide substantial financial support to ensure supply continuity or would have to take other measures to ensure components and materials remain available. Any disruption could affect’s Fisker’s ability to deliver vehicles and could increase Fisker’s costs and negatively affect its liquidity and financial performance.

Fisker’s vehicles will make use of lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame.

The battery packs within Fisker’s vehicles will make use of lithium-ion cells. On rare occasions, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion cells. While the battery pack is designed to contain any single cell’s release of energy without spreading to neighboring cells, once Fisker’s vehicles are commercially available, a field or testing failure of battery packs in Fisker’s vehicles could occur, which could result in bodily injury or death and could subject Fisker to lawsuits, product recalls, or redesign efforts, all of which would be time consuming and expensive and could harm Fisker’s brand image. Also, negative public perceptions regarding the suitability of lithium-ion cells for automotive applications, the social and environmental impacts of cobalt mining, or any future incident involving lithium-ion cells, such as a vehicle or other fire, could seriously harm its business and reputation.

Fisker has a limited operating history and faces significant challenges as a new entrant into the automotive industry. Fisker vehicles are in development and Fisker does not expect its first vehicle to be produced until the fourth quarter of 2022, at the earliest, if at all.

Fisker was incorporated in September 2016 and has a short operating history in the automobile industry, which is continuously evolving. Fisker has no experience as an organization in high volume manufacturing of the planned electric vehicles. Fisker cannot assure you that it or its partners will be able to develop efficient, automated, cost-efficient manufacturing capability and processes, and reliable sources of component supplies that will enable Fisker to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully mass market the Fisker Ocean and future vehicles. You should consider Fisker’s business and prospects in light of the risks and significant challenges it faces as a new entrant into its industry, including, among other things, with respect to its ability to:

 

   

design and produce safe, reliable and quality vehicles on an ongoing basis;

 

   

obtain the necessary regulatory approvals in a timely manner;

 

   

build a well-recognized and respected brand;

 

   

establish and expand its customer base;

 

   

successfully market not just Fisker’s vehicles but also its other services, including its Flexee lease and other services it intends to provide;

 

   

properly price its services, including its charging solutions, financing and lease options, and successfully anticipate the take-rate and usage of such services by users;

 

   

successfully service its vehicles after sales and maintain a good flow of spare parts and customer goodwill;

 

   

improve and maintain its operational efficiency;

 

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maintain a reliable, secure, high-performance and scalable technology infrastructure;

 

   

predict its future revenues and appropriately budget for its expenses;

 

   

attract, retain and motivate talented employees;

 

   

anticipate trends that may emerge and affect its business;

 

   

anticipate and adapt to changing market conditions, including technological developments and changes in competitive landscape; and

 

   

navigate an evolving and complex regulatory environment.

If Fisker fails to adequately address any or all of these risks and challenges, its business may be materially and adversely affected.

Fisker is an early stage company with a history of losses, and expects to incur significant expenses and continuing losses for the foreseeable future. There is substantial doubt about its ability to continue as a going concern.

Fisker has incurred a net loss since its inception. Fisker believes that it will continue to incur operating and net losses each quarter until at least the time it begins significant deliveries of its vehicles. Even if Fisker is able to successfully develop and sell or lease its vehicles, there can be no assurance that they will be commercially successful.

Fisker expects the rate at which it will incur losses to be significantly higher in future periods as it, among other things, designs, develops and manufactures its vehicles; builds up inventories of parts and components for its vehicles; increases its sales and marketing activities, including opening new Fisker Experience Centers; develops its distribution infrastructure; and increases its general and administrative functions to support its growing operations. Fisker may find that these efforts are more expensive than it currently anticipates or that these efforts may not result in revenues, which would further increase Fisker’s losses.

Fisker’s independent registered public accounting firm has included an emphasis of matter paragraph regarding Fisker’s ability to continue as a going concern in its opinion on Fisker’s consolidated financial statements as of December 31, 2019, due to insufficient capital for Fisker to fund its operations. Fisker’s consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty and do not reflect the transactions contemplated by the business combination.

Fisker’s EMaaS business model has yet to be tested and any failure to commercialize Fisker’s strategic plans would have an adverse effect on Fisker’s operating results and business, harm its reputation and could result in substantial liabilities that exceed its resources.

Investors should be aware of the difficulties normally encountered by a new enterprise, many of which are beyond Fisker’s control, including substantial risks and expenses while establishing or entering new markets, setting up operations and undertaking marketing activities. The likelihood of Fisker’s success must be considered in light of these risks, expenses, complications, delays, and the competitive environment in which Fisker operates. There is, therefore, nothing at this time upon which to base an assumption that Fisker’s EMaaS business model will prove successful, and Fisker may not be able to generate significant revenue, raise additional capital or operate profitably. Fisker will continue to encounter risks and difficulties frequently experienced by early commercial stage companies, including scaling up Fisker’s infrastructure and headcount, and may encounter unforeseen expenses, difficulties or delays in connection with its growth. In addition, as a result of the capital-intensive nature of Fisker’s business, it can be expected to continue to sustain substantial operating expenses without generating sufficient revenues to cover expenditures. Any investment in Fisker’s company is therefore highly speculative and could result in the loss of your entire investment.

 

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Fisker’s operating and financial results forecast relies in large part upon assumptions and analyses developed by Fisker. If these assumptions or analyses prove to be incorrect, Fisker’s actual operating results may be materially different from its forecasted results.

The projected financial and operating information appearing elsewhere in this proxy statement reflect current estimates of future performance. Whether actual operating and financial results and business developments will be consistent with Fisker’s expectations and assumptions as reflected in its forecast depends on a number of factors, many of which are outside Fisker’s control, including, but not limited to:

 

   

whether Fisker can obtain sufficient capital to sustain and grow its business;

 

   

Fisker’s ability to manage its growth;

 

   

whether Fisker can manage relationships with key suppliers;

 

   

the ability to obtain necessary regulatory approvals;

 

   

demand for Fisker products and services;

 

   

the timing and costs of new and existing marketing and promotional efforts;

 

   

competition, including from established and future competitors;

 

   

Fisker’s ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel;

 

   

the overall strength and stability of domestic and international economies;

 

   

regulatory, legislative and political changes; and

 

   

consumer spending habits.

Unfavorable changes in any of these or other factors, most of which are beyond Fisker’s control, could materially and adversely affect its business, results of operations and financial results.

Fisker may not be able to accurately estimate the supply and demand for its vehicles, which could result in a variety of inefficiencies in its business and hinder its ability to generate revenue. If Fisker fails to accurately predict its manufacturing requirements, it could incur additional costs or experience delays.

It is difficult to predict Fisker’s future revenues and appropriately budget for its expenses, and Fisker may have limited insight into trends that may emerge and affect its business. Fisker will be required to provide forecasts of its demand to its suppliers several months prior to the scheduled delivery of products to its prospective customers. Currently, there is no historical basis for making judgments on the demand for Fisker’s vehicles or its ability to develop, manufacture, and deliver vehicles, or Fisker’s profitability in the future. If Fisker overestimates its requirements, its suppliers may have excess inventory, which indirectly would increase Fisker’s costs. If Fisker underestimates its requirements, its suppliers may have inadequate inventory, which could interrupt manufacturing of its products and result in delays in shipments and revenues. In addition, lead times for materials and components that Fisker’s suppliers order may vary significantly and depend on factors such as the specific supplier, contract terms and demand for each component at a given time. If Fisker fails to order sufficient quantities of product components in a timely manner, the delivery of vehicles to its customers could be delayed, which would harm Fisker’s business, financial condition and operating results.

Fisker could experience cost increases or disruptions in supply of raw materials or other components used in its vehicles. If Fisker is unable to establish an arrangement for the sustainable supply of batteries for its vehicles, its business would be materially and adversely harmed.

Fisker may be unable to adequately control the costs associated with its operations. Fisker expects to incur significant costs related to procuring raw materials required to manufacture and assemble its vehicles. Fisker

 

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expects to use various raw materials in its vehicles including, steel, recycled rubber, recycled polyester, carpeting from fishing nets and bottles recycled from ocean waste. The prices for these raw materials fluctuate depending on factors beyond Fisker’s control. Fisker’s business also depends on the continued supply of battery cells for its vehicles. Fisker is exposed to multiple risks relating to availability and pricing of quality lithium-ion battery cells.

Furthermore, currency fluctuations, tariffs or shortages in petroleum and other economic or political conditions may result in significant increases in freight charges and raw material costs. Substantial increases in the prices for Fisker’s raw materials or components would increase Fisker’s operating costs, and could reduce Fisker’s margins. In addition, a growth in popularity of electric vehicles without a significant expansion in battery cell production capacity could result in shortages, which would result in increased costs in raw materials to Fisker or impact of prospects.

Fisker’s limited operating history makes evaluating its business and future prospects difficult and may increase the risk of your investment.

You must consider the risks and difficulties Fisker faces as an early stage company with a limited operating history. If Fisker does not successfully address these risks, its business, prospects, operating results and financial condition will be materially and adversely harmed. Fisker has a very limited operating history on which investors can base an evaluation of its business, operating results and prospects. It is difficult to predict Fisker’s future revenues and appropriately budget for its expenses, and Fisker has limited insight into trends that may emerge and affect its business. In the event that actual results differ from Fisker’s estimates or Fisker adjusts its estimates in future periods, Fisker’s operating results and financial position could be materially affected. The projected financial information appearing elsewhere in this proxy statement was prepared by management and reflects current estimates of future performance.

If Fisker’s vehicles fail to perform as expected, Fisker’s ability to develop, market, and sell or lease its electric vehicles could be harmed.

Once production commences, Fisker vehicles may contain defects in design and manufacture that may cause them not to perform as expected or that may require repair, recalls, and design changes. Fisker vehicles will use a substantial amount of software code to operate and software products are inherently complex and often contain defects and errors when first introduced. Fisker has a limited frame of reference by which to evaluate the long-term performance of its systems and vehicles. There can be no assurance that Fisker will be able to detect and fix any defects in the vehicles prior to their sale to consumers. If any of Fisker’s vehicles fail to perform as expected, Fisker may need to delay deliveries or initiate product recalls, which could adversely affect Fisker’s brand in its target markets and could adversely affect its business, prospects, and results of operations.

Fisker’s services may not be generally accepted by its users. If Fisker is unable to provide quality customer service, its business and reputation may be materially and adversely affected.

Fisker servicing may primarily be carried out through third parties certified by Fisker. Although such servicing partners may have experience in servicing other vehicles, they will initially have limited experience in servicing Fisker vehicles. There can be no assurance that Fisker service arrangements will adequately address the service requirements of its customers to their satisfaction, or that Fisker and its partners will have sufficient resources to meet these service requirements in a timely manner as the volume of vehicles Fisker deliver increases.

In addition, if Fisker is unable to roll out and establish a widespread service network that complies with applicable laws, user satisfaction could be adversely affected, which in turn could materially and adversely affect Fisker’s reputation and thus its sales, results of operations, and prospects.

 

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The automotive market is highly competitive, and Fisker may not be successful in competing in this industry.

Both the automobile industry generally, and the electric vehicle segment in particular, are highly competitive, and Fisker will be competing for sales with both ICE vehicles and other EVs. Many of Fisker’s current and potential competitors have significantly greater financial, technical, manufacturing, marketing and other resources than Fisker does and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their products, including their electric vehicles. Fisker expects competition for electric vehicles to intensify due to increased demand and a regulatory push for alternative fuel vehicles, continuing globalization, and consolidation in the worldwide automotive industry. Factors affecting competition include product quality and features, innovation and development time, pricing, reliability, safety, fuel economy, customer service, and financing terms. Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in downward price pressure and adversely affect Fisker’s business, financial condition, operating results, and prospects.

The automotive industry and its technology are rapidly evolving and may be subject to unforeseen changes. Developments in alternative technologies, including but not limited to hydrogen, may adversely affect the demand for Fisker’s electric vehicles.

Fisker may be unable to keep up with changes in electric vehicle technology or alternatives to electricity as a fuel source and, as a result, its competitiveness may suffer. Developments in alternative technologies, such as advanced diesel, ethanol, fuel cells, or compressed natural gas, or improvements in the fuel economy of the ICE, may materially and adversely affect Fisker’s business and prospects in ways Fisker does not currently anticipate. Any failure by Fisker to successfully react to changes in existing technologies could materially harm its competitive position and growth prospects.

Reservations for Fisker’s vehicles are cancellable.

Deposits paid to reserve the Fisker Ocean SUVs are cancellable by the customer until the customer enters into a lease or purchase agreement. Because all of Fisker’s reservations are cancellable, it is possible that a significant number of customers who submitted reservations for the Fisker Ocean may not purchase vehicles.

The potentially long wait from the time a reservation is made until the time the vehicle is delivered, and any delays beyond expected wait times, could also impact user decisions on whether to ultimately make a purchase. Any cancellations could harm Fisker’s financial condition, business, prospects, and operating results.

Fisker may be subject to risks associated with autonomous driving technology.

Fisker’s vehicles will be designed with connectivity for future installation of an autonomous hardware suite and Fisker plans to partner with a third-party software provider in the future to implement autonomous capabilities. However, Fisker cannot guarantee that it will be able to identify a third party to provide the necessary hardware and software to enable autonomous capabilities in an acceptable timeframe, on terms satisfactory to it, or at all. Autonomous driving technologies are subject to risks and there have been accidents and fatalities associated with such technologies. The safety of such technologies depends in part on drive interactions, and drivers may not be accustomed to using or adapting to such technologies. To the extent accidents associated with Fisker’s autonomous driving systems occur, Fisker could be subject to liability, negative publicity, government scrutiny, and further regulation. Any of the foregoing could materially and adversely affect Fisker’s results of operations, financial condition, and growth prospects.

