brds-20220930

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

______________________

FORM 10-Q

______________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to ___________________

Commission File Number: 001-41019

______________________

Bird Global, Inc.

(Exact Name of Registrant as Specified in its Charter)

______________________


Delaware						86-3723155
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

392 NE 191st Street, #20388 Miami, Florida						33179
(Address of principal executive offices)						(Zip Code)

(866) 205-2442

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

______________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Class A Common Stock,
$0.0001 par value per share

BRDS

New York Stock Exchange

Warrants, each whole warrant exercisable for one share of Class A Common Stock

BRDS WS

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of October 31, 2022, there were 261,041,252 shares of the registrant’s Class A Common Stock, $0.0001 par value per share, outstanding, which includes restricted shares of our Class A Common Stock held by certain equity award holders under the Bird Global, Inc. 2021 Equity Incentive Plan, as well as restricted shares of Class A Common Stock issued upon early exercises of options, and 34,534,930 shares of the registrant’s Class X Common Stock, $0.0001 par value per share, outstanding.

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TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	5
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021 (unaudited)	6
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021 (unaudited)	7
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity for the three and nine months ended September 30, 2022 and 2021 (unaudited)	8
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (unaudited)	12
	Notes to Condensed Consolidated Financial Statements (unaudited)	14
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	49
Signatures		50

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 (as amended, the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, equity compensation, business strategy, plans, market growth, plans to exit certain markets and anticipated cost savings associated with such exits, our ability to continue as a going concern, our ability to remediate the material weakness in our internal control over financial reporting, our plans to seek additional capital, our ability to continue as a going concern, and our objectives for future operations.

The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: risks relating to the restatement of our consolidated financial statements, our recurring losses from operations, which raise substantial doubt regarding our ability to continue as a going concern, and we may need to scale back, discontinue, or cease certain or all of our operations, or seek bankruptcy protection; the potential impact of a material weakness in our internal control over financial reporting; the current macroeconomic environment, including as a result of the ongoing COVID-19 pandemic, labor and inflationary pressures, and rising interest rates, on our business, financial condition, and results of operations; our ability to cure our New York Stock Exchange (“NYSE”) price deficiency and meet the continued listing requirements of the NYSE; risks related to our relatively short operating history and our new and evolving business model, which makes it difficult to evaluate our future prospects, forecast financial results, and assess the risks and challenges we may face; our ability to achieve or maintain profitability in the future; our ability to retain existing riders or add new riders; our Fleet Managers’ ability to maintain vehicle quality or service levels; our ability to evaluate our business and prospects in the new and rapidly changing industry in which we operate; risks related to the impact of poor weather and seasonality on our business; our ability to obtain vehicles that meet our quality specifications in sufficient quantities on commercially reasonable terms; our ability to compete successfully in the highly competitive industries in which we operate; risks related to our substantial indebtedness; our ability to secure additional financing; risks related to the effective operation of mobile operating systems, networks and standards that we do not control; risks related to action by governmental authorities to restrict access to our products and services in their localities; risks related to claims, lawsuits, arbitration proceedings, government investigations and other proceedings to which we are regularly subject; risks related to compliance, market and other risks, including the ongoing conflict between Ukraine and Russia, in relation to any expansion by us into international markets; risks related to the impact of impairment of our long-lived assets; and the other important factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K/A for the year ended December 31, 2021 (the “2021 Form 10-K/A”) and Part II, Item 1A. “Risk Factors” in this Quarterly Report, and described from time to time in our future reports filed with the Securities and Exchange Commission (the “SEC”). The forward-looking statements in this Quarterly Report are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed as exhibits to this Quarterly Report with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report, whether as a result of any new information, future events or otherwise.

Unless the context otherwise requires, all references in this Quarterly Report to the “Company,” “we,” “us,” “our,” or “Bird” refer to Bird Global, Inc. and its subsidiaries. References to “Bird Global” refer to Bird Global, Inc. and references to “Bird Rides” refer to Bird Rides, Inc.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

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Bird Global, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts and number of shares)


	September 30, 2022		December 31, 2021
	(Unaudited)		(As Restated)
Assets
Current assets:
Cash and cash equivalents	$	38,529	$	128,556
Restricted cash and cash equivalents—current	48,733		30,142
Accounts receivable, net	5,582		8,397
Inventory, net	2,167		28,242
Prepaid expenses and other current assets	22,137		33,778
Total current assets	117,148		229,115
Restricted cash and cash equivalents—non current	450		1,203
Vehicle deposits	60,705		117,071
Vehicles, net	108,338		118,949
Goodwill	—		121,169
Other assets	7,377		9,754
Total assets	$	294,018	$	597,261
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	15,987	$	5,002
Accrued expenses	35,217		31,428
Deferred revenue	74,608		62,439
Notes payable	103,634		49,094
Other current liabilities	8,830		5,089
Total current liabilities	238,276		153,052
Derivative liabilities	3,616		136,196
Other liabilities	8,453		6,282
Total liabilities	250,345		295,530
Commitments and contingencies (Note 11)
Stockholders’ Equity
Class A common stock, $0.0001 par value, 1,000,000,000 shares authorized, and 257,123,608 and 238,089,017 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively, and Class X common stock, $0.0001 par value, 50,000,000 shares authorized, 34,534,930 shares issued and outstanding as of September 30, 2022 and December 31, 2021	29		27
Additional paid-in capital	1,558,790		1,475,300
Accumulated other comprehensive (loss) income	(11,678)		7,538
Accumulated deficit	(1,503,468)		(1,181,134)
Total stockholders’ equity	43,673		301,731
Total liabilities and stockholders’ equity	$	294,018	$	597,261

