🧾 What This Document Is

This is an Asset Purchase Agreement (APA) filed as an exhibit to a proxy statement (DEFA14A). In simple terms, it's the detailed legal contract for selling specific parts of the Allbirds business. Allbirds (the "Seller") is selling its core brand assets—not the whole company as a stock purchase, but its "good stuff" like the brand name, patents, and inventory—to a new company called Allbirds IP LLC (the "Buyer"). This filing reveals the exact price, what's included, and the rules for the sale.

👉 Why it matters: This isn't just a press release; it's the legally binding blueprint. It shows Allbirds is selling its most valuable asset—its intellectual property—and likely planning to wind down or fundamentally change its business afterward.

🏢 What The Company Does

Allbirds, founded in 2015, is a global footwear and lifestyle brand known for its sustainable sneakers made from materials like merino wool and eucalyptus fiber. Its mission is to "make better things in a better way."

👉 In simple terms: They sell shoes and apparel directly to consumers online and through stores, marketing themselves as an eco-friendly alternative. This deal means the brand and its IP are being sold, but the corporate entity (Allbirds, Inc.) remains, likely to manage the sale proceeds and its remaining obligations.

💰 The Deal Price & Adjustments

The headline price for the assets is $39,000,000. However, this is a "Base Price" that can change.

• Adjustment Mechanism: The final price will be adjusted based on the value of the inventory and accounts receivable sold versus certain liabilities assumed at the closing date. Think of it like a final grocery bill that changes based on what's actually on the shelves.
• Key Baseline: The calculation starts with the net asset value (Inventory + 90% of Receivables - Assumed Liabilities) and compares it to a $2,500,000 baseline.
• Deposit: The Buyer has already put $2,000,000 into escrow, which will be credited toward the final price at closing.

📦 What’s Being Sold (The "Purchased Assets")

This is the core of the deal. Allbirds is selling almost everything that makes the "Allbirds" brand operate:

• Intellectual Property (The Crown Jewels): All trademarks, patents, copyrights, domain names (like allbirds.com), social media accounts, and designs.
• Inventory: All finished shoes and products ready for sale.
• Accounts Receivable: Money owed to Allbirds by customers for past sales.
• Contracts: Specific supplier, distributor, and vendor agreements listed separately.
• Books & Records: Customer lists, financial data, marketing materials, and operational files.
• Goodwill: The value of the brand's reputation and ongoing customer relationships.

🚫 What's NOT Being Sold (The "Excluded Assets")

The Buyer is NOT taking on all of Allbirds' corporate baggage:

• Cash: All existing cash in the bank.
• Property & Equipment: Physical assets like office furniture, fixtures, and machinery.
• Most Prepaid Expenses: Like unused rent or insurance.
• Certain "Other Assets": As detailed in private schedules.

👉 This is key: The deal is structured so the Buyer gets a "clean" package to run the brand, while the old corporate shell (Allbirds, Inc.) keeps the cash, debts, and other baggage.

⚖️ What Liabilities The Buyer Takes On

The Buyer is assuming only very specific, listed debts:

• Certain accounts payable.
• Specific current liabilities listed on a schedule.
• Costs directly related to transferring the intellectual property.

❌ What the Buyer Does NOT Assume: This is critical. The Buyer is NOT taking on:

• Employee-related obligations (salaries, benefits, severance).
• Most Taxes.
• Long-term debt or loans.
• Lawsuits or legal claims.
• Leases for stores or offices (unless specifically listed).

👉 Why it matters: This is a "liability-light" purchase for the Buyer. Allbirds, Inc. remains responsible for all its past debts, employee obligations, and legal issues.

🔄 What Happens Next (The Transition)

The deal isn't a simple handover. Several things must happen:

1. Closing: Must occur by a "Drop Dead Date" (likely defined elsewhere) or the deal can be terminated.
2. Transition Services: Allbirds will provide temporary services to the Buyer to help them take over operations (under a separate Transition Services Agreement).
3. Gift Cards: The Buyer will honor existing gift cards, but only up to a pre-calculated value (the "Gift Card Value"). If redemptions exceed that, they can draw from a special escrow fund.
4. Allbirds Wind-Down: Allbirds, Inc. gets a limited, 1-year license to use its own name only for the purpose of reporting the sale, communicating with stockholders, and legally dissolving the company. It cannot use the brand for any new business.

⚖️ Big Picture: Strengths & Risks

👍 Strengths / Why This Might Work:

• Clean Break for Buyer: The Buyer gets the valuable IP and operations without the legacy debts and problems.
• Capital for Seller: The ~$39M provides cash to Allbirds, Inc. to pay off creditors and potentially return money to stockholders after it dissolves.
• Brand Survival: The "Allbirds" brand and products can continue under new ownership.

⚠️ Risks & Concerns:

• Execution Risk: Transferring all contracts, IP, and operations is complex and requires third-party consents.
• Valuation Uncertainty: The final price isn't fixed; it depends on the inventory/receivables value at closing.
• Seller's Viability: Post-closing, Allbirds, Inc. becomes a shell with no operating business, only liabilities and the remaining cash from the sale. Its long-term purpose is simply to wind down.
• Employee Impact: The agreement states the Buyer has no obligation to hire any of Allbirds' current employees, creating uncertainty for the workforce.

🧠 The Analogy

Imagine selling a house, but not the land. You're selling the house itself, all the fixtures, the furniture, and the right to use the street address. You agree on a price, but it might change based on a final inspection of the appliances. You, the seller, keep all the unpaid utility bills, the mortgage, and the liability if someone got hurt in the past. You also agree to clean the gutters for the new owner for a month while they move in. Afterwards, you plan to legally dissolve your ownership of the property address and walk away.

📇 Key Contacts & People

The agreement itself is between two corporate entities. However, the proxy statement it's filed with would list Allbirds' leadership and board. Key operational contacts for the deal would include:

• Seller: Allbirds, Inc. (A Delaware public benefit corporation)
• Buyer: Allbirds IP LLC (A Delaware limited liability company)
• Escrow Agent: SRS Acquiom
• Independent Accountant (for disputes): Forvis Mazars U.S.
• Financial Advisor to Seller (fees noted): TD Securities (USA) LLC

🧩 Final Takeaway

This agreement confirms Allbirds is undergoing a radical transformation. It is selling its core brand assets—the very essence of the company—to a new entity for approximately $39 million. This provides a path for the brand to continue, but as a separate operation. The original Allbirds, Inc. is effectively preparing to shut down after settling its remaining debts. It's the end of one chapter and the uncertain start of another for the sustainable footwear pioneer.