 

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Fisker has identified material weaknesses in its internal control over financial reporting which, if not corrected, could affect the reliability of Fisker’s consolidated financial statements and have other adverse consequences.

Fisker has identified material weaknesses in internal control over financial reporting, which relate to: (a) Fisker’s risk assessment process, including as it relates to fraud risks; (b) general segregation of duties, including the review and approval of journal entries; and (c) precision level to ensure accruals were recorded in the correct period.

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its financial statements would not be prevented or detected on a timely basis. These deficiencies could result in additional material misstatements to its consolidated financial statements that could not be prevented or detected on a timely basis.

Fisker’s management has concluded that these material weaknesses in Fisker’s internal control over financial reporting are due to the fact that, prior to the completion of the business combination, Fisker was a private company with limited resources and did not have the necessary business processes and related internal control formally designed and implemented coupled with the appropriate resources with the appropriate level of experience and technical expertise to oversee Fisker’s business processes and controls surrounding risk assessment, segregation of duties and accuracy of accruals.

Fisker’s management is in the process of developing a remediation plan. The material weaknesses will not be considered remediated until management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. Fisker’s management will monitor the effectiveness of Fisker’s remediation plans and will make changes management determines to be appropriate.

If not remediated, these material weaknesses could result in further material misstatements to Fisker’s annual or interim consolidated financial statements that might not be prevented or detected on a timely basis, or in delayed filing of required periodic reports. If Fisker is unable to assert that its internal control over financial reporting is effective, or when required in the future, if New Fisker’s independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of the internal control over financial reporting, investors may lose confidence in the accuracy and completeness of New Fisker’s financial reports, the market price of New Fisker Common Stock could be adversely affected and New Fisker could become subject to litigation or investigations by the NYSE, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Fisker’s future growth is dependent on the demand for, and upon consumers’ willingness to adopt, electric vehicles.

Fisker’s future growth is dependent on the demand for, and upon consumers’ willingness to adopt electric vehicles, and even if electric vehicles become more mainstream, consumers choosing Fisker over other EV manufacturers. Demand for electric vehicles may be affected by factors directly impacting automobile prices or the cost of purchasing and operating automobiles such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations, including tariffs, import regulation and other taxes. Volatility in demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect Fisker’s business, prospects, financial condition, and operating results.

In addition, the demand for Fisker’s vehicles and services will highly depend upon the adoption by consumers of new energy vehicles in general and electric vehicles in particular. The market for new energy vehicles is still rapidly evolving, characterized by rapidly changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards, and changing consumer demands and behaviors.

 

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Other factors that may influence the adoption of alternative fuel vehicles, and specifically electric vehicles, include:

 

   

perceptions about electric vehicle quality, safety, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles, whether or not such vehicles are produced by Fisker or other manufacturers;

 

   

range anxiety;

 

   

the availability of new energy vehicles, including plug-in hybrid electric vehicles;

 

   

the availability of service and charging stations for electric vehicles;

 

   

the environmental consciousness of consumers, and their adoption of EVs;

 

   

perceptions about and the actual cost of alternative fuel; and

 

   

macroeconomic factors.

Any of the factors described above may cause current or potential customers not to purchase electric vehicles in general, and Fisker electric vehicles in particular. If the market for electric vehicles does not develop as Fisker expects or develops more slowly than Fisker expects, its business, prospects, financial condition and operating results will be affected.

The unavailability, reduction or elimination of government and economic incentives could have a material adverse effect on Fisker’s business, prospects, financial condition and operating results.

Any reduction, elimination, or discriminatory application of government subsidies and economic incentives because of policy changes, or the reduced need for such subsidies and incentives due to the perceived success of the electric vehicle or other reasons, may result in the diminished competitiveness of the alternative fuel and electric vehicle industry generally or Fisker’s electric vehicles in particular. This could materially and adversely affect the growth of the alternative fuel automobile markets and Fisker’s business, prospects, financial condition and operating results.

While certain tax credits and other incentives for alternative energy production, alternative fuel and electric vehicles have been available in the past, there is no guarantee these programs will be available in the future. If current tax incentives are not available in the future, Fisker’s financial position could be harmed.

Fisker may not be able to obtain or agree on acceptable terms and conditions for all or a significant portion of the government grants, loans and other incentives for which it may apply. As a result, Fisker’s business and prospects may be adversely affected.

Fisker may apply for federal and state grants, loans and tax incentives under government programs designed to stimulate the economy and support the production of alternative fuel and electric vehicles and related technologies. Fisker anticipates that in the future there will be new opportunities for it to apply for grants, loans and other incentives from the United States, state and foreign governments. Fisker’s ability to obtain funds or incentives from government sources is subject to the availability of funds under applicable government programs and approval of its applications to participate in such programs. The application process for these funds and other incentives will likely be highly competitive. Fisker cannot assure you that it will be successful in obtaining any of these additional grants, loans and other incentives. If Fisker is not successful in obtaining any of these additional incentives and Fisker is unable to find alternative sources of funding to meet its planned capital needs, its business and prospects could be materially adversely affected.

 

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If Fisker fails to manage its future growth effectively, it may not be able to market and sell or lease its vehicles successfully.

Fisker intends to expand its operations significantly, which will require hiring, retaining and training new personnel, controlling expenses, establishing facilities and experience centers, and implementing administrative infrastructure, systems and processes. In addition, because Fisker’s electric vehicles are based on a different technology platform than traditional ICE vehicles, individuals with sufficient training in electric vehicles may not be available to be hired, and Fisker will need to expend significant time and expense training employees it hires. Fisker also requires sufficient talent in additional areas such as software development. Furthermore, as Fisker is a relatively young company, its ability to train and integrate new employees into its operations may not meet the growing demands of its business which may affect its ability to grow. Any failure to effectively manage its growth could materially and adversely affect Fisker’s business, prospects, operating results and financial condition.

Insufficient warranty reserves to cover future warranty claims could materially adversely affect Fisker’s business, prospects, financial condition and operating results.

Once Fisker’s cars are in production, it will need to maintain warranty reserves to cover warranty-related claims. If Fisker’s warranty reserves are inadequate to cover future warranty claims on Fisker’s vehicles, Fisker’s business, prospects, financial condition and operating results could be materially and adversely affected. Fisker may become subject to significant and unexpected warranty expenses. There can be no assurances that then-existing warranty reserves will be sufficient to cover all claims.

Fisker may not succeed in establishing, maintaining and strengthening the Fisker brand, which would materially and adversely affect customer acceptance of its vehicles and components and its business, revenues and prospects.

Fisker’s business and prospects heavily depend on its ability to develop, maintain and strengthen the Fisker brand. If Fisker is not able to establish, maintain and strengthen its brand, it may lose the opportunity to build a critical mass of customers. Fisker’s ability to develop, maintain and strengthen the Fisker brand will depend heavily on the success of its marketing efforts. The automobile industry is intensely competitive, and Fisker may not be successful in building, maintaining and strengthening its brand. Many of Fisker’s current and potential competitors, particularly automobile manufacturers headquartered in the United States, Japan, the European Union and China, have greater name recognition, broader customer relationships and substantially greater marketing resources than Fisker does. If Fisker does not develop and maintain a strong brand, its business, prospects, financial condition and operating results will be materially and adversely impacted.

Fisker’s distribution model is different from the predominant current distribution model for automobile manufacturers, which makes evaluating its business, operating results and future prospects difficult.

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

 

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Fisker may face regulatory limitations on its ability to sell vehicles directly which could materially and adversely affect Fisker’s ability to sell its electric vehicles.

Some states have laws that may be interpreted to impose limitations on this direct-to-consumer sales model. The application of these state laws to Fisker’s operations may be difficult to predict. Laws in some states may limit Fisker’s ability to obtain dealer licenses from state motor vehicle regulators.

In addition, decisions by regulators permitting Fisker to sell vehicles may be challenged by dealer associations and others as to whether such decisions comply with applicable state motor vehicle industry laws. In some states, there have also been regulatory and legislative efforts by dealer associations to propose laws that, if enacted, would prevent Fisker from obtaining dealer licenses in their states given Fisker’s anticipated sales model. A few states have passed legislation that clarifies Fisker’s ability to operate, but at the same time limits the number of dealer licenses Fisker can obtain or dealerships that Fisker can operate.

Internationally, there may be laws in jurisdictions that may restrict Fisker’s sales or other business practices. Even for those jurisdictions Fisker has analyzed, the laws in this area can be complex, difficult to interpret and may change over time. Continued regulatory limitations and other obstacles interfering with Fisker’s ability to sell vehicles directly to consumers could have a negative and material impact on Fisker’s business, prospects, financial condition and results of operations.

Fisker will initially depend on revenue generated from a single model and in the foreseeable future will be significantly dependent on a limited number of models.

Fisker will initially depend on revenue generated from a single vehicle model and in the foreseeable future will be significantly dependent on a limited number of models. Historically, automobile customers have come to expect a variety of vehicle models offered in a manufacturer’s fleet and new and improved vehicle models to be introduced frequently. Given that for the foreseeable future Fisker’s business will depend on a single or limited number of models, to the extent a particular model is not well-received by the market, Fisker’s sales volume, business, prospects, financial condition, and operating results could be materially and adversely affected.

Doing business internationally creates operational and financial risks for Fisker’s business.

Fisker’s business plan includes operations in international markets, including initial manufacturing and supply activities in Europe, initial sales in North America and Europe, and eventual expansion into other international markets. Conducting and launching operations on an international scale requires close coordination of activities across multiple jurisdictions and time zones and consumes significant management resources. If Fisker fails to coordinate and manage these activities effectively, its business, financial condition or results of operations could be adversely affected. International sales entail a variety of risks, including currency exchange fluctuations, challenges in staffing and managing foreign operations, tariffs and other trade barriers, unexpected changes in legislative or regulatory requirements of foreign countries into which Fisker sells its products and services, difficulties in obtaining export licenses or in overcoming other trade barriers, laws and business practices favoring local companies, political and economic instability, difficulties protecting or procuring intellectual property rights, and restrictions resulting in delivery delays and significant taxes or other burdens of complying with a variety of foreign laws.

Fisker is highly dependent on the services of Henrik Fisker, its Chief Executive Officer.

Fisker is highly dependent on the services of Henrik Fisker, its co-founder and Chief Executive Officer, and, together with his wife, its Chief Financial Officer, its largest stockholder. Mr. Fisker is the source of many, if not most, of the ideas and execution driving Fisker. If Mr. Fisker were to discontinue his service to Fisker due to death, disability or any other reason, Fisker would be significantly disadvantaged.

 

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Fisker’s business depends substantially on the continuing efforts of its executive officers, key employees and qualified personnel, and its operations may be severely disrupted if it lost their services.

Fisker’s success depends substantially on the continued efforts of its executive officers, key employees and qualified personnel, and its operations may be severely disrupted if it lost their services. As Fisker builds its brand and becomes more well known, the risk that competitors or other companies may poach its talent increases. The failure to attract, integrate, train, motivate and retain these personnel could seriously harm Fisker’s business and prospects.

Fisker’s business may be adversely affected by labor and union activities.

Although none of Fisker’s employees are currently represented by a labor union, it is common throughout the automobile industry generally for many employees at automobile companies to belong to a union, which can result in higher employee costs and increased risk of work stoppages. Fisker may also directly and indirectly depend upon other companies with unionized work forces, such as parts suppliers and trucking and freight companies, and work stoppages or strikes organized by such unions could have a material adverse impact on Fisker’s business, financial condition or operating results.

Fisker faces risks related to health epidemics, including the recent COVID-19 pandemic, which could have a material adverse effect on its business and results of operations.

Fisker faces various risks related to public health issues, including epidemics, pandemics, and other outbreaks, including the recent pandemic of respiratory illness caused by a novel coronavirus known as COVID-19. The impact of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns, and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity. The spread of COVID-19 has also created a disruption in the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers, and has led to a global decrease in vehicle sales in markets around the world.

The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders, and business shutdowns. For example, employees at Fisker’s headquarters located in Torrance, California, are currently subject to a stay-at-home order from the state government. These measures may adversely impact Fisker’s employees and operations and the operations of its customers, suppliers, vendors and business partners, and may negatively impact its sales and marketing activities. In addition, various aspects of Fisker’s business cannot be conducted remotely. These measures by government authorities may remain in place for a significant period of time and they are likely to continue to adversely affect Fisker’s manufacturing plans, sales and marketing activities, business and results of operations.

The spread of COVID-19 has caused Fisker to modify its business practices (including employee travel, recommending that all non-essential personnel work from home and cancellation or reduction of physical participation in sales activities, meetings, events and conferences), and Fisker may take further actions as may be required by government authorities or that it determines are in the best interests of its employees, customers, suppliers, vendors and business partners. There is no certainty that such actions will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities. If significant portions of Fisker’s workforce are unable to work effectively, including due to illness, quarantines, social distancing, government actions or other restrictions in connection with the COVID-19 pandemic, Fisker’s operations will be impacted.

The extent to which the COVID-19 pandemic impacts Fisker’s business, prospects and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including the duration and spread of the pandemic, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating activities can resume. Even after the COVID-19 pandemic has subsided, Fisker may continue to experience an adverse impact to its business as a result of its global economic impact, including any recession that has occurred or may occur in the future.

 

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Specifically, difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment, or a decline in consumer confidence as a result of the COVID-19 pandemic could have a material adverse effect on the demand for Fisker’s vehicles. Under difficult economic conditions, potential customers may seek to reduce spending by forgoing Fisker’s vehicles for other traditional options or may choose to keep their existing vehicles, and cancel reservations.

There are no comparable recent events that may provide guidance as to the effect of the spread of COVID-19 and a pandemic, and, as a result, the ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain.