See Accompanying Notes to Condensed Consolidated Financial Statements

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Bird Global, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share amounts and number of shares)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
			(Restated)				(Restated)
Revenues:
Sharing	$	68,765	$	59,729	$	162,237	$	132,202
Product sales	4,094		1,379		12,762		8,806
Total revenues	72,859		61,108		174,999		141,008
Cost of revenues:
Cost of sharing, exclusive of depreciation	31,944		34,255		87,411		79,184
Depreciation on sharing vehicles	11,681		17,253		39,045		33,811
Cost of product sales	1,523		1,378		11,480		9,026
Impairment of product sales inventory	—		—		31,769		—
Total cost of revenues	45,148		52,886		169,705		122,021
Gross margin:
Sharing	25,140		8,221		35,781		19,207
Product sales	2,571		1		(30,487)		(220)
Total gross margin	27,711		8,222		5,294		18,987
Other operating expenses: (1)
General and administrative	16,876		30,837		185,919		91,981
Selling and marketing	3,177		3,392		13,587		10,880
Research and development	9,386		5,804		32,223		19,096
Impairment of assets	—		—		215,822		—
Total operating expenses	29,439		40,033		447,551		121,957
Loss from operations	(1,728)		(31,811)		(442,257)		(102,970)
Interest expense, net	(3,765)		(325)		(7,776)		(5,011)
Other (expense) income, net	(3,884)		(9,993)		128,214		(60,107)
Loss before income taxes	(9,377)		(42,129)		(321,819)		(168,088)
Provision for (benefit from) income taxes	389		(20)		515		110
Net loss	$	(9,766)	$	(42,109)	$	(322,334)	$	(168,198)
Loss per share attributable to common stockholders, basic and diluted	$	(0.03)	$	(0.92)	$	(1.18)	$	(3.69)
Weighted-average shares of common stock outstanding, basic and diluted (2)	280,905,659		51,153,109		274,289,960		49,138,273

(1)Includes stock-based compensation expense as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
General and administrative	$	(13,768)	$	1,259	$	69,343	$	3,352
Sales and marketing	560		94		2,026		375
Research and development	2,892		175		10,669		569
Stock-based compensation expense	$	(10,316)	$	1,528	$	82,038	$	4,296

(2)Weighted-average shares outstanding have been retroactively restated for the three and nine months ended September 30, 2021 to give effect to the Business Combination.

See Accompanying Notes to Condensed Consolidated Financial Statements

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Bird Global, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited, in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
			(Restated)				(Restated)
Net loss	$	(9,766)	$	(42,109)	$	(322,334)	$	(168,198)
Other comprehensive loss, net of tax:
Change in currency translation adjustment	(3,180)		(1,645)		(19,216)		(3,235)
Other comprehensive loss	(3,180)		(1,645)		(19,216)		(3,235)
Total comprehensive loss	$	(12,946)	$	(43,754)	$	(341,550)	$	(171,433)

See Accompanying Notes to Condensed Consolidated Financial Statements

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Bird Global, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity

(Unaudited, in thousands, except number of shares)

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	Redeemable Convertible Preferred Stock			Redeemable Convertible Prime Preferred Stock and Exchanged Common Stock			Redeemable Convertible Senior Preferred Stock			Founders Convertible Preferred Stock			Common Stock
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ (Deficit) Equity
Balance at December 31, 2020 (1) (As Restated)	135,225,157	$	1,044,282	—	$	—	—	$	—	3,993,432	$	—	47,713,169	$	—	$	92,654	$	9,693	$	(966,210)	$	(863,863)
Net loss (Restated)																				(76,812)		(76,812)
Issuance of Common Stock through exercise of stock options and expiration of repurchase provision for early exercises													1,592,693	—		435						435
Vesting of Common Stock													1,951,826	—								—
Stock-based compensation expense																1,485						1,485
Conversion of Redeemable Convertible Preferred Stock to Common Stock	(135,225,157)	(1,044,282)											135,225,157	—		1,044,282						1,044,282
Conversion of Common Stock to Redeemable Convertible Prime Preferred Stock and Exchanged Common Stock				135,225,157	1,044,282								(135,225,157)	—		(1,044,282)						(1,044,282)
Issuance of Redeemable Convertible Senior Preferred Stock, net of derivatives and issuance costs, and accrual of paid-in kind dividends							19,833,612	80,570								(2,030)						(2,030)
Foreign currency translation adjustment																		(2,325)				(2,325)
Balance at March 31, 2021 (As Restated)	—	$	—	135,225,157	$	1,044,282	19,833,612	$	80,570	3,993,432	$	—	51,257,688	$	—	$	92,544	$	7,368	$	(1,043,022)	$	(943,110)
Net loss (Restated)																				(49,276)		(49,276)
Issuance of Common Stock through exercise of stock options and expiration of repurchase provision for early exercises													1,322,254	—		18						18
Vesting of Common Stock													1,951,825	—								—
Stock-based compensation expense																1,283						1,283
Issuance of Redeemable Convertible Senior Preferred Stock, net of derivatives and issuance costs, and accrual of paid-in kind dividends							5,880,074	46,897								(6,328)						(6,328)
Foreign currency translation adjustment																		735				735
Balance at June 30, 2021 (As Restated)	—	$	—	135,225,157	$	1,044,282	25,713,687	$	127,467	3,993,432	$	—	54,531,766	$	—	$	87,517	$	8,103	$	(1,092,298)	$	(996,678)
Net loss (Restated)																				(42,109)		(42,109)
Issuance of Common Stock through exercise of stock options and expiration of repurchase provision for early exercises													738,820	—		9						9
Vesting of Common Stock													96,469	—								—
Stock-based compensation expense																1,528						1,528
Accrual of paid-in kind dividends								4,940								(4,940)						(4,940)
Foreign currency translation adjustment																		(1,645)				(1,645)
Balance at September 30, 2021 (As Restated)	—	$	—	135,225,157	$	1,044,282	25,713,687	$	132,407	3,993,432	$	—	55,367,055	$	—	$	84,114	$	6,458	$	(1,134,408)	$	(1,043,836)

