Bird admitted that it overstated the received revenue from its electric scooters for the last two years, by recognizing unpaid customer rides. Because of this, the company said that "it should no longer be relied upon."
Overstated Revenue
Micromobility company Bird had overstated its revenue from the first quarter of 2020 to the second quarter of 2022. According to the filings that were sent to U.S. Securities and Exchange Commission, the audit committee of the company found out that it overestimated its revenues and should not be relied on as errors were found.
The financial statements include revenue from customers who used their scooters and e-bikes. Based on a report from TechCrunch, the company also confirmed that it had been recording extra fares from accounts that have insufficient wallet balances, which resulted in unpaid customer rides. "Bird's disclosure controls and procedures are not effective at a reasonable assurance level", the company stated during the internal investigation.
The audit committee discovered the errors as they prepare for the third-quarter earnings and financial statements that ended last September 30th. Due to this, Bird confirmed that it will be delaying its third-quarter report filing, which was originally scheduled on November 14th.
Bird is also concerned that in order for the company to reduce costs or seek bankruptcy protections, it has to discontinue some or all of its operations. With only $38.5 million in free cash flow for the third quarter, the company will not be meeting its obligations over the next year and might come as short.
"Accordingly, the Company plans to continue to closely monitor its operating forecast, reduce its operating expenses, and pursue additional sources of outside capital. Along with this global footprint realignment, the Company is targeting additional reductions in its operating expenses," the company stated on the filing.
Read also: Bird: Scooter Rental for Persons with Disabilities to Launch Pilot Program in New York City
2022 Recap
By looking into the reports and previous issues that the company has faced this year, Bird has been really struggling lately. During the Q1 earnings call, Gizmodo reported that the company was losing revenue from shared rides by only $4 million (previously reported from $9 million).
23% of its workforce was also laid off by the company, which resulted in approximately 140 employees being affected. Following this, Bird also announced that it would refocus its operations by fully exiting in Germany, Sweden, and Norway markets.
Meanwhile, The Verge reported that Chief Executive Officer Travis VanderZander stated that it will also be scaling down its operations across the United States, Europe, the Middle East, and Africa.
This article is owned by TechTimes
Written by Inno Flores