Fisker’s business plans require a significant amount of capital. In addition, its future capital needs may require Fisker to sell additional equity or debt securities that may dilute its stockholders or introduce covenants that may restrict its operations or its ability to pay dividends.

Fisker expects its capital expenditures to continue to be significant in the foreseeable future as it expands its business, and that its level of capital expenditures will be significantly affected by user demand for its products and services. The fact that Fisker has a limited operating history means it has limited historical data on the demand for its products and services. As a result, Fisker’s future capital requirements may be uncertain and actual capital requirements may be different from those it currently anticipates. Fisker may need to seek equity or debt financing to finance a portion of its capital expenditures. Such financing might not be available to Fisker in a timely manner or on terms that are acceptable, or at all.

Fisker’s ability to obtain the necessary financing to carry out its business plan is subject to a number of factors, including general market conditions and investor acceptance of Fisker’s EMaaS business model. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to Fisker. If Fisker is unable to raise sufficient funds, it will have to significantly reduce its spending, delay or cancel its planned activities or substantially change its corporate structure. Fisker might not be able to obtain any funding, and it might not have sufficient resources to conduct its business as projected, both of which could mean that Fisker would be forced to curtail or discontinue its operations.

In addition, Fisker’s future capital needs and other business reasons could require it to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity or equity-linked securities could dilute its stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict Fisker’s operations or its ability to pay dividends to its stockholders.

If Fisker cannot raise additional funds when it needs or want them, its operations and prospects could be negatively affected.

Failure of information security and privacy concerns could subject Fisker to penalties, damage its reputation and brand, and harm its business and results of operations.

Fisker expects to face significant challenges with respect to information security and privacy, including the storage, transmission and sharing of confidential information. Fisker will transmit and store confidential and private information of its customers, such as personal information, including names, accounts, user IDs and passwords, and payment or transaction related information.

Fisker has adopted strict information security policies and deployed advanced measures to implement the policies, including, among others, advanced encryption technologies, and plans to continue to deploy additional measurers as Fisker grows. However, advances in technology, an increased level of sophistication and diversity of Fisker’s products and services, an increased level of expertise of hackers, new discoveries in the field of cryptography or others can still result in a compromise or breach of the measures that it uses. If Fisker is unable

 

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to protect its systems, and hence the information stored in its systems, from unauthorized access, use, disclosure, disruption, modification or destruction, such problems or security breaches could cause a loss, give rise to Fisker’s liabilities to the owners of confidential information or even subject it to fines and penalties. In addition, complying with various laws and regulations could cause Fisker to incur substantial costs or require it to change its business practices, including its data practices, in a manner adverse to Fisker’s business.

In addition, Fisker will need to comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the United States, Europe and elsewhere. For example, the European Union adopted the General Data Protection Regulation (“GDPR”), which became effective on May 25, 2018 and the State of California adopted the California Consumer Privacy Act of 2018 (“CCPA”). Both the GDPR and the CCPA impose additional obligations on companies regarding the handling of personal data and provides certain individual privacy rights to persons whose data is stored. Compliance with existing, proposed and recently enacted laws (including implementation of the privacy and process enhancements called for under the GDPR) and regulations can be costly; any failure to comply with these regulatory standards could subject Fisker to legal and reputational risks.

Compliance with any additional laws and regulations could be expensive, and may place restrictions on the conduct of Fisker’s business and the manner in which it interacts with its customers. Any failure to comply with applicable regulations could also result in regulatory enforcement actions against Fisker, and misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against Fisker by governmental entities or others, and damage to its reputation and credibility, and could have a negative impact on revenues and profits.

Significant capital and other resources may be required to protect against information security breaches or to alleviate problems caused by such breaches or to comply with Fisker’s privacy policies or privacy-related legal obligations. The resources required may increase over time as the methods used by hackers and others engaged in online criminal activities are increasingly sophisticated and constantly evolving. Any failure or perceived failure by Fisker to prevent information security breaches or to comply with privacy policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other customer data, could cause Fisker’s customers to lose trust in Fisker and could expose Fisker to legal claims. Any perception by the public that online transactions or the privacy of user information are becoming increasingly unsafe or vulnerable to attacks could inhibit the growth of online retail and other online services generally, which may reduce the number of orders Fisker receives.

Fisker retains certain information about its users and may be subject to various privacy and consumer protection laws.

Fisker intends to use its vehicles’ electronic systems to log information about each vehicle’s use, such as charge time, battery usage, mileage and driving behavior, in order to aid Fisker in vehicle diagnostics, repair and maintenance, as well as to help Fisker customize and optimize the driving and riding experience. Fisker users may object to the use of this data, which may harm its business. Possession and use of Fisker’s users’ driving behavior and data in conducting its business may subject Fisker to legislative and regulatory burdens in the United States and other jurisdictions that could require notification of any data breach, restrict Fisker’s use of such information, and hinder its ability to acquire new customers or market to existing customers. If users allege that Fisker has improperly released or disclosed their personal information, Fisker could face legal claims and reputational damage. Fisker may incur significant expenses to comply with privacy, consumer protection and security standards and protocols imposed by laws, regulations, industry standards or contractual obligations. If third parties improperly obtain and use the personal information of Fisker’s users, Fisker may be required to expend significant resources to resolve these problems.

 

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Any unauthorized control or manipulation of Fisker’s vehicles’ systems could result in loss of confidence in Fisker and its vehicles and harm its business.

Fisker’s vehicles will contain complex information technology systems. For example, Fisker’s vehicles will be outfitted with built-in data connectivity to accept and install periodic remote updates from Fisker to improve or update the functionality of its vehicles. Fisker has designed, implemented and tested security measures intended to prevent cybersecurity breaches or unauthorized access to its information technology networks, its vehicles and their systems, and intends to implement additional security measures as necessary. However, hackers may attempt in the future, to gain unauthorized access to modify, alter and use such networks, vehicles and systems to gain control of, or to change, Fisker’s vehicles’ functionality, user interface and performance characteristics, or to gain access to data stored in or generated by the vehicle. Vulnerabilities could be identified in the future and Fisker’s remediation efforts may not be successful. Any unauthorized access to or control of Fisker’s vehicles or their systems or any loss of data could result in legal claims or proceedings. In addition, regardless of their veracity, reports of unauthorized access to Fisker’s vehicles, their systems or data, as well as other factors that may result in the perception that Fisker’s vehicles, their systems or data are capable of being “hacked,” could negatively affect Fisker’s brand and harm its business, prospects, financial condition and operating results.

Interruption or failure of Fisker’s information technology and communications systems could impact Fisker’s ability to effectively provide its services.

Fisker plans to outfit its vehicles with in-vehicle services and functionality that utilize data connectivity to monitor performance and timely capture opportunities for cost-saving preventative maintenance. The availability and effectiveness of Fisker’s services depend on the continued operation of information technology and communications systems, which Fisker has yet to develop. Fisker’s systems will be vulnerable to damage or interruption from, among others, fire, terrorist attacks, natural disasters, power loss, telecommunications failures, computer viruses, computer denial of service attacks, or other attempts to harm Fisker’s systems. Fisker’s data centers could also be subject to break-ins, sabotage and intentional acts of vandalism causing potential disruptions. Some of Fisker’s systems will not be fully redundant, and its disaster recovery planning cannot account for all eventualities. Any problems at Fisker’s data centers could result in lengthy interruptions in its service. In addition, Fisker’s vehicles are highly technical and complex and may contain errors or vulnerabilities, which could result in interruptions in its business or the failure of its systems.

Fisker faces risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt its operations.

Fisker’s facilities or operations could be adversely affected by events outside of its control, such as natural disasters, wars, health epidemics (as more fully described in the risk factor “Fisker faces risks related to health epidemics, including the recent COVID-19 pandemic, which could have a material adverse effect on its business and results of operations” located elsewhere in these Risk Factors), and other calamities. Although Fisker has servers that are hosted in an offsite location, its backup system does not capture data on a real-time basis and it may be unable to recover certain data in the event of a server failure. Fisker cannot assure you that any backup systems will be adequate to protect it from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect Fisker’s ability to provide services.

Fisker may need to defend itself against patent or trademark infringement claims, which may be time-consuming and would cause Fisker to incur substantial costs.

Companies, organizations, or individuals, including Fisker’s competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with Fisker’s ability to make, use,

 

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develop, sell, leasing or market its vehicles or components, which could make it more difficult for Fisker to operate its business. From time to time, Fisker may receive communications from holders of patents or trademarks regarding their proprietary rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights and urge Fisker to take licenses. Fisker’s applications and uses of trademarks relating to its design, software or artificial intelligence technologies could be found to infringe upon existing trademark ownership and rights. In addition, if Fisker is determined to have infringed upon a third party’s intellectual property rights, it may be required to do one or more of the following:

 

   

cease selling or leasing, incorporating certain components into, or using vehicles or offering goods or services that incorporate or use the challenged intellectual property;

 

   

pay substantial damages;

 

   

seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms, or at all;

 

   

redesign its vehicles or other goods or services; or

 

   

establish and maintain alternative branding for its products and services.

In the event of a successful claim of infringement against Fisker and Fisker’s failure or inability to obtain a license to the infringed technology or other intellectual property right, Fisker’s business, prospects, operating results and financial condition could be materially and adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

Fisker may not be able to prevent others from unauthorized use of its intellectual property, which could harm its business and competitive position.

Fisker may not be able to prevent others from unauthorized use of its intellectual property, which could harm its business and competitive position. Fisker relies on a combination of patents, trade secrets (including know-how), employee and third-party nondisclosure agreements, copyrights, trademarks, intellectual property licenses, and other contractual rights to establish and protect its rights in its technology. Despite Fisker’s efforts to protect its proprietary rights, third parties may attempt to copy or otherwise obtain and use Fisker’s intellectual property or seek court declarations that they do not infringe upon its intellectual property rights. Monitoring unauthorized use of Fisker’s intellectual property is difficult and costly, and the steps Fisker has taken or will take will prevent misappropriation. From time to time, Fisker may have to resort to litigation to enforce its intellectual property rights, which could result in substantial costs and diversion of its resources.

Patent, trademark, and trade secret laws vary significantly throughout the world. A number of foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Therefore, Fisker’s intellectual property rights may not be as strong or as easily enforced outside of the United States. Failure to adequately protect Fisker’s intellectual property rights could result in its competitors offering similar products, potentially resulting in the loss of some of Fisker’s competitive advantage and a decrease in its revenue which, would adversely affect its business, prospects, financial condition and operating results.

Fisker’s patent applications may not issue as patents, which may have a material adverse effect on Fisker’s ability to prevent others from commercially exploiting products similar to theirs.

Fisker cannot be certain that it is the first inventor of the subject matter to which it has filed a particular patent application, or if it is the first party to file such a patent application. If another party has filed a patent application for the same subject matter as Fisker has, Fisker may not be entitled to the protection sought by the patent application. Further, the scope of protection of issued patent claims is often difficult to determine. As a

 

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result, Fisker cannot be certain that the patent applications that it files will issue, or that its issued patents will afford protection against competitors with similar technology. In addition, Fisker’s competitors may design around Fisker’s issued patents, which may adversely affect its business, prospects, financial condition or operating results.

As Fisker’s patents may expire and may not be extended, its patent applications may not be granted and its patent rights may be contested, circumvented, invalidated or limited in scope, Fisker’s patent rights may not protect it effectively. In particular, Fisker may not be able to prevent others from developing or exploiting competing technologies, which could have a material and adverse effect on its business operations, financial condition and results of operations.

Fisker cannot assure you that it will be granted patents pursuant to its pending applications. Even if Fisker’s patent applications succeed and it is issued patents in accordance with them, it is still uncertain whether these patents will be contested, circumvented or invalidated in the future. In addition, the rights granted under any issued patents may not provide Fisker with meaningful protection or competitive advantages. The claims under any patents that issue from Fisker’s patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to Fisker’s. The intellectual property rights of others could also bar Fisker from licensing and exploiting any patents that issue from its pending applications. Numerous patents and pending patent applications owned by others exist in the fields in which Fisker has developed and are developing its technology. These patents and patent applications might have priority over Fisker’s patent applications and could subject its patent applications to invalidation. Finally, in addition to those who may claim priority, any of Fisker’s existing or pending patents may also be challenged by others on the basis that they are otherwise invalid or unenforceable.

Fisker may be subject to damages resulting from claims that it or its employees have wrongfully used or disclosed alleged trade secrets of its employees’ former employers.

Many of Fisker’s employees were previously employed by other automotive companies or by suppliers to automotive companies. Fisker may be subject to claims that it or these employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. If Fisker fails in defending such claims, in addition to paying monetary damages, it may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent Fisker’s ability to commercialize its products, which could severely harm its business. Even if Fisker is successful in defending against these claims, litigation could result in substantial costs and demand on management resources.

Fisker’s vehicles are subject to motor vehicle standards and the failure to satisfy such mandated safety standards would have a material adverse effect on its business and operating results.

All vehicles sold must comply with international, federal, and state motor vehicle safety standards. In the United States, vehicles that meet or exceed all federally mandated safety standards are certified under the federal regulations. Rigorous testing and the use of approved materials and equipment are among the requirements for achieving federal certification. Failure by Fisker to have the Fisker Ocean or any future model electric vehicle satisfy motor vehicle standards would have a material adverse effect on its business and operating results.

Fisker is subject to substantial regulation and unfavorable changes to, or failure by Fisker to comply with, these regulations could substantially harm its business and operating results.

Fisker’s electric vehicles, and the sale of motor vehicles in general, are subject to substantial regulation under international, federal, state, and local laws. Fisker expects to incur significant costs in complying with these regulations. Regulations related to the electric vehicle industry and alternative energy are currently evolving and Fisker faces risks associated with changes to these regulations.