(1) Shares of preferred stock and common stock have been retroactively restated to give effect to the Business Combination.

See Accompanying Notes to Condensed Consolidated Financial Statements

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Bird Global, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity

(Unaudited, in thousands, except number of shares)


	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ (Deficit) Equity
Balance at December 31, 2021 (As Restated)	272,623,947	$	27	$	1,475,300	$	7,538	$	(1,181,134)	$	301,731
Net income (Restated)								7,748		7,748
Issuance of Common Stock through exercise of stock options and expiration of repurchase provision for early exercises	843,591	—		169						169
Issuance of Common Stock through settlement of restricted stock units	1,817,226	—								—
Shares of Common Stock withheld related to net share settlement	(607,936)	—		(1,903)						(1,903)
Stock-based compensation expense				48,704						48,704
Foreign currency translation adjustment						(4,473)				(4,473)
Balance at March 31, 2022 (As Restated)	274,676,828	$	27	$	1,522,270	$	3,065	$	(1,173,386)	$	351,976
Net loss (Restated)								(320,316)		(320,316)
Issuance of Common Stock through exercise of stock options and expiration of repurchase provision for early exercises	228,696	—		88						88
Issuance of Common Stock through settlement of restricted stock units	5,612,054	1								1
Shares of Common Stock withheld related to net share settlement	(144,428)	—		(108)						(108)
Issuance of Commitment Fee Shares	72,401	—		56						56
Stock-based compensation expense				43,650						43,650
Foreign currency translation adjustment						(11,563)				(11,563)
Balance at June 30, 2022 (As Restated)	280,445,551	$	28	$	1,565,956	$	(8,498)	$	(1,493,702)	$	63,784

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	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ (Deficit) Equity
Net loss								$	(9,766)	$	(9,766)
Issuance of Common Stock through exercise of stock options and expiration of repurchase provision for early exercises	834,234	—		114						114
Issuance of Common Stock through settlement of restricted stock units	3,943,383	—								—
Shares of Common Stock withheld related to net share settlement	(367,031)	—		(150)						(150)
Issuance of Common Stock under the Purchase Agreement	6,730,000	1		3,154						3,155
Issuance of Commitment Fee Shares	72,401	—		32						32
Stock-based compensation expense				(10,316)						(10,316)
Foreign currency translation adjustment						(3,180)				(3,180)
Balance at September 30, 2022	291,658,538	$	29	$	1,558,790	$	(11,678)	$	(1,503,468)	$	43,673

See Accompanying Notes to Condensed Consolidated Financial Statements

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Bird Global, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)


	Nine Months Ended September 30,
	2022		2021
			(Restated)
Cash flows from operating activities
Net loss	$	(322,334)	$	(168,198)
Adjustments to reconcile net loss to net cash used in operating activities:
Issuance of and mark-to-market adjustments of derivative liabilities	(132,580)		53,622
Impairment of assets	215,822		—
Impairment of product sales inventory	31,769		—
Depreciation and amortization	40,965		37,085
Non-cash vehicle expenses	10,328		4,087
Stock-based compensation expense	82,038		4,296
Loss on extinguishment of debt	—		2,304
Amortization of debt issuance costs and discounts	2,348		1,321
Bad debt expense	5,096		1,430
Other	1,025		233
Changes in assets and liabilities:
Accounts receivable	(2,327)		886
Inventory	14,686		(8,613)
Prepaid expenses and other current assets	(16,912)		(9,395)
Other assets	83		(12)
Accounts payable	10,514		(2,331)
Deferred revenue	11,174		12,905
Accrued expenses and other current liabilities	4,602		6,485
Other liabilities	(1,200)		(2,458)
Net cash used in operating activities	(44,903)		(66,353)
Cash flows from investing activities
Purchases of property and equipment	(437)		(60)
Purchases of vehicles	(86,349)		(115,410)
Net cash used in investing activities	(86,786)		(115,470)
Cash flows from financing activities
Proceeds from borrowings, net of issuance costs	109,106		17,552
Debt repayments	(54,706)		(40,610)
Proceeds from issuance of redeemable convertible senior preferred stock and derivatives, net of issuance costs	—		207,814
Payment for settlements of warrants	—		(600)
Payment for taxes related to net share settlement	(2,161)		—
Proceeds from the issuance of common stock	372		462
Net cash provided by financing activities	52,611		184,618
Effect of exchange rate changes on cash	6,889		6,273
Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents	(72,189)		9,068
Cash and cash equivalents and restricted cash and cash equivalents
Beginning of period	159,901		53,767
End of period	$	87,712	$	62,835
Components of cash and cash equivalents and restricted cash and cash equivalents
Cash and cash equivalents	38,529		38,667
Restricted cash and cash equivalents	49,183		24,168
Total cash and cash equivalents and restricted cash and cash equivalents	$	87,712	$	62,835

