Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.23.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Recurring Fair Value Measurements
Fair value is defined for accounting purposes 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.
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.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Earnout Shares and Private and Public Warrants
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”).
Debt Valued at Fair Value
In December 2022, Bird Global issued and sold an aggregate principal amount of $30.1 million of its 12.0% Convertible Senior Secured Notes due December 30, 2027 (together with the Share Consideration Notes, the “Notes”). The Notes were issued and sold in a private placement to certain “accredited investors” conducted pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The terms of the Notes are governed by a note purchase agreement, dated as of December 30, 2022 (the “Note Purchase Agreement”), by and among the Company, as issuer, the several purchasers from time to time party thereto (collectively, the “Note Purchasers”) and U.S. Bank Trust Company, National Association, as collateral agent (the “Collateral Agent”). The Note holders are entitled to convert the Notes into shares of Class A Common Stock at any time at a conversion rate of approximately 3,473 shares of Class A Common Stock per $1,000 principal amount of the Notes, equivalent to a conversion price of approximately $0.2879 per share, subject to specified anti-dilution adjustments, including adjustments for issuance of Class A Common Stock below the conversion price. In addition, following certain corporate events that occur prior to the maturity date, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such corporate event up to a maximum of approximately 711 shares per $1,000 principal amount of Notes. In certain circumstances, conversion will be limited unless the Company obtains stockholder approval to issue such shares.
In January 2023, the Company entered into a share purchase agreement (the "Share Purchase Agreement") with Bird Canada, Inc. (“Bird Canada”) and certain other parties thereto, which, among other things, resulted in the acquisition of all of the issued and outstanding shares of Bird Canada in exchange for the issuance by Bird Global of an aggregate principal amount of approximately $27.0 million of its 12.0% Convertible Senior Secured Notes due 2027 (the “Share Consideration Notes”), 18,204,365 shares of the Company's Class A Common Stock, and a nominal amount of cash consideration. Therefore, the total assumed long-term debt valued at fair value at the time of the acquisition was revalued at March 31, 2023 to reflect the period end fair value.
In March 2023, the Company entered into First Amendment to “Note Purchase Agreement” with the original Note Purchasers and U.S. Bank Trust Company, National Association, as collateral agent. Pursuant to the amendment to the Note Purchase Agreement, the Company issued $2.8 million of additional secured promissory notes by the “First Amendment Note Purchasers” for cash consideration. The purpose of the agreement was to use the proceeds for general corporate purposes.
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):
March 31, 2023
Level 1 Level 2 Level 3 Total
Notes(1)
$ —  $ —  $ 64,585  $ 64,585 
Earnout Shares —  —  2,461  2,461 
Switchback Founder Earn Back Shares —  —  217  217 
Warrants 190  —  401  591 
Total liabilities measured at fair value $ 190  $ —  $ 67,664  $ 67,854 
(1) See Note 8 — Notes Payable for additional information. Mark-to-market adjustments of the Notes were $4.8 million for the three months ended March 31, 2023.
December 31, 2022
Level 1 Level 2 Level 3 Total
Notes(1)
$ —  $ —  $ 30,100  $ 30,100 
Earnout Shares —  —  1,459  1,459 
Switchback Founder Earn Back Shares —  —  125  125 
Warrants 108  —  201  309 
Total liabilities measured at fair value $ 108  $ —  $ 31,885  $ 31,993 
(1) See Note 8 — Notes Payable for additional information. Mark-to-market adjustments of the Notes were immaterial for the year ended December 31, 2022.
Amounts associated with the issuance and mark-to-market adjustments of derivative liabilities are reflected in Other (expense) income, net and totaled $6.1 million of other expense and $108.6 million of other income for the three months ended March 31, 2023 and 2022, respectively.