 

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To the extent the laws change, Fisker’s vehicles may not comply with applicable international, federal, state or local laws, which would have an adverse effect on its business. Compliance with changing regulations could be burdensome, time consuming, and expensive. To the extent compliance with new regulations is cost prohibitive, Fisker’s business, prospects, financial condition and operating results would be adversely affected.

Internationally, there may be laws in jurisdictions Fisker has not yet entered or laws it is unaware of in jurisdictions it has entered that may restrict its sales or other business practices. Even for those jurisdictions Fisker has analyzed, the laws in this area can be complex, difficult to interpret and may change over time. Continued regulatory limitations and other obstacles interfering with Fisker’s ability to sell or lease vehicles directly to consumers could have a negative and material impact on its business, prospects, financial condition and results of operations.

Fisker will face risks associated with potential international operations, including unfavorable regulatory, political, tax and labor conditions, which could harm its business.

Fisker will face risks associated with any potential international operations, including possible unfavorable regulatory, political, tax and labor conditions, which could harm its business. Fisker anticipates having international operations and subsidiaries that are subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions. Fisker has no experience to date selling or leasing and servicing its vehicles internationally and such expansion would require Fisker to make significant expenditures, including the hiring of local employees and establishing facilities, in advance of generating any revenue. Fisker will be subject to a number of risks associated with international business activities that may increase its costs, impact its ability to sell or lease its EVs and require significant management attention. These risks include:

 

   

conforming Fisker’s vehicles to various international regulatory requirements where its vehicles are sold which requirements may change over time;

 

   

difficulty in staffing and managing foreign operations;

 

   

difficulties attracting customers in new jurisdictions;

 

   

foreign government taxes, regulations and permit requirements, including foreign taxes that Fisker may not be able to offset against taxes imposed upon it in the United States, and foreign tax and other laws limiting its ability to repatriate funds to the United States;

 

   

fluctuations in foreign currency exchange rates and interest rates, including risks related to any foreign currency swap or other hedging activities it undertakes;

 

   

United States and foreign government trade restrictions, tariffs and price or exchange controls;

 

   

foreign labor laws, regulations and restrictions;

 

   

changes in diplomatic and trade relationships;

 

   

political instability, natural disasters, war or events of terrorism; and

 

   

the strength of international economies.

If Fisker fails to successfully address these risks, its business, prospects, operating results and financial condition could be materially harmed.

Fisker’s business could be adversely affected by trade tariffs or other trade barriers.

In recent years, both China and the United States have each imposed tariffs indicating the potential for further trade barriers. These tariffs may escalate a nascent trade war between China and the United States. Tariffs could potentially impact its raw material prices and impact any plans to sell vehicles in China. In addition, these developments could have a material adverse effect on global economic conditions and the stability of global financial markets. Any of these factors could have a material adverse effect on Fisker’s business, financial condition and results of operations.

 

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Fisker may become subject to product liability claims, which could harm its financial condition and liquidity if it is not able to successfully defend or insure against such claims.

Fisker may become subject to product liability claims, even those without merit, which could harm its business, prospects, operating results, and financial condition. The automobile industry experiences significant product liability claims and Fisker faces inherent risk of exposure to claims in the event its vehicles do not perform as expected or malfunction resulting in personal injury or death. Fisker’s risks in this area are particularly pronounced given it has limited field experience of its vehicles. A successful product liability claim against Fisker could require Fisker to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about Fisker’s vehicles and business and inhibit or prevent commercialization of other future vehicle candidates, which would have material adverse effect on Fisker’s brand, business, prospects and operating results. Any insurance coverage might not be sufficient to cover all potential product liability claims. Any lawsuit seeking significant monetary damages either in excess of Fisker’s coverage, or outside of Fisker’s coverage, may have a material adverse effect on Fisker’s reputation, business and financial condition. Fisker may not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if it does face liability for its products and are forced to make a claim under its policy.

Fisker is or will be subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws can subject Fisker to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect its business, results of operations, financial condition and reputation.

Fisker is or will be subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in various jurisdictions in which it conducts or in the future may conduct activities, including the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act 2010, and other anti-corruption laws and regulations. The FCPA and the U.K. Bribery Act 2010 prohibit Fisker and its officers, directors, employees and business partners acting on its behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. The U.K. Bribery Act also prohibits non-governmental “commercial” bribery and soliciting or accepting bribes. A violation of these laws or regulations could adversely affect Fisker’s business, results of operations, financial condition and reputation. Fisker’s policies and procedures designed to ensure compliance with these regulations may not be sufficient and its directors, officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which it may be held responsible.

Non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject Fisker to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect Fisker’s business, results of operations, financial condition and reputation. In addition, changes in economic sanctions laws in the future could adversely impact Fisker’s business and investments in its shares.

Fisker may face legal challenges in one or more states attempting to sell or lease directly to customers which could materially adversely affect its costs.

Fisker’s business model includes the direct sale of vehicles to individual customers. Most, if not all, states require a license to sell or lease vehicles within the state. Many states prohibit manufacturers from directly selling or leasing vehicles to customers. In other states, manufacturers must operate a physical dealership within the state to deliver vehicles to customers. As a result, Fisker may not be able to sell or lease directly to customers in each state in the United States.

 

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Fisker is currently not registered as a dealer in any state. In many states, it is unclear if, as a manufacturer, Fisker will be able to obtain permission to sell or lease and deliver vehicles directly to customers. For customers residing in states in which Fisker will not be allowed to sell, lease or deliver vehicles, Fisker may have to arrange alternate methods of delivery of vehicles. This could include delivering vehicles to adjacent or nearby states in which Fisker is allowed to directly sell or lease and ship vehicles, and arranging for the customer to transport the vehicles to their home states. These workarounds could add significant complexity, and as a result, costs, to Fisker’s business.

Fisker will need to improve its operational and financial systems to support its expected growth, increasingly complex business arrangements, and rules governing revenue and expense recognition and any inability to do so will adversely affect Fisker’s billing and reporting.

To manage the expected growth of its operations and increasing complexity, Fisker will need to improve its operational and financial systems, procedures, and controls and continue to increase systems automation to reduce reliance on manual operations. Any inability to do so will affect Fisker’s billing and reporting. Fisker’s current and planned systems, procedures and controls may not be adequate to support its complex arrangements and the rules governing revenue and expense recognition for its future operations and expected growth. Delays or problems associated with any improvement or expansion of Fisker’s operational and financial systems and controls could adversely affect Fisker’s relationships with its customers, cause harm to its reputation and brand and could also result in errors in its financial and other reporting.

Failure to build Fisker’s finance infrastructure and improve its accounting systems and controls could impair Fisker’s ability to comply with the financial reporting and internal controls requirements for publicly traded companies.

As a public company, Fisker will operate in an increasingly demanding regulatory environment, which requires it to comply with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the regulations of the NYSE, the rules and regulations of the SEC, expanded disclosure requirements, accelerated reporting requirements and more complex accounting rules. Company responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures. Effective internal controls are necessary for Fisker to produce reliable financial reports and are important to help prevent financial fraud. Commencing with its fiscal year ending the year in which the business combination is completed, Fisker must perform system and process evaluation and testing of its internal controls over financial reporting to allow management to report on the effectiveness of its internal controls over financial reporting in its Form 10-K filing for that year, as required by Section 404 of the Sarbanes-Oxley Act. Prior to the Closing, Fisker has never been required to test its internal controls within a specified period and, as a result, it may experience difficulty in meeting these reporting requirements in a timely manner.

Fisker anticipates that the process of building its accounting and financial functions and infrastructure will require significant additional professional fees, internal costs and management efforts. Fisker expects that it will need to implement a new internal system to combine and streamline the management of its financial, accounting, human resources and other functions. However, such a system would likely require Fisker to complete many processes and procedures for the effective use of the system or to run its business using the system, which may result in substantial costs. Any disruptions or difficulties in implementing or using such a system could adversely affect Fisker’s controls and harm its business. Moreover, such disruption or difficulties could result in unanticipated costs and diversion of management’s attention. In addition, Fisker may discover additional weaknesses in its system of internal financial and accounting controls and procedures that could result in a material misstatement of its financial statements. Fisker’s internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

 

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If Fisker is not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if it is unable to maintain proper and effective internal controls, Fisker may not be able to produce timely and accurate financial statements. If Fisker cannot provide reliable financial reports or prevent fraud, its business and results of operations could be harmed, investors could lose confidence in its reported financial information and Fisker could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities.

Fisker Certificate of Incorporation provides, and New Fisker’s second amended and restated certificate of incorporation will provide, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit its stockholders’ ability to obtain a chosen judicial forum for disputes with New Fisker or its directors, officers, employees or stockholders.

Fisker Certificate of Incorporation requires, and New Fisker’s second amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in New Fisker’s name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought in the Court of Chancery in the State of Delaware or, if that court lacks subject matter jurisdiction, another federal or state court situated in the State of Delaware. Any person or entity purchasing or otherwise acquiring any interest in shares of New Fisker’s capital stock shall be deemed to have notice of and consented to the forum provisions in New Fisker’s second amended and restated certificate of incorporation. In addition, New Fisker’s second amended and restated certificate of incorporation and amended and restated bylaws will provide that the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act and the Exchange Act.

In March 2020, the Delaware Supreme Court issued a decision in Salzburg et al. v. Sciabacucchi, which found that an exclusive forum provision providing for claims under the Securities Act to be brought in federal court is facially valid under Delaware law. It is unclear whether this decision will be appealed, or what the final outcome of this case will be. New Fisker intends to enforce this provision, but it does not know whether courts in other jurisdictions will agree with this decision or enforce it.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with New Fisker or any of its directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in Fisker Certificate of Incorporation or New Fisker’s second amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, New Fisker may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, operating results and financial condition.

New Fisker charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of New Fisker’s stock.

Fisker Certificate of Incorporation and New Fisker’s amended and restated bylaws to be in effect upon the Closing will contain provisions that could delay or prevent a change in control of New Fisker. These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions. These provisions include:

 

   

authorizing its Board of Directors to issue preferred stock with voting or other rights or preferences that could discourage a takeover attempt or delay changes in control;

 

   

Mr. Fisker and Dr. Gupta hold sufficient voting power to control voting for election of directors and amend the Fisker Certificate of Incorporation;

 

   

prohibiting cumulative voting in the election of directors;

 

   

providing that vacancies on its Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum;

 

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prohibiting the adoption, amendment or repeal of New Fisker’s amended and restated bylaws or the repeal of the provisions of its amended and restated certificate of incorporation to be in effect upon the Closing regarding the election and removal of directors without the required approval of at least two-thirds of the shares entitled to vote at an election of directors;

 

   

prohibiting stockholder action by written consent;

 

   

limiting the persons who may call special meetings of stockholders; and

 

   

requiring advance notification of stockholder nominations and proposals.

These provisions may frustrate or prevent any attempts by New Fisker stockholders to replace or remove its current management by making it more difficult for stockholders to replace members of New Fisker’s board of directors, which is responsible for appointing the members of its management. In addition, the provisions of Section 203 of the Delaware General Corporate Law (“DGCL”) govern New Fisker. These provisions may prohibit large stockholders, in particular those owning 15% or more of New Fisker’s outstanding voting stock, from merging or combining with New Fisker for a certain period of time without the consent of its board of directors.

These and other provisions in New Fisker’s amended and restated certificate of incorporation and its amended and restated bylaws to be in effect upon the Closing and under Delaware law could discourage potential takeover attempts, reduce the price investors might be willing to pay in the future for shares of New Fisker Common Stock and result in the market price of New Fisker’s Common Stock being lower than it would be without these provisions. For more information, see the section of this proxy statement captioned “Description of Securities—Certain Anti-Takeover Provisions of Delaware Law and our Proposed Second A&R Charter and Bylaws.”

Claims for indemnification by New Fisker’s directors and officers may reduce New Fisker’s available funds to satisfy successful third-party claims against New Fisker and may reduce the amount of money available to New Fisker.

New Fisker’s amended and restated certificate of incorporation and amended and restated bylaws will provide that New Fisker will indemnify its directors and officers, in each case to the fullest extent permitted by Delaware law.

In addition, as permitted by Section 145 of the DGCL, New Fisker’s amended and restated bylaws and its indemnification agreements that it will enter into with its directors and officers will provide that:

 

   

New Fisker will indemnify its directors and officers for serving New Fisker in those capacities or for serving other business enterprises at its request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful;

 

   

New Fisker may, in its discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;

 

   

New Fisker will be required to advance expenses, as incurred, to its directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;

 

   

New Fisker will not be obligated pursuant to its amended and restated bylaws to indemnify a person with respect to proceedings initiated by that person against New Fisker or its other indemnitees, except with respect to proceedings authorized by its board of directors or brought to enforce a right to indemnification;

 

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the rights conferred in New Fisker’s amended and restated bylaws are not exclusive, and New Fisker is authorized to enter into indemnification agreements with its directors, officers, employees and agents and to obtain insurance to indemnify such persons; and

 

   

New Fisker may not retroactively amend its amended and restated bylaw provisions to reduce its indemnification obligations to directors, officers, employees and agents.

Fisker’s management has limited experience in operating a public company.

Fisker’s executive officers have limited experience in the management of a publicly traded company. Fisker’s management team may not successfully or effectively manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of the combined company. Fisker may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. The development and implementation of the standards and controls necessary for the combined company to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is possible that the combined company will be required to expand its employee base and hire additional employees to support its operations as a public company, which will increase its operating costs in future periods.

The dual class structure of New Fisker’s Common Stock has the effect of concentrating voting control with Henrik Fisker and Dr. Geeta Gupta, Fisker’s co-founders, members of its Board of Directors and Chief Executive Officer and Chief Financial Officer, respectively. This will limit or preclude your ability to influence corporate matters, including the outcome of important transactions, including a change in control.