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See Accompanying Notes to Condensed Consolidated Financial Statements

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Bird Global, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Organization and Summary of Significant Accounting Policies

Company Overview

Bird Global, Inc. (“Bird Global” and, together with its subsidiaries, “Bird”, the “Company”, “our”, or “we”) was incorporated in Delaware on May 4, 2021 as a wholly owned subsidiary of Bird Rides, Inc. (“Bird Rides”). Bird Global was formed for the purpose of completing the transactions contemplated by the Business Combination Agreement, dated May 11, 2021 (as amended, the “Business Combination Agreement” and the transactions contemplated thereby, the “Business Combination”), by and among Switchback II Corporation (“Switchback”), Maverick Merger Sub Inc., a direct and wholly owned subsidiary of Switchback (“Merger Sub”), Bird Rides, and Bird Global.

Bird is a micromobility company engaged in delivering electric transportation solutions for short distances. The Company partners with cities to bring lightweight, electric vehicles to residents and visitors in an effort to replace car trips by providing an alternative sustainable transportation option. Bird’s offerings include its core vehicle-sharing business and operations (“Sharing”), and sales of Bird-designed vehicles for personal use (“Product Sales”).

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements (“condensed consolidated financial statements”) include the accounts of the Company and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting disclosure rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2021 (the "2021 Form 10-K/A"). All intercompany balances and transactions are eliminated upon consolidation.

The consolidated balance sheet as of December 31, 2021 included herein was derived from the audited annual consolidated financial statements as of that date. The condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive loss, stockholders’ (deficit) equity, and cash flows for the periods presented, but are not necessarily indicative of the results of operations to be anticipated for any future annual or interim period.

There have been no material changes to the Company’s significant accounting policies as described in the audited consolidated financial statements as of December 31, 2021.

Certain amounts from prior periods have been reclassified to conform to the current period’s presentation. None of these reclassifications had a material impact on the Company's condensed consolidated financial statements.

Going Concern

The Company has incurred recurring losses and negative cash flows since inception and has an accumulated deficit of $1,503.5 million as of September 30, 2022. For the nine months ended September 30, 2022, the Company used approximately $44.9 million of cash in operations. The Company’s ability to fund working capital, make capital expenditures, and service its debt will depend on its ability to generate cash from operating activities, which is subject to its future operating success, and obtain financing on reasonable terms, which is subject to factors beyond its control, including general economic, political, and financial market conditions. The capital markets have in the past experienced, are currently experiencing, and may in the future experience, periods of volatility that could impact the availability and cost of equity and debt financing and there can be no assurances that such financing will be available to the Company on satisfactory terms, or at all. As of September 30, 2022, the Company had $38.5 million in unrestricted cash and cash equivalents which, without additional funding, will not be sufficient to meet the Company’s obligations within the next twelve months from the date of issuance of these condensed consolidated financial statements. If the Company is unable to raise additional capital or generate cash flows necessary to expand its operations and invest in continued innovation, it may not be able to

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compete successfully and may need to scale back or discontinue certain or all of its operations in order to reduce costs or seek bankruptcy protection, which would harm its business, financial condition, and results of operations. As such, these factors raise substantial doubt about the Company’s ability to continue as a going concern.

Accordingly, the Company plans to continue to closely monitor its operating forecast, reduce its operating expenses, and pursue additional sources of outside capital. On October 18, 2022, the Company announced plans to fully exit three unprofitable European countries (Germany, Sweden, and Norway), and to wind down operations in several dozen additional, primarily small to mid-sized unprofitable markets across the United States and Europe, the Middle East and Africa (“EMEA”), as part of its previously announced business plan to reduce costs. Along with this global footprint realignment, the Company is targeting additional reductions in its operating expenses.

The condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Therefore, the condensed consolidated financial statements for the three and nine months ended September 30, 2022 do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the substantial doubt about the Company’s ability to continue as a going concern.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements, the reported amounts of revenues and expenses during the reporting period, and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements. On an ongoing basis, management evaluates estimates, which are subject to significant judgment, including, but not limited to, those related to useful lives associated with vehicles, valuation of goodwill, Product Sales inventory and inventory deposits, and other long-lived assets, assumptions utilized in the valuation of derivative liabilities and certain equity awards, loss contingencies, valuation allowance for deferred income taxes, and the collectability of accounts receivable. Actual results could differ from those estimates.

Inventory, net

Inventory consists of vehicles and spare parts available for sale, valued at the lower of cost based on an average cost method or net realizable value (“lower of cost or net realizable value”). This valuation requires the Company to make judgments, based on currently available information. The average cost of inventory consists of the price paid for the aforementioned vehicles and spare parts plus freight from manufacturers and any customs or duties incurred.

During the nine months ended September 30, 2022, given our initiative announced in May 2022 to slow the expansion of our Product Sales portfolio offering and realign our resources to prioritize Sharing operations within our existing regions, combined with the current adverse macroeconomic environment, including a shift in consumer demand away from longer lead time discretionary items, the Company recognized a lower of cost or net realizable value impairment on Product Sales inventory of $31.8 million, which is reflected in the condensed consolidated statements of operations.

Contract Terminations

Our capital expenditure cycle often requires us to pay deposits to secure orders for the Product Sales business. The Company records deposits based on the amount of cash paid to secure future production, and evaluates the assets for impairment, as needed.

