Bird Global, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Acquisitions

Acquisitions

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Skinny Labs, Inc. (“Spin”)

Effective as of September 19, 2023, the Company entered into the Spin Acquisition Agreement with Spin, acquiring 100% of their stock in exchange for agreed upon consideration of approximately $19 million before adjustments, which is comprised of (a) $10 million in cash, (b) $6 million in the form of a secured vendor take-back promissory note, and (c) $3 million in hold-back consideration comprised of $1 million in cash and $2 million of the Company’s Class A Common Stock based on the volume weighted average price for a share traded on the NYSE during the 30 trading days ending on the first trading immediately preceding the agreement date. The purchase price is to be adjusted for any net working capital adjustments identified during the 90 days immediately following the acquisition. The operations of Spin were included in the condensed consolidated financial statements for the quarter from the acquisition date to September 30, 2023.

Spin is a micromobility company with operations throughout North America. The purpose of the acquisition was to gain access to new city permits and markets and new vehicles.

The results of Spin’s operations, including revenues and expenses, are included in the statements of operations for the Company from the date of the transaction. The acquisition was accounted for as a business combination under ASC 805, Business Combinations. Assets acquired included cash of $3.2 million, $32.3 million of Vehicles, net and $5.3 million in other assets.

As of September 30, 2023, the Company provisionally recorded the valuation of the assets and liabilities acquired, and the estimated final consideration payable in the Company’s condensed consolidated balance sheet. The company’s accounting for the acquisition is provisional due to the proximity of the acquisition closing date to the Company’s quarter ended September 30, 2023 and also due to the variability caused by 90-day working capital adjustment period noted in the Share Purchase Agreement. As a result, the Company has not yet finalized the total purchase consideration payable, the appraisal of the transaction including the identification and measurement of the fair value of acquired assets and assumed liabilities, and the related tax effects, if any. The Company has also determined that it would not be practicable to present pro-forma financials related to this acquisition at this time.

Based on the provisional information available, the purchase price was preliminarily allocated to the assets acquired and the liabilities assumed based on the provisional fair values as of the acquisition date as follows (in thousands):


	Provisional Fair Value
Assets and Liabilities acquired:
Current assets	$	9,109
Vehicles, net	32,295
Other non-current assets	5,251
Current liabilities	(18,397)
Non-Current liabilities	$	(2,061)
Total net assets acquired	$	26,197
Consideration paid - Cash	$	10,000
Consideration paid - Issuance of stock	2,300
Consideration payable - VTB Note Payable(1)	2,431
Consideration payable - Cash Hold-back	1,000
Total purchase price	$	15,731
Estimated bargain purchase gain	$	10,466
(1) The consideration payable to Spin is subject to change as the Company has 90 days following the closing date to adjust the purchase price. The Company has identified preliminary adjustments of $3.6 million which decreases the principal amount outstanding under the VTB Note Payable from $6.0 million to $2.4 million.

The Company estimated a bargain purchase gain of $10.5 million based on the provisional amounts recorded and information known as at September 30, 2023. Due to the limited time between the acquisition and September 30, 2023, the Company was unable to finalize the identification and valuation of all of the assets acquired and liabilities assumed and the final consideration payable. The Company has deferred the bargain purchase gain until the purchase accounting is further progressed and recorded the bargain purchase gain within Other Current Liabilities. The estimates, judgments and assumptions are subject to change upon final valuation and should be treated as preliminary values. The Company has one year from the date of the acquisition to finalize its purchase price equation.

Included in the Company’s condensed consolidated statement of operations for the three and nine months ended September 30, 2023 are revenues of $2.1 million and $0.4 million in net losses related to Spin.

Bird Canada

Effective as of January 3, 2023, the Company entered into the Share Purchase Agreement with 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 Share Consideration Notes and 728,175 shares of the Company's Class A Common Stock.

Bird Canada is a micromobility company based in Toronto, Canada with operations throughout Canada. The purpose of the acquisition was to add additional profitable operations to Bird’s global platform, while consolidating our North American operations.

The results of Bird Canada’s operations, including revenues and expenses, are included in the statements of operations for the Company from the date of the transaction. The acquisition was accounted for as a business combination under ASC 805, Business Combinations. The Company acquired Bird Canada for $30.7 million. Assets acquired included $1.0 million of cash, $29.8 million of goodwill and $0.7 million of intangible assets.

Goodwill is attributable to the assembled workforce and the expected synergies from the acquisition. The purchase price was preliminarily allocated to the assets acquired and the liabilities assumed based on estimated fair values as of the acquisition date as follows (in thousands):


	Fair Value
Assets acquired:
Current assets	$	1,364
Vehicles	1,555
Goodwill	29,815
Other intangible assets	696
Other non-current assets	157
Current liabilities	(2,914)
Total net assets acquired	$	30,673
Consideration paid - notes	$	26,977
Consideration paid - issuance of common shares	3,696
Total purchase price	$	30,673

These estimates, judgments and assumptions are subject to change upon final valuation and should be treated as preliminary values. The Company has one year from the date of the acquisition to finalize its purchase price equation.

Prior to the acquisition, Bird Canada held the license to operate as the sole platform partner of the Company in Canada. The Company assessed these preexisting contracts and concluded approximately $0.1 million was settled as a part of the consideration transferred.

The following table sets forth the components of intangible assets acquired (in thousands) and their estimated useful life as of the date of acquisition:


	Estimated Useful Life	January 3, 2023
Trade names/trademarks	3 years	$	325
Customer relationships	2 years	113
Vendor permits	3 years	258
Total intangible assets		$	696

Transactions costs associated with the acquisition of Spin and Bird Canada were recorded in General and Administrative expenses on the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2023.