Shares of New Fisker’s Class B Common Stock will have 10 votes per share, while shares of New Fisker’s Class A Common Stock have one vote per share. Henrik Fisker and Dr. Geeta Gupta, Fisker’s co-founders, members of New Fisker’s Board of Directors and Chief Executive Officer and Chief Financial Officer, respectively, hold all of the issued and outstanding shares of New Fisker’s Class B Common Stock. Accordingly, Mr. Fisker and Dr. Gupta will hold approximately 89.8% of the voting power of New Fisker’s capital stock on a fully-diluted basis and will be able to control matters submitted to its stockholders for approval, including the election of directors, amendments of its organizational documents and any merger, consolidation, sale of all or substantially all of New Fisker’s assets or other major corporate transactions. Mr. Fisker and Dr. Gupta may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of New Fisker, could deprive its stockholders of an opportunity to receive a premium for their capital stock as part of a sale of New Fisker, and might ultimately affect the market price of shares of New Fisker’s Class A Common Stock. For information about New Fisker’s dual class structure, see the section titled “Description of Securities.”

New Fisker’s dual class structure may depress the trading price of New Fisker’s Class A Common Stock.

New Fisker cannot predict whether its dual class structure will result in a lower or more volatile market price of New Fisker’s Class A Common Stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes. S&P Dow Jones and FTSE Russell have announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, pursuant to which companies with multiple classes of shares of common stock are excluded. In addition, several stockholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of New Fisker’s Common Stock may cause stockholder advisory firms to publish

 

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negative commentary about New Fisker’s corporate governance practices or otherwise seek to cause New Fisker to change its capital structure. Any such exclusion from indices or any actions or publications by stockholder advisory firms critical of New Fisker’s corporate governance practices or capital structure could adversely affect the value and trading market of New Fisker’s Class A Common Stock.

New Fisker will be a controlled company within the meaning of the NYSE rules, and, as a result, qualifies for exemptions from certain corporate governance requirements that provide protection to stockholders of other companies. To the extent New Fisker utilizes any of these exemptions, you will not have the same protections afforded to stockholders of companies that are subject to such requirements. New Fisker does not currently intend to rely on the exemptions afforded to controlled companies at this time.

So long as more than 50% of the voting power for the election of directors of New Fisker is held by an individual, a group or another company, New Fisker will qualify as a “controlled company” under NYSE rules. Following the completion of the business combination, Henrik Fisker and Dr. Geeta Gupta will control a majority of the voting power of New Fisker’s outstanding capital stock. As a result, New Fisker will be a “controlled company” under NYSE rules. As a controlled company, New Fisker will be exempt from certain NYSE corporate governance requirements, including those that would otherwise require New Fisker’s board of directors to have a majority of independent directors and require that New Fisker either establish compensation and nominating and corporate governance committees, each comprised entirely of independent directors, or otherwise ensure that the compensation of New Fisker’s executive officers and nominees for directors are determined or recommended to the board of directors by the independent members of the board of directors. While New Fisker does not currently intend to rely on any of these exemptions, it will be entitled to do so for as long as New Fisker will be considered a “controlled company,” and to the extent it relies on one or more of these exemptions, holders of New Fisker capital stock will not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.

Henrik Fisker and Dr. Geeta Gupta are married to each other. The separation or divorce of the couple in the future could adversely affect New Fisker’s business.

Henrik Fisker and Dr. Geeta Gupta, Fisker’s co-founders, members of the Board of Directors and Chief Executive Officer and Chief Financial Officer, respectively, are married to each other. They are two of New Fisker’s executive officers and are a vital part of its operations. If they were to become separated or divorced or could otherwise not amicably work with each other, one or both of them may decide to cease his or her employment with New Fisker or it could negatively impact New Fisker’s working environment. Alternatively, their work performance may not be satisfactory if they become preoccupied with issues relating to their personal situation. In these cases, New Fisker’s business could be materially harmed.

New Fisker’s ability to utilize its net operating loss and tax credit carryforwards to offset future taxable income may be subject to certain limitations.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change net operating loss carryforwards, or NOLs, to offset future taxable income. The limitations apply if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period. If Fisker has experienced an ownership change at any time since its incorporation, New Fisker may already be subject to limitations on its ability to utilize its existing NOLs and other tax attributes to offset taxable income or tax liability. In addition, the business combination and future changes in New Fisker’s stock ownership, which may be outside of New Fisker’s control, may trigger an ownership change. Similar provisions of state tax law may also apply to limit New Fisker’s use of accumulated state tax attributes. As a result, even if New Fisker earns net taxable income in the future, its ability to use its pre-change NOL carryforwards and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could potentially result in increased future income tax liability to New Fisker.

 

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Changes to applicable U.S. tax laws and regulations may have a material adverse effect on New Fisker’s business, financial condition and results of operations.

New laws and policy relating to taxes may have an adverse effect on New Fisker’s business, financial condition and results of operations. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to New Fisker. For example, the U.S. government enacted the Tax Cuts and Jobs Act, or the Tax Act, and certain provisions of the Tax Act may adversely affect New Fisker. Changes under the Tax Act include, but are not limited to, a federal corporate income tax rate decrease to 21% for tax years beginning after December 31, 2017, a reduction to the maximum deduction allowed for net operating losses generated in tax years after December 31, 2017 and the elimination of carrybacks of net operating losses. Under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, which modified the Tax Act, U.S. federal net operating loss carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income. The Tax Act is unclear in many respects and could be subject to potential amendments and technical corrections, and is subject to interpretations and implementing regulations by the Treasury and IRS, any of which could mitigate or increase certain adverse effects of the legislation. In addition, it is unclear how these U.S. federal income tax changes will affect state and local taxation. Generally, future changes in applicable U.S. tax laws and regulations, or their interpretation and application could have an adverse effect on New Fisker’s business, financial condition and results of operations.

New Fisker’s failure to meet the continued listing requirements of the NYSE could result in a delisting of its Common Stock.

If, after listing, New Fisker fails to satisfy the continued listing requirements of the NYSE such as the corporate governance requirements or the minimum closing bid price requirement, the NYSE may take steps to delist its Common Stock. Such a delisting would likely have a negative effect on the price of New Fisker’s Common Stock and would impair your ability to sell or purchase New Fisker’s Common Stock when you wish to do so. In the event of a delisting, New Fisker can provide no assurance that any action taken by it to restore compliance with listing requirements would allow its Common Stock to become listed again, stabilize the market price or improve the liquidity of its Common Stock, prevent its Common Stock from dropping below the NYSE minimum bid price requirement or prevent future non-compliance with NYSE’s listing requirements.

If securities or industry analysts do not publish research or reports about New Fisker’s business or publish negative reports about its business, New Fisker’s share price and trading volume could decline.

The trading market for New Fisker’s Common Stock will depend on the research and reports that securities or industry analysts publish about New Fisker or its business. Currently, New Fisker does not have any analyst coverage and may not obtain analyst coverage in the future. In the event New Fisker obtains analyst coverage, it will not have any control over such analysts. If one or more of the analysts who cover New Fisker downgrade New Fisker’s shares or change their opinion of New Fisker’s shares, New Fisker’s share price would likely decline. If one or more of these analysts cease coverage of New Fisker company or fail to regularly publish reports on New Fisker, New Fisker could lose visibility in the financial markets, which could cause its share price or trading volume to decline.

Risks Related to Spartan

Risks Related to Our Business, Operations and Industry

The risks discussed herein have been identified by Spartan’s management based on an evaluation of the historical risks faced by Fisker and relate to Spartan management’s current expectations as to future risks that may result from Spartan’s anticipated ownership and operation of Fisker. Unless the context otherwise requires, all references in this section to “we,” “us” or “our” refer to Spartan.

 

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The loss of senior management or technical personnel could adversely affect our ability to successfully effect the business combination and successfully operate the business thereafter.

Our ability to successfully effect the business combination and successfully operate the business is dependent upon the services of our senior management and technical personnel. While we have scrutinized the individuals who will stay with us following the business combination, our assessment of these individuals may not prove to be correct. We do not plan to obtain any insurance against the loss of any of these individuals. The loss of the services of our senior management or technical personnel could have a material adverse effect on our business, financial condition and results of operations. Spartan will also be dependent, in part, upon Fisker’s technical personnel in connection with operating the business following the business combination. A loss by Fisker of its technical personnel could seriously harm Spartan’s business and results of operations.

There are inherent limitations in all control systems, and misstatements due to error or fraud that could seriously harm Spartan’s business may occur and not be detected.

Spartan’s management does not expect that Spartan’s internal and disclosure controls will prevent all possible error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, an evaluation of controls can only provide reasonable assurance that all material control issues and instances of fraud, if any, in Spartan have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Further, controls can be circumvented by the individual acts of some persons or by collusion of two or more persons. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Spartan will also be dependent, in part, upon Fisker’s internal controls. A failure of Spartan’s or Fisker’s controls and procedures to detect error or fraud could seriously harm Spartan’s business and results of operations.

Spartan’s business could be adversely affected by security threats, including cybersecurity threats and related disruptions.

We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss. Spartan will also be dependent, in part, upon Fisker’s information. A failure in the security of Fisker’s information systems could seriously harm Spartan’s business and results of operations.

We have not registered the shares of Class A Common Stock issuable upon exercise of the warrants under the Securities Act or any state securities laws, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.

We have not registered the shares of Class A Common Stock issuable upon exercise of the warrants under the Securities Act or any state securities laws. However, under the terms of the warrant agreement governing the terms of our warrants, we have agreed that as soon as practicable, but in no event later than 15 business days,

 

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after the closing of an Initial Business Combination, we will use our best efforts to file a registration statement under the Securities Act covering such shares. We will use our best efforts to cause the same to become effective, but in no event later than 60 business days after the Closing, and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if our Class A Common Stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required to use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A Common Stock included in the units. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Class A Common Stock for sale under all applicable state securities laws.

Risks Related to Spartan and the Business Combination

Following the consummation of the business combination, our sole material asset will be our direct equity interest in Fisker and we will be accordingly dependent upon distributions from Fisker to pay taxes and cover our corporate and other overhead expenses and pay dividends, if any, on our common stock.

We are a holding company and, subsequent to the completion of the business combination, will have no material assets other than our direct equity interest in Fisker. We will have no independent means of generating revenue. To the extent Fisker has available cash, we will cause Fisker to make distributions of cash to us to pay taxes, cover our corporate and other overhead expenses and pay dividends, if any, on our common stock. To the extent that we need funds and Fisker fails to generate sufficient cash flow to distribute funds to us or is restricted from making such distributions or payments under applicable law or regulation or under the terms of its financing arrangements, or is otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected.

Our independent registered public accounting firm’s report on our audited financial statements included elsewhere in this proxy statement contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”

As of June 30, 2020, not including cash and marketable securities held in the Trust Account in the amount of $569,592,365, we had $323,563 in cash and cash equivalents and $1,784,625 in total current liabilities. Further, we have incurred and may continue to incur significant costs in pursuit of an Initial Business Combination. If we are not successful in consummating an Initial Business Combination by February 14, 2021, we will liquidate in accordance with our Charter. Our plans to consummate an Initial Business Combination may not be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.

 

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Subsequent to the consummation of the business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.

Although we have conducted due diligence on Fisker, we cannot assure you that this diligence revealed all material issues that may be present in Fisker, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of our control will not later arise. As a result, we may be forced to later write-down or write-off assets, restructure our operations or incur impairment or other charges that could result in losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and may not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us following the completion of the business combination or our securities. In addition, charges of this nature may cause us to be unable to obtain future financing on favorable terms or at all.

Our initial stockholders have agreed to vote in favor of the business combination, regardless of how our public stockholders vote.

Unlike many other blank check companies in which the founders agree to vote their founder shares in accordance with the majority of the votes cast by our public stockholders in connection with an Initial Business Combination, our initial stockholders have agreed to vote any shares of Class A Common Stock and Class B Common Stock owned by them in favor of the business combination. As of the date hereof, our initial stockholders own shares equal to approximately 20% of our issued and outstanding shares of Class A Common Stock and Class B Common Stock in the aggregate. Accordingly, it is more likely that the necessary stockholder approval will be received for the business combination than would be the case if the initial stockholders agreed to vote any shares of Class A Common Stock and Class B Common Stock owned by them in accordance with the majority of the votes cast by our public stockholders.

Our Sponsor, certain members of the Spartan Board and our officers have interests in the business combination that are different from or are in addition to other stockholders in recommending that stockholders vote in favor of approval of the Business Combination Proposal.

When considering the Spartan Board’s recommendation that our stockholders vote in favor of the approval of the Business Combination Proposal, our stockholders should be aware that our directors and officers have interests in the business combination that may be different from, or in addition to, the interests of our stockholders. These interests include:

 

   

the fact that our Sponsor holds 9,360,000 private placement warrants that would expire worthless if a business combination is not consummated;

 

   

the fact that our Sponsor, officers and directors have agreed not to redeem any of the shares of our common stock held by them in connection with a stockholder vote to approve the business combination;

 

   

the fact that our Sponsor paid an aggregate of $25,000 for the Founder Shares, including 412,500 Founder Shares which were subsequently transferred to our independent directors and John J. MacWilliams, a non-independent member of the Spartan Board, and that such securities will have a significantly higher value at the time of the business combination, which if unrestricted and freely tradable would be valued at approximately $207.7 million, based on the closing price of our Class A Common Stock of $15.05 per share on October 1, 2020;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an Initial Business Combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the

 

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proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser amount per public share as is in the Trust Account on the liquidation date, by the claims of (a) any third party (other than our independent public accountants) for services rendered or products sold to us or (b) a prospective target business with which we have entered into a letter of intent, confidentiality or other similar agreement or business combination agreement, but only if such a third party or target business has not executed a waiver of all rights to seek access to the Trust Account;

 

   

the fact that our independent directors and John J. MacWilliams, a non-independent member of the Spartan Board, own an aggregate of 412,500 Founder Shares that were transferred from our Sponsor, which if unrestricted and freely tradeable would be valued at approximately $6.2 million, based on the closing price of our Class A Common Stock of $15.05 per share on October 1, 2020;

 

   

the fact that our Sponsor, officers and directors will be reimbursed for out-of-pocket expenses incurred in connection with activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations; and

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us if an Initial Business Combination is not completed.