During the nine months ended September 30, 2022, given our initiative announced in May 2022 to slow the expansion of our Product Sales portfolio offering and realign our resources to prioritize Sharing operations within our existing regions, combined with the current adverse macroeconomic environment, including a shift in consumer demand away from longer lead time discretionary items, the Company recognized an impairment on certain contractual deposits of $14.7 million, which is included within Impairment of assets in the condensed consolidated statements of operations.

Evaluation of Long-Lived Assets for Impairment

The Company evaluates its held-and-used long-lived assets for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset or asset group (collectively, the “asset group”) may not be recoverable. The Company measures the recoverability of the asset group by comparing the carrying amount of such asset group to the future undiscounted cash flows it expects the asset group to generate. If the Company considers the asset

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group to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset group exceeds its fair value.

During the nine months ended September 30, 2022, the Company estimated the recoverability of certain vehicle deposits, vehicles, and spare parts within the North America, EMEA, and Other asset groups by comparing the estimated fair value of each asset group to its carrying value. Due to the sustained decline in the Company’s market capitalization and current adverse macroeconomic environment, the Company recorded an impairment charge of $89.4 million within the EMEA and Other asset groups, which is included within Impairment of assets in the condensed consolidated statements of operations.

Recently Issued Accounting Standards Not Yet Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02—Leases (Topic 842), which introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in the new revenue recognition standard. The FASB also subsequently issued guidance amending and clarifying various aspects of the new leases guidance. The new leasing standard represents a wholesale change to lease accounting for lessees and requires additional disclosures regarding leasing arrangements. This update is effective for annual periods beginning January 1, 2022, and interim periods beginning January 1, 2023, with early adoption permitted.

The Company plans to adopt ASU 2016-02 for the annual period beginning January 1, 2022, using a prospective adoption method in accordance with ASU 2018-11—Leases (Topic 842): Targeted Improvements, which eliminated the requirement to present prior year comparative lease disclosures upon adoption of ASU 2016-02. The Company is continuing to assess the potential impacts of ASU 2016-02 on its consolidated financial statements and related disclosures. While the Company anticipates the guidance will result in an increase in its assets and liabilities as certain operating lease commitments will be subject to the new standard and recognized as right-of-use assets and lease liabilities, the Company does not anticipate any material changes to its revenue recognition policy.

The Company does not believe there are any other recently issued and effective or not yet effective standards or pronouncements that would have or are expected to have any significant effect on the Company’s financial position, cash flows or results of operations.

Restatement of Condensed Consolidated Financial Statements

In connection with the preparation of this Quarterly Report, the Company identified an error related to its business system configuration that impacted the recognition of revenue on certain trips completed by customers of its Sharing business ("Rides") for which collectability was not probable. Specifically, for customers with insufficient preloaded "wallet" balances, following the completion of Rides our business systems recorded revenue for uncollectible balances. The error resulted in an overstatement of Sharing revenue in the condensed consolidated statements of operations for the nine months ended September 30, 2022 and the three and nine months ended September 30, 2021, and an understatement of deferred revenue in the condensed consolidated balance sheet as of December 31, 2021. We also corrected certain other previously identified immaterial errors included in the financial statements as of and for the three and nine months ended September 30, 2021 and 2020, and as of and for the year ended December 31, 2020, as disclosed in the 2021 Form 10-K/A.

Impact of Restatement

The correction of this misstatement resulted in a decrease in Sharing revenue of $12.5 million for the nine months ended September 30, 2022 and $4.3 million and $10.1 million for the three and nine months ended September 30, 2021, respectively, in the condensed consolidated statements of operations, and an increase in deferred revenue of $19.1 million as of December 31, 2021 in the condensed consolidated balance sheets.

Note 2 – Fair Value Measurements

Recurring Fair Value Measurements

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (referred to as the “exit price”). Fair value is a market-based measurement that is determined based upon assumptions that market participants would use in pricing an asset or liability, including consideration of nonperformance risk.

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The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market.

•Level 1: Inputs that reflect quoted prices for identical assets or liabilities in active markets that are observable.

•Level 2: Inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

•Level 3: Inputs that are unobservable to the extent that observable inputs are not available for the asset or liability at the measurement date and include management’s judgment about assumptions market participants would use in pricing the asset or liability.

Derivatives Liabilities

In connection with the execution of the Business Combination Agreement, the Company designated 30.0 million shares of Class A Common Stock (“Earnout Shares”) to be issued to all Eligible Equity Holders (as defined below), subject to occurrence during the Earnout Period (as defined below) of the Earnout Triggering Events (as defined below). An “Eligible Equity Holder” means a holder of a share of common stock, including a share of restricted stock, a stock option or a restricted stock unit (“RSU”) of Bird Rides, in each case, immediately prior to the consummation of the Business Combination. The “Earnout Period” means the five-year period ending on November 4, 2026. The “Earnout Triggering Events” are tied to the daily volume-weighted average sale price of one share of Class A Common Stock quoted on the New York Stock Exchange (“NYSE”) for any ten trading days within any 20 consecutive trading day period within the Earnout Period.

NGP Switchback II, LLC and certain officers and directors of Switchback entered into an amendment to the letter agreement, dated January 7, 2021, pursuant to which, among other things, the parties agreed, effective upon the consummation of the Business Combination, to subject to potential forfeiture (on a pro rata basis) an aggregate of 2.0 million shares of Class A Common Stock held by them (the “Switchback Founder Earn Back Shares”), which will cease to be subject to potential forfeiture based upon events tied to the average reported last sale price of one share of our Class A Common Stock quoted on the NYSE for any ten trading days within any 20 consecutive trading day period within the Earnout Period.

