Electric vehicle startup Fisker, which recently experienced a 3.53% increase in its stock, has enlisted the expertise of restructuring advisers to explore the possibility of a bankruptcy filing, according to sources familiar with the situation.

Facing a precarious financial position, Fisker has engaged the services of financial adviser FTI Consulting and the law firm Davis Polk to navigate potential restructuring options, insiders revealed.

The company, which disclosed a risk of cash depletion within the current year, reported sales of $273 million in the previous year alongside a debt exceeding $1 billion.

In a recent disclosure, Fisker issued a cautionary note regarding its operational continuity, citing “substantial doubt” about its ability to sustain business operations, the Wall Street Journal reported.

Efforts are underway to secure additional funding from investors and identify a new manufacturing partner within the United States.

Neither Fisker nor FTI Consulting provided comments on the matter, and Davis Polk has yet to respond to inquiries.

Following reports of the company’s engagement with restructuring firms, Fisker’s shares plummeted by over 46% in after-hours trading on Wednesday, as reported by The Wall Street Journal.

Written by B.C. Begley