Our initial stockholders hold a significant number of shares of our common stock and our Sponsor holds a significant number of our warrants. They will lose their entire investment in us if we do not complete an Initial Business Combination.

Our Sponsor, our independent directors and John J. MacWilliams, a non-independent member of the Spartan Board, hold all of our 13,800,000 Founder Shares, representing 20% of the total outstanding shares upon completion of our IPO. The Founder Shares will be worthless if we do not complete an Initial Business Combination by February 14, 2021. In addition, our Sponsor holds an aggregate of 9,360,000 private placement warrants that will also be worthless if we do not complete an Initial Business Combination by February 14, 2021.

The Founder Shares are identical to the shares of Class A Common Stock included in the units, except that (a) the Founder Shares and the shares of Class A Common Stock into which the Founder Shares convert upon an Initial Business Combination are subject to certain transfer restrictions, (b) our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (i) to waive their redemption rights with respect to their Founder Shares and public shares owned in connection with the completion of an Initial Business Combination, (ii) to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an Initial Business Combination by February 14, 2021 (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if we fail to complete an Initial Business Combination by February 14, 2021) and (c) the Founder Shares are automatically convertible into shares of our Class A Common Stock at the time of an Initial Business Combination, as described herein.

The personal and financial interests of our Sponsor, officers and directors may have influenced their motivation in identifying and selecting the business combination, completing the business combination and influencing our operation following the business combination.

We will incur significant transaction costs in connection with the business combination.

We have and expect to incur significant, non-recurring costs in connection with consummating the business combination. All expenses incurred in connection with the Business Combination Agreement and the business combination, including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of the party incurring such fees, expenses and costs. Our transaction expenses as a result of the business combination are currently estimated at approximately $56 million, including approximately $19.32 million in deferred underwriting discounts and commissions to the underwriters of our IPO.

 

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We may be subject to business uncertainties while the business combination is pending.

Uncertainty about the effect of the business combination on employees and third parties may have an adverse effect on Spartan and Fisker. These uncertainties may impair the ability to retain and motivate key personnel and could cause third parties that deal with Fisker to defer entering into contracts or making other decisions or seek to change existing business relationships.

The unaudited pro forma condensed combined financial information included in this document may not be indicative of what our actual financial position or results of operations would have been.

The unaudited pro forma condensed combined financial information for Spartan following the business combination in this proxy statement is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the business combination been completed on the dates indicated. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

We may waive one or more of the conditions to the business combination.

We may agree to waive, in whole or in part, one or more of the conditions to our obligations to complete the business combination, to the extent permitted by our Charter, bylaws and applicable laws. For example, it is a condition to our obligation to close the business combination that certain of Fisker’s representations and warranties be true and correct in all material respects as of the date of the Business Combination Agreement and the Effective Time. However, if the Spartan Board determines that it is in the best interests of Spartan to proceed with the business combination, then the Spartan Board may elect to waive that condition and close the business combination.

If we are unable to complete an Initial Business Combination on or prior to February 14, 2021, our public stockholders may receive only approximately $10.00 per share on the liquidation of our Trust Account (or less than $10.00 per share in certain circumstances where a third party brings a claim against us that our Sponsor is unable to indemnify), and our warrants will expire worthless.

If we are unable to complete an Initial Business Combination on or prior to February 14, 2021, our public stockholders may receive only approximately $10.00 per share on the liquidation of our Trust Account (or less than $10.00 per share in certain circumstances where a third party brings a claim against us that our Sponsor is unable to indemnify (as described below)), and our warrants will expire worthless.

If third parties bring claims against us, the proceeds held in our Trust Account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share.

Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent public accountants), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. Although no third parties have refused to execute an agreement waiving such claims to the monies held in the Trust Account to date, if any third party refuses to execute such an agreement in the future, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Making such a request of

 

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potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption of our public shares, if we are unable to complete our business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per public share initially held in the Trust Account, due to claims of such creditors. Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent public accountants) for services rendered or products sold to us, or a prospective target business with which we have entered into a letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (a) $10.00 per public share and (b) the actual amount per public share held in the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets as of the date of the liquidation of the Trust Account, in each case including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, less franchise and income taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to

satisfy its indemnity obligations and we believe that our Sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for an Initial Business Combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete an Initial Business Combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Our directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (a) $10.00 per public share and (b) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, less franchise and income taxes payable, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.

While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public stockholders may be reduced below $10.00 per share.

 

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We may not have sufficient funds to satisfy indemnification claims of our directors and officers.

We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed, and any persons who may become officers or directors prior to an Initial Business Combination will agree, to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against the Trust Account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (a) we have sufficient funds outside of the Trust Account or (b) we consummate an Initial Business Combination. Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of the Spartan Board may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of the Spartan Board and us to claims of punitive damages.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, the Spartan Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors.

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

Even if we consummate the business combination, there is no guarantee that the public warrants will be in the money at the time they become exercisable, and they may expire worthless.

The exercise price for our warrants is $11.50 per share of Class A Common Stock. There is no guarantee that the public warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the warrants may expire worthless.

 

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We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then-outstanding public warrants. As a result, the exercise price of the warrants could be increased, the exercise period could be shortened and the number of shares of our Class A Common Stock purchasable upon exercise of a warrant could be decreased, all without a holder’s approval.

Our warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then-outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of shares of our Class A Common Stock purchasable upon exercise of a warrant.

We may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their warrants worthless.

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our Class A Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you (a) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (b) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (c) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by our Sponsor or its permitted transferees.

Because certain of our shares of Class A Common Stock and warrants currently trade as units consisting of one share of Class A Common Stock and one-third of one warrant, the units may be worth less than units of other blank check companies.

Each unit contains one-third of one warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole warrants will trade. This is different from other blank check companies similar to ours whose units include one share of common stock and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of an Initial Business Combination since the warrants will be exercisable in the aggregate for one-third of the number of shares compared to units that each contain a whole warrant to purchase one share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.

 

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We may issue additional common stock or preferred stock to complete the business combination or under an employee incentive plan after completion of the business combination. Any such issuances would dilute the interest of our stockholders and likely present other risks.

We may issue a substantial number of additional shares of common or preferred stock to complete the business combination or under an employee incentive plan after completion of the business combination. The issuance of additional shares of common or preferred stock:

 

   

potential termination of the Business Combination Agreement if our securities are not listed on another national exchange mutually agreed to by Fisker;

 

   

may significantly dilute the equity interests of our investors;

 

   

may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;

 

   

could cause a change in control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and

 

   

may adversely affect prevailing market prices for our units, Class A Common Stock and/or warrants.

The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

We cannot assure you that our securities will continue to be listed on the NYSE after the business combination. In connection with the business combination, we will be required to demonstrate compliance with the NYSE’s initial listing requirements, which are more rigorous than the NYSE’s continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE. For instance, our stock price would generally be required to be at least $4.00 per share, our aggregate market value would be required to be at least $150 million, and the market value of our publicly held shares would be required to be at least $40 million. We cannot assure you that we will be able to meet those initial listing requirements at that time. Our continued eligibility for listing may depend on, among other things, the number of our shares that are redeemed.

If the NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

 

   

a limited availability of market quotations for our securities;

 

   

reduced liquidity for our securities;

 

   

a determination that our Class A Common Stock is a “penny stock” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our units, Class A Common Stock and public warrants are listed on the NYSE, our units, Class A Common Stock and public warrants qualify as covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of

 

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securities issued by blank check companies, other than the state of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on the NYSE, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

The Spartan Board did not obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the business combination.

The Spartan Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the business combination. Spartan’s officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of Spartan’s advisors, enabled them to make the necessary analyses and determinations regarding the business combination. Accordingly, investors will be relying solely on the judgment of the Spartan Board in valuing Fisker and assuming the risk that the Spartan Board may not have properly valued the business. The lack of a third-party valuation or fairness opinion may also lead an increased number of stockholders to vote against the proposed business combination or demand redemption of their shares for cash, which could potentially impact Spartan’s ability to consummate the business combination.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our Class A Common Stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of Class A Common Stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A Common Stock. After the business combination (and assuming no redemptions by our public stockholders of public shares), our Sponsor, officers and directors will hold approximately 55.6% of our Common Stock, including the 13,358,824 shares of Class A Common Stock into which the Founder Shares convert (which will constitute 4.5% of our Common Stock). Assuming a maximum redemption by our public stockholders of 100% of the public shares, our Sponsor, officers and directors will hold approximately 68.5% of our Common Stock including the 13,358,824 shares of Class A Common Stock into which the Founder Shares convert (which will constitute 5.6% of our Common Stock). Pursuant to the terms of a letter agreement entered into at the time of the IPO, the Founder Shares (which will be converted into shares of Class A Common Stock at the Closing) may not be transferred until the earlier to occur of (a) one year after the Closing or (b) the date on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last reported sale price of our Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing, the shares of Class A Common Stock into which the Founder Shares convert will be released from these transfer restrictions. In connection with the Closing, the IPO Registration Rights Agreement will be amended and restated and Spartan and the Reg Rights Holders will enter into the A&R Registration Rights Agreement. Pursuant to the A&R Registration Rights Agreement, Spartan will agree that, within 30 calendar days after the Closing, Spartan will file with the Founders Registration Statement with the SEC (at Spartan’s sole cost and expense), and Spartan will use its reasonable best efforts to have the Founders Registration Statement become effective as soon as reasonably practicable after the filing thereof. Additionally, Spartan will agree that, as soon as reasonably practicable after Spartan is eligible to register the Reg Rights Holders’ securities on a registration statement on Form S-3, Spartan will file the New Holders Registration Statement with the SEC (at Spartan’s sole cost and expense), and Spartan will use its reasonable best efforts to have the New Holders Registration Statement become effective as soon as reasonably practicable after the filing thereof. In certain circumstances, the Reg Rights Holders can demand up to three underwritten

 

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offerings and will be entitled to customary piggyback registration rights. Further, under the Subscription Agreements, we are required to file a registration statement within 30 days after the Closing to register the resale of the PIPE Shares, and we will use our commercially reasonable efforts to have the PIPE Resale Registration Statement declared effective as soon as practicable after the filing thereof.

For more information about the A&R Registration Rights Agreement and Subscription Agreements, see the section entitled “Proposal No. 1—The Business Combination Proposal—Related Agreements—A&R Registration Rights Agreement” and the section entitled “Proposal No. 1—The Business Combination Proposal—Related Agreements—PIPE Financing.”

If the business combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of our securities may decline.

If the benefits of the business combination do not meet the expectations of investors or securities analysts, the market price of our securities prior to the Closing may decline. The market values of our securities at the time of the business combination may vary significantly from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement or the date on which our stockholders vote on the business combination.

In addition, following the business combination, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Prior to the business combination, trading in the shares of our Class A Common Stock has not been active. Accordingly, the valuation ascribed to our Class A Common Stock in the business combination may not be indicative of the price that will prevail in the trading market following the business combination. If an active market for our securities develops and continues, the trading price of our securities following the business combination could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our securities and our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of our securities following the business combination may include:

 

   

actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

 

   

changes in the market’s expectations about our operating results;

 

   

success of competitors;

 

   

our operating results failing to meet the expectation of securities analysts or investors in a particular period;

 

   

changes in financial estimates and recommendations by securities analysts concerning New Fisker or the market in general;

 

   

operating and stock price performance of other companies that investors deem comparable to us;

 

   

our ability to market new and enhanced products and technologies on a timely basis;

 

   

changes in laws and regulations affecting our business;

 

   

our ability to meet compliance requirements;

 

   

commencement of, or involvement in, litigation involving New Fisker;

 

   

changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

 

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the volume of shares of our Class A Common Stock available for public sale;

 

   

any major change in the Spartan Board or management;

 

   

sales of substantial amounts of Class A Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and the NYSE have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to New Fisker following the business combination could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Following the business combination, if securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our Class A Common Stock adversely, the price and trading volume of our Class A Common Stock could decline.

The trading market for our Class A Common Stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover New Fisker following the business combination change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Class A Common Stock would likely decline. If any analyst who may cover New Fisker following the business combination were to cease their coverage or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

Our Sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase public shares from public stockholders, which may influence the vote on the Business Combination Proposal and reduce the public “float” of our Class A Common Stock.

Our Sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of the business combination, although they are under no obligation to do so. There is no limit on the number of public shares our Sponsor, directors, officers, advisors or any of their respective affiliates may purchase in such transactions, subject to compliance with applicable law and the rules of the NYSE. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the per share pro rata portion of the Trust Account. However, our Sponsor, directors, officers, advisors and their respective affiliates have not consummated any such purchases or acquisitions, have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase public shares in such transactions. None of our Sponsor, directors, officers, advisors or any of their respective affiliates will make any such purchases when they are in possession of any material non-public information not disclosed to the seller of such public shares or during a restricted period under Regulation M under the Exchange Act. Such a purchase could include a contractual acknowledgement that such stockholder, although still the record holder of such public shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual provision that directs such stockholder to vote such shares in a manner directed by the purchaser.

 

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In the event that our Sponsor, directors, officers, advisors or any of their respective affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares.

The purpose of any such purchases of public shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in the Business Combination Agreement, where it appears that such requirement would otherwise not be met. Any such purchases of our public shares may result in the completion of the business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent the purchasers are subject to such reporting requirements.