Immediately after giving effect to the Business Combination, the Company assumed 6.6 million private placement warrants from Switchback (the “Private Placement Warrants”) and 6.3 million public warrants from Switchback (the “Public Warrants”). In addition, there were 0.1 million warrants outstanding to purchase shares of Class A Common Stock (collectively with the Private Placement Warrants and the Public Warrants, the “Warrants”).

The Company’s derivative liabilities are remeasured at fair value through Other (expense) income, net at each reporting period. Such fair value measurements are predominantly based on Level 3 inputs, with the exception of the Public Warrants, which are based on Level 1 inputs. An increase or decrease in any of the observable inputs in isolation, such as the share price quoted on the NYSE, could result in a material increase or decrease in our estimate of fair value. Other unobservable inputs are less sensitive to the valuation in the respective reporting periods, as a result of the primary weighting on the share price and other observable inputs. In the future, depending on the weight of evidence and valuation approaches used, these or other inputs may have a more significant impact on our estimate of fair value.

The following tables detail the fair value measurements of derivative liabilities that are measured at a fair value on a recurring basis (in thousands):


	September 30, 2022
	Level 1		Level 2		Level 3		Total
Earnout Shares	$	—	$	—	$	2,616	$	2,616
Switchback Founder Earn Back Shares	—		—		229		229
Warrants	373		—		398		771
Derivative liabilities	$	373	$	—	$	3,243	$	3,616

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	December 31, 2021
	Level 1		Level 2		Level 3		Total
Earnout Shares	$	—	$	—	$	106,003	$	106,003
Switchback Founder Earn Back Shares	—		—		9,087		9,087
Warrants	6,515		—		14,591		21,106
Derivative liabilities	$	6,515	$	—	$	129,681	$	136,196

Amounts associated with the issuance and mark-to-market adjustments of derivative liabilities are reflected in Other (expense) income, net and totaled $2.4 million of other expense and $6.4 million of other expense for the three months ended September 30, 2022 and 2021, respectively, and $132.6 million of other income and $53.6 million of other expense for the nine months ended September 30, 2022 and 2021, respectively.

Note 3 –Vehicles, net

The Company’s vehicles balance consists of the following (in thousands):


	September 30, 2022		December 31, 2021
Deployed vehicles	$	145,521	$	93,192
Undeployed vehicles	22,757		46,867
Spare parts	33,827		10,009
Less: Accumulated depreciation	(45,382)		(31,119)
Less: Impairment of vehicles and spare parts	(48,385)		—
Vehicles, net	$	108,338	$	118,949

Depreciation on Sharing vehicles was $11.7 million and $17.3 million for the three months ended September 30, 2022 and 2021, respectively, and $39.0 million and $33.8 million for the nine months ended September 30, 2022 and 2021, respectively.

Note 4 –Prepaid Expenses and Other Current Assets

The Company’s prepaid expenses and other current assets consists of the following (in thousands):


	September 30, 2022		December 31, 2021
Product sales inventory deposits, net	$	3,096	$	18,628
Tariff reimbursement receivable	7,666		—
Other prepaid expenses and other current assets	11,375		15,150
Prepaid expenses and other current assets	$	22,137	$	33,778

Note 5 – Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations and is allocated to the reporting units expected to benefit from the business combinations. The Company tests goodwill for impairment annually during the fourth quarter, or whenever events or changes in circumstances indicate that the fair value of net assets has decreased below its carrying value.

During the nine months ended September 30, 2022, due to the sustained decline in the Company’s market capitalization and current adverse macroeconomic environment, the Company completed a quantitative impairment test for the North America and EMEA reporting units as of June 30, 2022, comparing the estimated fair value of each reporting unit to its carrying value, including goodwill. As a result, the Company impaired the entire carrying value of North

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America goodwill of $1.3 million and EMEA goodwill of $110.4 million, which are included within Impairment of assets in the condensed consolidated statements of operations.

As part of the Company’s impairment analysis, the fair value of its reporting units were determined using both the income and market approaches. The income approach utilizes the discounted cash flow method, and the market approach utilizes the guideline company transactions method. The determination of the fair value of the Company’s reporting units requires management to make a number of estimates and assumptions, which include, but are not limited to: the projected future business and financial performance of the Company’s reporting units; forecasts of revenue, operating income, depreciation, amortization, and capital expenditures; discount rates; terminal growth rates; the selection of appropriate peer group companies; and consideration of the impact of the current adverse macroeconomic environment.

Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates.

Note 6 – Income Taxes

The Company computes its quarterly income tax provision and resulting effective tax rate by using a forecasted annual effective tax rate and adjusting for any discrete items arising during the quarter. The Company’s effective tax rate was (4.1)% and 0.0% for the three months ended September 30, 2022 and 2021, respectively, and (0.2)% and (0.1)% for the nine months ended September 30, 2022 and 2021, respectively.

The effective tax rate differs from the U.S. statutory tax rate primarily due to a valuation allowance against our U.S. deferred tax assets and majority of foreign deferred tax assets. The Company expects to maintain this valuation allowance until it becomes more likely than not that the benefit of our deferred tax assets will be realized by way of expected future taxable income.

