Electrical automobile startup Fisker is dealing with new liquidity questions after a brief vendor’s report Thursday claimed the corporate’s funds are “tied up.”

Fisker says it has loads of money, about $824 million as of Sept. 30. However undisclosed authorized restrictions might imply the EV startup cannot entry a lot of that money hoard, forcing it to subject new inventory to boost funds, brief vendor Fuzzy Panda Analysis wrote within the report.

Shares of Fisker fell about 5% following the report’s launch on Thursday.

In accordance with the report, a lot of Fisker’s money stability is tied up through financial institution ensures on behalf of Magna Worldwide, the auto components large that started constructing Fisker’s Ocean SUV below contract final month. The report additionally alleges the design of the Ocean is predicated on that of an electrical SUV that Magna designed with a Chinese language automaker, with not less than 80% of components carried over. The report cites unidentified former workers of Fisker and Magna as its sources.

Fisker strongly denied the report’s key allegations.

“Fisker Inc. doesn’t have a financial institution assure with Magna, and Fisker owns the mental property for the Fisker Ocean platform,” the automaker mentioned in a press release after the U.S. markets closed on Thursday. “The Ocean platform doesn’t have 80 p.c carryover components from some other platform.”

Fisker mentioned it has despatched a cease-and-desist letter to Fuzzy Panda, and that it’ll “take instant and aggressive motion” to handle the brief vendor’s “false and deceptive claims.”

Entry to money is essential for any automaker. Between manufacturing unit tooling and engineering prices, bringing a brand new mannequin to market can price a billion {dollars} or extra — and far of that complete must be spent earlier than a single new automobile ships. Established automakers usually preserve money reserves of $10 billion or extra to make sure that they will proceed to convey new merchandise to market if a recession takes a chew out of their income.

For a startup like Fisker, a money reserve is vital to its success. With a possible downturn looming, that money has supplied some consolation to its traders. But when the corporate cannot entry it, that consolation could possibly be fleeting.

Fuzzy Panda estimates not less than $790 million of Fisker’s money is pledged to make sure that Magna is paid for manufacturing unit tooling, manufacturing prices and its contractually assured margins, a complete of about €2,700 ($2,840) per automobile. Fisker mentioned final month that it expects to construct 42,400 Oceans by the tip of 2023.

Due to the ensures, the brief vendor wrote, Fisker has been compelled to make use of “at-the-market” inventory choices to proceed funding its operations as an alternative of tapping its money.

In an “at-the-market” providing, or ATM, an organization points new shares and sells them through the open market, on the prevailing value. Fisker filed a registration assertion with the Securities and Change Fee in Might that permits it to boost a complete of $2 billion from ATMs over time.

Fisker mentioned it raised $118 million through ATMs within the third quarter, however Fuzzy Panda added the EV maker might want to increase “considerably more money” through that facility.

The report cites a variety of indicators that Fisker has been transferring to preserve money since early in 2022, together with a observe that the corporate’s employee-lunch program was “downgraded from high-end salads to largely pizza.” (Fisker mentioned in a press release it’s “joyful that we are able to proceed to supply our workers lunch at a time when many startups are struggling.”)

Fuzzy Panda mentioned it has a brief place in Fisker’s shares. The agency beforehand revealed comparable experiences about Electrical Final Mile Options, which filed for chapter in June, and Ohio-based electrical van maker Workhorse Group.