In addition, if such purchases are made, the public “float” of our Class A Common Stock may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. See the section entitled “Proposal No. 1—The Business Combination Proposal—Potential Purchases of Public Shares” for a description of how our Sponsor, directors, officers, advisors or any of their respective affiliates will select which stockholders or warrantholders to purchase securities from in any private transaction.

Legal proceedings in connection with the business combination, the outcomes of which are uncertain, could delay or prevent the completion of the business combination.

On August 31, 2020, a putative class action lawsuit was filed in the Supreme Court of the State of New York by a purported Spartan stockholder in connection with the business combination: Bailey v. Spartan Energy Acquisition Corp., et al., Index No. 654150/2020 (Sup. Ct. N.Y. Cnty.). The complaint names Spartan and certain current and former members of the Spartan Board as defendants. The complaint alleges, among other things, breach of fiduciary duty claims against the Spartan Board in connection with the business combination. The complaint also alleges that this proxy statement is misleading and/or omits material information concerning the business combination. The complaint generally seeks, among other things, injunctive relief and an award of attorneys’ fees. Additional lawsuits may be filed against Spartan or its directors and officers in connection with the business combination. Defending such additional lawsuits could require Spartan to incur significant costs and draw the attention of Spartan’s management team away from the business combination. Further, the defense or settlement of any lawsuit or claim that remains unresolved at the time the business combination is consummated may adversely affect the combined company’s business, financial condition, results of operations and cash flows. Such legal proceedings could delay or prevent the business combination from becoming effective within the contemplated timeframe.

Changes in laws or regulations, or a failure to comply with any laws or regulations, may adversely affect our business, investments and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete the business combination, and results of operations.

 

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As a result of the business combination, our tax obligations and related filings may become significantly more complex and subject to greater risk of audit or examination by taxing authorities, and outcomes resulting from such audits or examinations could adversely impact our after-tax profitability and financial results. In addition, we may expect to have international supplier, distributor and customer relationships and may expand operations to multiple jurisdictions, including jurisdictions in which the tax laws, their interpretation or their administration may not be favorable to us, and future tax legislative or regulatory changes in any jurisdiction in which we will operate or have subsidiaries could result in changes to the taxation of our income and operations, which could cause our after-tax profitability to be lower than anticipated.

After the business combination, our operations will be subject to significant income, withholding and other tax obligations in the United States and may become subject to taxes in numerous additional state, local and non-U.S. jurisdictions with respect to our income, operations and subsidiaries related to those jurisdictions. Our after-tax profitability could be subject to volatility or affected by numerous factors, including (a) the availability of tax deductions, credits, exemptions, refunds (including refunds of value added taxes) and other benefits to reduce our tax liabilities, (b) changes in the valuation of our deferred tax assets and liabilities, (c) expected timing and amount of the release of any tax valuation allowances, (d) tax treatment of stock-based compensation, (e) changes in the relative amount of our earnings subject to tax in the various jurisdictions in which we operate or have subsidiaries, (f) the potential expansion of our business into or otherwise becoming subject to tax in additional jurisdictions, (g) changes to our existing intercompany structure (and any costs related thereto) and business operations, (h) the extent of our intercompany transactions and the extent to which taxing authorities in the relevant jurisdictions respect those intercompany transactions and (i) our ability to structure our operations in an efficient and competitive manner. Due to the complexity of multinational tax obligations and filings, we may have a heightened risk related to audits or examinations by U.S. federal, state, local and non-U.S. taxing authorities. Outcomes from these audits or examinations could have an adverse effect on our after-tax profitability and financial condition.

Our after-tax profitability may also be adversely impacted by changes in the relevant tax laws and tax rates, treaties, regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive effect. For example, the Tax Act enacted many significant changes to the U.S. tax laws. Future guidelines from the IRS with respect to the Tax Act may affect us, and certain aspects of the Tax Act could be repealed or modified in future legislation. The recently enacted CARES Act has already modified certain provisions of the Tax Act. In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the CARES Act or any newly enacted federal tax legislation. Additionally, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS recently entered into force among the jurisdictions that have ratified it, although the United States has not yet entered into this convention. These recent changes could negatively impact our taxation, especially if we expand our relationships and operations internationally.

The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

We qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including (a) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year (i) following August 14, 2023, the fifth anniversary of our IPO, (ii) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time) or (iii) in which we are deemed to be a large accelerated filer,

 

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which means the market value of our Class A Common Stock that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three year period.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

We cannot predict if investors will find our Class A Common Stock less attractive because we will rely on these exemptions. If some investors find our Class A Common Stock less attractive as a result, there may be a less active trading market for our Class A Common Stock and our stock price may be more volatile.

Our warrants and Founder Shares may have an adverse effect on the market price of our Class A Common Stock and make it more difficult to effectuate our business combination.

We issued warrants to purchase 18,400,000 shares of Class A Common Stock as part of the units. We also issued 9,360,000 private placement warrants, each exercisable to purchase one share of Class A Common Stock at $11.50 per share.

Our initial stockholders currently own an aggregate of 13,800,000 Founder Shares. The Founder Shares are convertible into shares of Class A Common Stock on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to further adjustment as set forth herein. In addition, if our Sponsor makes any working capital loans, it may convert those loans into up to an additional 1,000,000 private placement warrants, at the price of $1.50 per warrant. Any issuance of a substantial number of additional shares of Class A Common Stock upon exercise of these warrants and conversion rights will increase the number of issued and outstanding shares of Class A Common Stock and reduce the value of the Class A Common Stock issued to complete the business combination. Therefore, our warrants and Founder Shares may make it more difficult to effectuate the business combination or increase the cost of acquiring Fisker.

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete the business combination even if a substantial majority of our stockholders do not agree.

Our Charter does not provide a specified maximum redemption threshold, except that in no event will we redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are not subject to the SEC’s “penny stock” rules). As a result, we may be able to complete the business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to our Sponsor, officers, directors, advisors or any of their respective affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A Common Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of Class A Common Stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

 

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The business combination or post-combination company may be materially adversely affected by the recent COVID-19 outbreak.

In addition to the risks described above under “Fisker faces risks related to health epidemics, including the recent COVID-19 pandemic, which could have a material adverse effect on its business and results of operations,” our ability to consummate the business combination may be materially adversely affected due to significant governmental measures being implemented to contain the outbreak of COVID-19 or its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit our ability to have meetings with potential investors or affect the ability of Fisker’s personnel, vendors and service providers to negotiate and consummate the business combination in a timely manner. The extent to which COVID-19 impacts the business combination or the post-combination company will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate the business combination may be materially adversely affected. Additionally, if the financial markets or the overall economy are impacted for an extended period, the post-combination company’s results of operations, financial position and cash flows may be materially adversely affected.

Risks Related to the Redemption

There is no guarantee that a stockholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

We can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the completion of the business combination or any alternative business combination. Certain events following the consummation of the business combination may cause an increase in our share price and may result in a lower value realized now than a stockholder might realize in the future had the stockholder redeemed their shares. Similarly, if a stockholder does not redeem their shares, the stockholder will bear the risk of ownership of the public shares after the consummation of the business combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement. A stockholder should consult, and rely solely upon, the stockholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

If our stockholders fail to comply with the redemption requirements specified in this proxy statement, they will not be entitled to redeem their shares of Class A Common Stock for a pro rata portion of the funds held in the Trust Account.

In order to exercise their redemption rights, holders of public shares are required to submit a request in writing and deliver their shares (either physically or electronically) to our transfer agent at least two business days prior to the special meeting. Stockholders electing to redeem their shares will receive their pro rata portion of the Trust Account, including interest not previously released to us to pay our franchise and income taxes, calculated as of two business days prior to the anticipated consummation of the business combination. See the section entitled “Special Meeting of Spartan Stockholders—Redemption Rights” for additional information on how to exercise your redemption rights.

Stockholders who wish to redeem their shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline.

Public stockholders who wish to redeem their shares for a pro rata portion of the Trust Account must, among other things, as more fully described in the section entitled “Special Meeting of Spartan Stockholders—Redemption Rights,” tender their certificates to our transfer agent or deliver their shares to the transfer agent electronically through DTC prior to 5:00 p.m., Eastern time, on October 26, 2020. In order to obtain a physical

 

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stock certificate, a stockholder’s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers, it may take significantly longer than two weeks to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

In addition, holders of outstanding units of Spartan must separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold units registered in your own name, you must deliver the certificate for such units or deliver such units electronically to Continental Stock Transfer & Trust Company with written instructions to separate such units into public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share certificates or electronic delivery of the public shares back to you so that you may then exercise your redemption rights with respect to the public shares following the separation of such public shares from the units.

If a broker, dealer, commercial bank, trust company or other nominee holds your units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using DTC’s DWAC system, a withdrawal of the relevant units and a deposit of the corresponding number of public shares and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights with respect to the public shares following the separation of such public shares from the units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

If a public stockholder fails to receive notice of Spartan’s offer to redeem its public shares in connection with the business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

Spartan will comply with the proxy rules when conducting redemptions in connection with the business combination. Despite Spartan’s compliance with these rules, if a public stockholder fails to receive Spartan’s proxy materials, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the proxy materials that Spartan will furnish to holders of its public shares in connection with the business combination will describe the various procedures that must be complied with in order to validly redeem public shares. In the event that a stockholder fails to comply with these or any other procedures, its shares may not be redeemed.

The U.S. federal income tax treatment of the redemption of our Class A Common Stock as a sale of such Class A Common Stock depends on a stockholder’s specific facts.

The U.S. federal income tax treatment of a redemption of our Class A Common Stock will depend on whether the redemption qualifies as a sale of such Class A Common Stock under Section 302 of the Code, which will depend largely on the total number of shares of our stock treated as held (actually or constructively) by the stockholder electing to redeem its Class A Common Stock relative to all of our shares of stock outstanding before and after the redemption.

If such redemption is not treated as a sale of Class A Common Stock for U.S. federal income tax purposes, the redemption will instead be treated as a corporate distribution. See “Proposal No. 1—The Business Combination Proposal—Certain U.S. Federal Income Tax Considerations” for a more detailed discussion of the U.S. federal income tax treatment of a redemption of Class A Common Stock.

 

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If Spartan is unable to consummate the business combination or any other Initial Business Combination by February 14, 2021, the public stockholders may be forced to wait beyond such date before redemption from the Trust Account.

If Spartan is unable to consummate the business combination by February 14, 2021, Spartan will (a) cease all operations except for the purpose of winding up, (b) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (c) as promptly as reasonably possible following such redemption, subject to the approval of Spartan’s remaining stockholders and the Spartan Board, dissolve and liquidate, subject in each case to Spartan’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined financial information (the “Summary Pro Forma Information”) gives effect to the transaction contemplated by the Business Combination Agreement. The business combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Spartan will be treated as the “acquired” company for financial reporting purposes. Accordingly, the business combination will be reflected as the equivalent of Fisker issuing stock for the net assets of Spartan, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the business combination will be those of Fisker. The summary unaudited pro forma condensed combined balance sheet data as of June 30, 2020 gives effect to the business combination as if it had occurred on June 30, 2020. The summary unaudited pro forma condensed combined statements of operations data for the six months ended June 30, 2020 and year ended December 31, 2019 give effect to the business combination as if it had occurred on January 1, 2019.

The Summary Pro Forma Information has been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information of the post-combination company appearing elsewhere in this proxy statement and the accompanying notes to the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements and related notes of Spartan and Fisker for the applicable periods included in this proxy statement. The Summary Pro Forma Information has been presented for informational purposes only and is not necessarily indicative of what the post-combination company’s financial position or results of operations actually would have been had the business combination been completed as of the dates indicated. In addition, the Summary Pro Forma Information does not purport to project the future financial position or operating results of the post-combination company.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption by Spartan’s public stockholders of shares of Class A Common Stock for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the Trust Account:

 

   

Assuming Minimum Redemption: In connection with the Extension (as defined below), an aggregate of 7,458 shares of Spartan’s Class A Common Stock was redeemed, and approximately $0.1 million was withdrawn out of the Trust Account for such redemption. After redemptions, there were 55,192,542 public shares outstanding. This presentation assumes that no additional shares of Class A Common Stock are redeemed from the public stockholders.

 

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Assuming Maximum Redemption: This presentation assumes that in addition to the 7,458 public shares redeemed in August 2020, 55,192,542 of the public shares are redeemed. This scenario gives effect to public share redemptions for aggregate redemption payments of $569.6 million using a per share redemption price that was calculated as $569,592,365 in the Trust Account per the unaudited pro forma condensed combined balance sheet divided by 55,192,542 public shares outstanding. As Spartan is issuing equity to the equity holders of Fisker, there is no minimum cash required to close the transaction.

 

     Pro Forma
Combined
(Assuming Minimum
Redemption)
    Pro Forma
Combined

(Assuming Maximum
Redemption)
 

Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data

    

Six months Ended June 30, 2020 (in thousands except per share data)

    

Revenue

   $ —       $ —    

Net loss per share – Class A—basic and diluted

     $ (0.01     $ (0.01

Weighted-average Class A shares outstanding—basic and diluted

     165,232,769       110,040,227  

Net loss per share – Class B—basic and diluted

   $ (0.01   $ (0.01

Weighted-average Class B shares outstanding—basic and diluted

     129,122,242       129,122,242  

Summary Unaudited Pro Forma Condensed Combined Statement of Operations Data

    

Year Ended December 31, 2019 (in thousands except per share data)

    

Revenue

   $ —       $ —    

Net loss per share – Class A—basic and diluted

   $ (0.04   $ (0.05

Weighted-average Class A shares outstanding—basic and diluted

     165,232,769       110,040,227  

Net loss per share – Class B—basic and diluted

   $ (0.04   $ (0.05

Weighted-average Class B shares outstanding—basic and diluted

     129,122,242       129,122,242  

Summary Unaudited Pro Forma Condensed Combined

    

Balance Sheet Data as of June 30, 2020

    

Total assets

   $ 1,047,079     $ 477,564  

Total liabilities

   $ 4,941     $ 4,941  

Total stockholders’ equity

   $ 1,042,138     $ 472,623  

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below shall have the same meaning as terms defined and included elsewhere in this proxy statement.