Note 7 – Notes Payable

Apollo Vehicle Financing Facility

In April 2021, the Company’s wholly owned consolidated special purpose vehicle entity (the “SPV”) entered into a credit agreement (the “Apollo Credit Agreement”) with Apollo Investment Corporation, as a lender, and MidCap Financial Trust, as a lender and administrative agent, to allow the SPV to borrow up to $40.0 million (the “Vehicle Financing Facility”) with no right to re-borrow any portion of the Vehicle Financing Facility that is repaid or prepaid. The Vehicle Financing Facility includes a repayment mechanism tied directly to revenue generation by vehicles on lease by the SPV to Bird Rides under an intercompany leasing arrangement (the “Scooter Lease”).

In October 2021, the SPV entered into Amendment No. 2 to the Apollo Credit Agreement which, among other things, increased the commitments provided by the lenders from $40.0 million to $150.0 million, with any extension of credit above $40.0 million subject to the consummation of the Business Combination. In November 2021, the transactions contemplated by the Business Combination Agreement were consummated, resulting in access to extensions of credit up to $150.0 million under the Vehicle Financing Facility. In April 2022, the SPV entered into Amendment No. 3 to the Apollo Credit Agreement which, among other things, permits borrowings in respect of scooters located in the United Kingdom, European Union, and Israel up to a sub-limit of $50.0 million (the “EMEA Loans”), in addition to borrowings in respect of scooters located in the United States (the “U.S. Loans”). As amended, the Apollo Credit Agreement continues to allow the SPV to borrow up to the remaining availability under the maximum commitment of $150.0 million, both through U.S. Loans as well as the EMEA Loans, the proceeds of which may be used for general corporate purposes. As of September 30, 2022, the Company had $9.0 million of availability under the Vehicle Financing Facility.

The Company drew down $92.2 million during the nine months ended September 30, 2022. The outstanding principal balance under the Vehicle Financing Facility as of September 30, 2022 was $92.1 million.

The Vehicle Financing Facility is secured by a first priority perfected security interest in vehicles contributed by Bird Rides to the SPV, collections from revenue generated by vehicles subject to the facility, and an account related to such collections and a reserve account (collectively, “Collateral”). As of September 30, 2022, the Company maintained $18.5 million in such reserve account, which is classified as restricted cash and cash equivalents—current in the condensed consolidated balance sheets.

In July 2022, the SPV entered into Amendment No. 5 to the Apollo Credit Agreement which, among other things, transitioned the interest rate calculation from the London Inter-bank Offered Rate to the Secured Overnight Financing Rate (“SOFR”). The outstanding Vehicle Financing Facility balances bear interest at the SOFR, which is calculated as a per

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annum rate of interest equal to the greater of (a) 1.00% and (b) the sum of (x) SOFR plus (y) 0.1% (10 basis points), plus a margin of 7.5% that is accrued and paid by the Company on a monthly basis.

The maturity date of the Vehicle Financing Facility is November 30, 2024 (“Final Maturity Date”). On the fourth business day of each month prior to the Final Maturity Date, the Company is required to repay principal outstanding under the Vehicle Financing Facility based on a preset monthly amortization schedule (such amount, the “Amortization Amount”). In addition, on the fourth business day of each of January, April, July, and October, the Company is required to repay an additional amount of principal outstanding under the Vehicle Financing Facility to the extent 50% of revenues generated from the underlying Collateral is greater than the sum of the Amortization Amounts due for the preceding quarter. All outstanding Vehicle Financing Facility balances will be due and payable as previously stated, unless the commitments are terminated earlier, or if an event of default occurs (or automatically in the case of certain bankruptcy-related events of default).

The Apollo Credit Agreement includes certain customary representations, warranties, affirmative and negative financial and non-financial covenants, events of default, and indemnification provisions. The primary negative covenant is a limitation on liens against vehicles included in the underlying Collateral, which restricts the Company from selling, assigning, or disposing of any Collateral contributed in connection with the Apollo Credit Agreement. The primary affirmative covenant is a requirement to provide monthly reports within 30 days after the end of each fiscal month and audited annual financial statements within a specified time. The Scooter Lease includes two financial covenants, namely, a minimum liquidity requirement and a minimum tangible net worth requirement, in each case calculated as of the last business day of each calendar month. The Company is currently in compliance with all the terms and covenants of the Apollo Credit Agreement and the Scooter Lease.

Issuance costs related to the Apollo Credit Agreement of $5.9 million were capitalized as a deferred asset and are amortized over the term of the Apollo Credit Agreement. In accordance with the terms outlined in the agreements, the Company made contractual principal payments totaling $48.9 million during the nine months ended September 30, 2022.

On October 7, 2022, subsequent to the end of the third quarter, the SPV entered into Amendment No. 6 to the Apollo Credit Agreement (“Amendment No. 6”), which, among other things, (a) waived the requirement for the SPV to maintain a reserve account in favor of the Administrative Agent concurrently with a $15.0 million prepayment of outstanding loans made using the cash balance in the reserve account, (b) amended the calculation of the monthly amortization amount from a percentage of outstanding loans to a seasonally-adjusted flat dollar amount per month, (c) waived the quarterly revenue-based amortization payments due in October 2022 and January 2023 and provided a mechanism to reduce or waive the quarterly revenue-based amortization payment due in April 2023, (d) limited the number of scooters included in the calculation of each quarterly revenue-based amortization payment to those scooters necessary to meet the then applicable loan-to-cost financial covenant, and (e) provided for the post-closing waiver of the requirement to maintain a $25.0 million cash-collateralized letter of credit in favor of the Administrative Agent in connection with a $25.0 million prepayment of outstanding loans made using the cash that previously secured the letter of credit. As a result of these prepayments and seasonally-adjusted flat dollar amount payments, subsequent to September 30, 2022, the Company made contractual payments totaling $46.0 million, of which $43.5 million were made from our restricted cash and cash equivalents balance, reducing the outstanding principal balance under the Vehicle Financing Facility to $46.1 million as of November 17, 2022. Pursuant to Amendment No. 6, the amount available under the Apollo Vehicle Financing Facility was reduced to $5.0 million.