Introduction

Spartan is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the business combination. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.

Spartan is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. Spartan was incorporated in Delaware on October 13, 2017. On August 14, 2018, Spartan consummated its IPO of 55,200,000 units, including 7,200,000 units that were issued pursuant to the underwriters’ full exercise of their over-allotment option. The units were sold at a price of $10.00 per unit, generating gross proceeds to Spartan of $552,000,000. On August 14, 2018, simultaneously with the consummation of the IPO, Spartan completed the private sale of 9,360,000 private placement warrants (the “Private Placement Warrants”) at a purchase price of $1.50 per warrant to our Sponsor, generating gross proceeds to Spartan of approximately $14,040,000.

Approximately $552,000,000 of the net proceeds from the IPO and the private placement with our Sponsor has been deposited in the Trust Account and invested in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 180 days or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. As of June 30, 2020, there was $569.6 million held in the Trust Account. Spartan had 24 months from the closing of the IPO (by August 14, 2020) to complete an Initial Business Combination. On July 23, 2020, Spartan filed a proposal to amend Spartan’s amended and restated certificate of incorporation (the “charter”) to extend the date by which Spartan has to complete a business combination (the “Extension”) for an additional six months, from August 14, 2020 to February 14, 2021. On August 3, 2020, Spartan held a special meeting of its stockholders (the “Special Meeting”). At the Special Meeting, Spartan’s stockholders approved and adopted an amendment (the “Charter Amendment”) to Spartan’s amended and restated certificate of incorporation to extend the date by which Spartan has to consummate a business combination for an additional six months, from August 14, 2020 to February 14, 2021. In connection with the Charter Amendment, the holders of 7,458 shares of Class A Common Stock exercised their right to redeem their shares for aggregate cash redemption amount of approximately $76,922.

Fisker is building a technology-enabled, asset-light automotive business model that it believes will be among the first of its kind and aligned with the future state of the automotive industry. Fisker combines the legendary design and engineering expertise of Henrik Fisker—the visionary behind the iconic BMW Z8 sports car and the famed Aston Martin DB9 and V8 Vantage, and—to develop high quality electric vehicles with strong emotional appeal by engaging the consumer’s senses through the overall experience of Fisker vehicles. Fisker believes it is well positioned through its global premium EV brand, its renowned design capabilities and sustainability focus.

The unaudited pro forma condensed combined balance sheet as of June 30, 2020 combines the historical balance sheet of Spartan and the historical balance sheet of Fisker on a pro forma basis as if the business combination and related transactions, summarized below, had been consummated on June 30, 2020. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2019 and the six months ended June 30, 2020, combine the historical statements of operations of Spartan and Fisker for such periods on a pro forma basis as if the business combination and related transactions, summarized below, had been consummated on January 1, 2019, the beginning of the earliest period presented:

 

   

the merger of Merger Sub with and into Fisker, with Fisker surviving the merger as a wholly-owned subsidiary of Spartan;

 

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the net proceeds of $482.5 million ($500.0 million gross less $17.5 million in fees) from the issuance and sale of 50,000,000 shares of Class A Common Stock at $10.00 per share in the PIPE Financing;

 

   

the issuance and conversion of all of Fisker’s convertible equity securities and convertible notes into Common Stock; and

 

   

the conversion of all outstanding Fisker shares and stock options into Common Stock totaling 175.8 million shares.

The pro forma condensed combined financial information may not be useful in predicting the future financial condition and results of operations of the post-combination company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

The historical financial information of Spartan was derived from the unaudited and audited financial statements of Spartan as of and for the six months ended June 30, 2020, and for the year ended December 31, 2019, which are included elsewhere in this proxy statement. The historical financial information of Fisker was derived from the unaudited and audited consolidated financial statements of Fisker as of and for the six months ended June 30, 2020, and for the year ended December 31, 2019, which are included elsewhere in this proxy statement. This information should be read together with Spartan’s and Fisker’s unaudited and audited financial statements and related notes, the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Spartan,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Fisker” and other financial information included elsewhere in this proxy statement.

The business combination will be accounted for as a reverse recapitalization, in accordance with GAAP. Under this method of accounting, Spartan will be treated as the “acquired” company for financial reporting purposes. Accordingly, the business combination will be treated as the equivalent of Fisker issuing stock for the net assets of Spartan, accompanied by a recapitalization. The net assets of Spartan will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the business combination will be those of Fisker.

Fisker has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances under both the minimum and maximum redemption scenarios:

 

   

Fisker stockholders will have the largest voting interest in the post-combination company;

 

   

The Class B Common Stock issued to two Fisker stockholders allows for incremental voting rights;

 

   

The board of directors of the post-combination company will have seven members, and Fisker will have the ability to nominate the majority of the members of the board of directors;

 

   

Fisker management will hold executive management roles for the post-combination company and be responsible for the day-to-day operations;

 

   

The post-combination company will assume the Fisker name; and

 

   

The intended strategy of the post-combination entity will continue Fisker’s current strategy of being a leader in the automotive industry.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption by Spartan’s public stockholders of shares of Class A Common Stock for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the Trust Account:

 

   

Assuming Minimum Redemption: In connection with the Extension, an aggregate of 7,458 shares of Spartan’s Class A Common Stock was redeemed, and approximately $0.1 million was withdrawn out of the Trust Account for such redemption. After redemptions, there were 55,192,542 public shares outstanding. This presentation assumes that no additional shares of Class A Common Stock are redeemed from the public stockholders.

 

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Assuming Maximum Redemption: This presentation assumes that in addition to the 7,458 public shares redeemed in August 2020, 55,192,542 of the public shares are redeemed. This scenario gives

  effect to public share redemptions for aggregate redemption payments of $569.6 million using a per share redemption price that was calculated as $569,592,365 in the Trust Account per the unaudited pro forma condensed combined balance sheet divided by 55,192,542 public shares outstanding. As Spartan is issuing equity to the equity holders of Fisker, there is no minimum cash required to close the transaction.

Description of the Business Combination

The aggregate consideration for the business combination will be $1.8 billion, payable in the form of shares of Common Stock.

The following summarizes the consideration in both the minimum redemption and maximum redemption scenarios:

 

(in thousands, except for share and per share amounts)

      

Shares transferred at Closing(1)

     175,803,645  

Value per share(2)

     10.00  
  

 

 

 

Total Share Consideration

   $ 1,758,036  
  

 

 

 

 

(1)

Actual shares transferred is subject to an adjustment prior to closing.

(2)

Share Consideration is calculated using a $10.00 reference price. Actual total Share Consideration will be dependent on the value of Common Stock at closing.

Holders of Fisker Class A Common Stock and Fisker Class B Common Stock will receive shares of Class A Common Stock and Class B Common Stock, respectively, in an amount determined by application of the Exchange Ratio except for the purchaser of the Fisker Convertible Equity Security. The purchaser of the Fisker Convertible Equity Security will receive a number of shares as defined in the Convertible Equity Security Purchase Agreement, dated July 7, 2020. The following summarizes the pro forma Common Stock shares outstanding under the two redemption scenarios:

 

     Assuming
Minimum
Redemption
(Shares)
     %     Assuming
Maximum
Redemption
(Shares)
     %  

Fisker Shareholders—Class A(1)

     39,466,611        13.4     39,466,611        16.5

Convertible Equity Security shares

     5,882,352        1.9     5,882,352        2.5

Convertible Note shares

     1,332,440        0.4     1,332,440        0.5
  

 

 

    

 

 

   

 

 

    

 

 

 

Fisker total—Class A

     46,681,403        15.7     46,681,403        19.5
  

 

 

    

 

 

   

 

 

    

 

 

 

Fisker Shareholders—Class B

     129,122,242        44.0     129,122,242        54.0
  

 

 

    

 

 

   

 

 

    

 

 

 

Total Fisker Merger Shares

     175,803,645        59.7     175,803,645        73.5

Spartan public shares

     55,192,542        18.8            0.0

Founder Shares

     13,358,824        4.5     13,358,824        5.6

PIPE Financing

     50,000,000        17.0     50,000,000        20.9
  

 

 

      

 

 

    

Pro Forma Common Stock at June 30, 2020

     294,355,011        100.0     239,162,469        100.0
  

 

 

      

 

 

    

 

(1)

Includes an additional 362,444 shares calculated based on the Closing Cash as of June 30, 2020 for pro forma purposes.

The following unaudited pro forma condensed combined balance sheet as of June 30, 2020 and the unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2020 and the year ended December 31, 2019 are based on the historical financial statements of Spartan and Fisker. The

 

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unaudited pro forma adjustments are based on information currently available, and assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JUNE 30, 2020

(in thousands)

 

    As of June 30, 2020           Convertible
Security
Offering
and
Convertible
Note
Issuances
                      As of June 30,
2020
                As of
June 30,
2020
 
    Fisker
(Historical)
    Spartan
(Historical)
    Reclassification
Adjustments
(Note 2)
          Pro Forma
Adjustments
(Assuming
Minimum
Redemption)
          Pro Forma
Combined
(Assuming

Minimum
Redemption)
    Pro Forma
Adjustments
(Assuming
Maximum
Redemption)
    Pro Forma
Combined
(Assuming
Maximum
Redemption)
 

ASSETS

                     

Current assets:

                     

Cash and cash equivalents

  $ 3,624     $ 324     $ —       $ 46,500       A     $ (77     C     $ 1,046,850     $ (569,515     P     $ 477,335  
          2,577       B       569,592       D          
              500,000       E          
              (19,320     F          
              (56,170     G          
              (200     H          

Advances to related party

    —         12             —           12       —           12  

Prepaid expenses

    —         60       (60         —           —         —           —    

Prepaid expenses and other current assets

    35       —         60                   95               95  
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Total current assets

    3,659       396       —         49,077         993,825         1,046,957       (569,515       477,442  

Non-current assets:

                     

Cash and investments held in Trust Account

    —         569,592       —             (569,592     D       —         —           —    

Property and equipment, net

    54       —         —             —           54       —           54  

Right-of-use asset, net

    68       —         —             —           68       —           68  
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Total non-current assets

    122       569,592       —         —           (569,592       122       —           122  
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

TOTAL ASSETS

    3,781       569,988       —         49,077         424,233         1,047,079       (569,515       477,564  
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)

                     

Accounts payable

    667       —         949           (748     G       667       —           667  
              (200     H          

Accrued expenses

    2,120       —         835           (853     G       1,950       —           1,950  
              (153     I          

Accounts payable and accured expenses

    —         948       (948         —           —         —           —    

Accrued income and franchise taxes

    —         836       (836         —                 —           —    

Convertible Security

          50,000       A       (50,000     O       —         —           —    

Lease liabilities

    72       —                           72       —           72  
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Total current liabilities

    2,859       1,784       —         50,000         (51,954       2,689       —           2,689  

Non-current liabilities:

                     

Customer deposits

    2,252       —         —             —           2,252       —           2,252  

Bridge notes payable

    7,642       —         —         2,577       B       (10,219     I       —         —           —    

Deferred underwriting commissions

    —         19,320       —             (19,320     F       —         —           —    
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Total non-current liabilities

    9,894       19,320       —         2,577         (29,539       2,252       —           2,252  
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Total liabilities

    12,753       21,104       —         52,577         (81,493       4,941       —           4,941  
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

COMMITMENTS AND CONTINGENCIES

                     

Temporary equity:

                     

Series A Convertible Preferred stock

    4,634       —         —             (4,634     K       —         —           —    

Series B Convertible Preferred stock

    6,386       —         —             (6,386     K       —         —           —    

Common stock subject to possible redemption

    —         543,884       —             (543,884     J       —         —           —    

Stockholders’ equity (deficit):

                     

Founders Convertible Preferred stock

    —         —         —             —           —         —           —    

 

83


Table of Contents
Index to Financial Statements
    As of June 30, 2020           Convertible
Security
Offering
and
Convertible
Note
Issuances
                      As of June 30,
2020
                As of
June 30,
2020
 
    Fisker
(Historical)
    Spartan
(Historical)
    Reclassification
Adjustments
(Note 2)
          Pro Forma
Adjustments
(Assuming
Minimum
Redemption)
          Pro Forma
Combined
(Assuming
Minimum
Redemption)
    Pro Forma
Adjustments
(Assuming
Maximum
Redemption)
    Pro Forma
Combined
(Assuming
Maximum
Redemption)
 

Class A Common stock

    —         —         —             —         C       16       (5     P       11  
              5       E          
                    I          
              5       J          
              4       K          
              1       L          
              1       O          

Class B Common stock

    —         1       —             (1     L       13       —           13  
              13       M          

Additional paid-in capital

    849       895       —             (77     C       1,103,519       (569,510     P       534,009  
              499,995       E          
              (17,500     G          
              10,372       I          
              543,879       J          
              11,016       K          
              (13     M          
              4,104       N          
              49,999       O          

Retained earnings

    —         4,104       (4,104         —           —         —           —    

Accumulated deficit

    (20,841     —         4,104       (3,500     A       (37,069     G       (61,410     —           (61,410
              (4,104     N          
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

Total stockholders’ equity (deficit)

    (19,992     5,000       —         (3,500       1,060,630         1,042,138       (569,515       472,623  
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT

    3,781       569,988       —         49,077         424,233         1,047,079       (569,515       477,564  
 

 

 

   

 

 

   

 

 

   

 

 

     

 

 

     

 

 

   

 

 

     

 

 

 

 

84