In addition, on October 7, 2022, the SPV entered into Amendment No. 3 to the Scooter Lease which, among other things, amended the minimum liquidity and minimum tangible net worth financial covenants.

In connection with Amendment No. 6, (a) Bird Rides International amended the EMEA Guaranty and Pledge Agreement, dated as of May 18, 2022, to, among other things, amend the guaranty provided pursuant to the Existing EMEA Guaranty to guarantee all outstanding loans under the Apollo Credit Agreement, and (b) Bird Rides entered into the Parent Guaranty, pursuant to which, among other things, Bird Rides provides an unsecured guaranty in respect of all outstanding loans under the Apollo Credit Agreement.

Interest Expense

Interest expense was $3.8 million and $0.3 million for the three months ended September 30, 2022 and 2021, respectively, and $7.9 million and $2.7 million for the nine months ended September 30, 2022 and 2021, respectively.

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Note 8 – Common Stock

Common Stock

As of September 30, 2022, the Company has the authority to issue 1.0 billion shares of Class A Common Stock, 10.0 million shares of Class B Common Stock, and 50.0 million shares of Class X Common Stock. As of September 30, 2022, the Company had 257.1 million and 34.5 million shares of Class A Common Stock and Class X Common Stock, respectively, issued and outstanding. As of September 30, 2022, there were no shares of Class B Common Stock issued and outstanding. Shares of restricted stock, including restricted stock issued upon an early exercise of an option that has not vested, are excluded from the number of shares of common stock issued and outstanding because the grantee is not entitled to the rewards of share ownership until such vesting occurs.

Holders of outstanding common stock are entitled to dividends when and if declared by our board of directors, subject to the rights of the holders of all classes of preferred stock outstanding having priority rights. No dividends have been declared by the Company’s board of directors from inception through September 30, 2022.

Except as otherwise expressly provided in the Amended and Restated Certificate of Incorporation of Bird Global or applicable law, each holder of Class X Common Stock has the right to 20 votes per share of Class X Common Stock outstanding and held of record by such holder, and each holder of Class A Common Stock or Class B Common Stock has the right to one vote per share of Class A Common Stock or Class B Common Stock outstanding and held of record by such holder.

Standby Equity Purchase Agreement

In May 2022, the Company entered into a Standby Equity Purchase Agreement (the “Purchase Agreement”) with YA II PN, Ltd. (“Yorkville”). Pursuant to the Purchase Agreement, the Company has the right, but not the obligation, to sell to Yorkville up to $100.0 million of its shares of Class A Common Stock at any time during the 36 months following the execution of the Purchase Agreement, subject to the terms of the Purchase Agreement. Each sale that the Company requests under the Purchase Agreement (an “Advance”) may be for a number of shares of Class A Common Stock with an aggregate value of up to $20.0 million, subject to certain volume limitations and other conditions set forth in the Purchase Agreement. In no event is Yorkville obligated to purchase any shares that would result in it owning more than 4.99% of the then-outstanding shares of Class A Common Stock. Moreover, under the applicable NYSE rules, in no event will the Company issue to Yorkville shares that, in the aggregate, would exceed 19.99% of the Company’s outstanding common stock as of the date of the Purchase Agreement (the “Exchange Cap”) unless the Company has received stockholder approval for such issuance or such issuance is otherwise permitted by applicable NYSE rules.

Yorkville’s obligation to purchase shares of Class A Common Stock pursuant to the Purchase Agreement is subject to a number of conditions, including that a registration statement (the “Registration Statement”) be filed with the SEC, registering the resale of the Commitment Fee Shares (as defined below) and the shares to be issued pursuant to any Advance under the Securities Act of 1933, and that the Registration Statement is declared effective by the SEC. In May 2022, the Registration Statement was filed with and declared effective by the SEC.

As consideration for Yorkville’s commitment to purchase shares of Class A Common Stock at the Company’s direction upon the terms and subject to the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, the Company committed to issue to Yorkville 0.2 million shares of Class A Common Stock (the “Commitment Fee Shares”) in three equal installments within six months of execution of the Purchase Agreement.

In May 2022, pursuant to the terms and conditions set forth in the Purchase Agreement, the Company requested and received a pre-advance loan (“Pre-Advance Loan”) from Yorkville of $21.0 million. The Pre-Advance Loan is evidenced by a promissory note (the “Promissory Note”), which will mature on December 15, 2022. The Promissory Note accrues interest at a rate of 0%, but was issued with 4.76% original issue discount, and will be repaid in equal monthly installments beginning on the third month following the date of the Pre-Advance Loan. The Promissory Note may be repaid with the proceeds of an Advance or repaid in cash and, if repaid in cash, together with a 2% premium. The outstanding principal balance under the Promissory Note as of September 30, 2022 was $12.1 million.

During the three months ended September 30, 2022, the Company sold 6.7 million shares of its Class A Common Stock for proceeds of $3.2 million under the terms of the Purchase Agreement. All proceeds were use