Smartbird (BIRD) FY2025 10-K Risk Factors: 11 New, 8 Dropped

What the changes say

Smartbird faces severe going concern doubts, with ongoing net losses of $77.3 million in 2025 and negative operating cash flows of $55.1 million.

What changed since the prior 10-K

New

NewRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. This assumes continuing operations and the realization of assets and liabilities in the normal course of business
We raised a going concern doubt due to our ongoing lack of profitability and negative operating cash flows.
NewRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
Our reliance on third-party distributors for international sales may negatively impact our operating results and brand value
We transitioned international sales to third-party distributors in Canada, South Korea, Japan, Australasia, China, and Europe, reducing our direct control.
NewRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
We may not achieve or sustain profitability in our business
Achieving profitability is uncertain given rising operating expenses across marketing, sustainable supply chain practices, and talent retention.
NewRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
Our business is subject to the risk of manufacturer concentration, both in absolute number of manufacturers and geographic concentration of manufacturers
Our footwear manufacturing is geographically concentrated in Vietnam, creating disruption risks despite diversification across multiple suppliers.
NewRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
We operate a limited number of retail locations and are subject to risks associated with commercial real estate and retail operations
We closed all U.S. full-price retail stores in January 2026, leaving lease obligations for remaining outlets and U.K. stores.
NewRisks Related to Intellectual Property, Information Technology, and Data Security and Privacy
Moreover, even if our applications are approved, third parties may seek to oppose, invalidate, or otherwise challenge these registrations for these same reasons, particularly as we expand our business and the number of products we offer
Third parties may challenge our trademark registrations, leading to costly defense or forced product redesigns.
NewRisks Related to Intellectual Property, Information Technology, and Data Security and Privacy
Additional risks related to our digital business include liability for online content and our ability to replicate the product experience that physical retail provides. Our failure to successfully respond to these risks could adversely affect sales and damage our reputation and brand
Our digital business faces risks from mobile shopping friction and challenges in replicating the physical retail experience.
NewRisks Related to Intellectual Property, Information Technology, and Data Security and Privacy
harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm
The U.K. Data Protection Act imposes potential fines up to 17.5 million pounds or 4 percent of worldwide turnover.
NewRisks Related to Ownership of Our Class A Common Stock
provisions could also limit the price that investors might be willing to pay in the future for shares of our Class A common stock, thereby depressing the market price of our Class A common stock
Our public benefit corporation status makes us a less attractive takeover target and can help management resist hostile bids.
NewRisks Related to Ownership of Our Class A Common Stock
facilities, technologies, or products, or through strategic alliances; the failure to adequately manage these acquisitions, investments, or alliances, to integrate them with our existing business, or to realize anticipated returns, could adversely affect us
Acquisitions and strategic alliances involve integration risks, unexpected costs, and potential diversion of management attention.
NewRisks Related to Ownership of Our Class A Common Stock
Geopolitical conflicts, including the ongoing conflict involving Iran and instability in the Middle East as well as the war between Russia and Ukraine, could adversely affect global economic conditions and our business, financial condition, and results of operations
Geopolitical conflicts in the Middle East and Ukraine could disrupt shipping routes like the Strait of Hormuz and raise logistics costs.

Dropped

DroppedRisks Related to Our Business, Brand, Products, and Industry
drive beneficial network effects with our suppliers, our net revenue may decrease, and our business, financial condition, and results of operations may be materially adversely affected
DroppedRisks Related to Our Business, Brand, Products, and Industry
Our efforts to transition our international go-to-market strategy from a direct to a distributor model may not be successful and may negatively impact our operating results and brand value
DroppedRisks Related to Our Business, Brand, Products, and Industry
experience standards, or sustainability and ESG expectations could impair the value of our brand. Failure to successfully execute the distributor arrangements, or a failure to protect the value of our brands, could have a material adverse effect on our results of operations
Network effects and repeat purchases from highly engaged customers.
DroppedRisks Related to Our Business, Brand, Products, and Industry
Our business is subject to the risk of manufacturer concentration
DroppedRisks Related to Our Business, Brand, Products, and Industry
As a company that operates retail stores, we are subject to various risks, including commercial real estate and labor and employment risks
DroppedRisks Related to Our Business, Brand, Products, and Industry
We may be unable to successfully open new store locations in existing or new geographies in a timely manner, if at all, which could harm our results of operations
DroppedRisks Related to Our Supply Chain
suppliers and manufacturers may not adequately meet our production requirements, and we compete with other companies for raw materials and production
Initial efforts to transition international strategy to a distributor model.
DroppedRisks Related to Other Legal, Regulatory, and Taxation Matters
including as a result of related uncertainty, these changes may adversely impact our business, financial condition, results of operations, and cash flows
ESG expectations and employee/lease transition charges in distributor rollout.

Reworded

98% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
We have incurred significant net losses since inception and anticipate that we will continue to incur losses for the foreseeable future
Updated 2025 net loss figures to $77.3 million, reported $55.1 million in negative operating cash flows, and added going concern liquidity disclosures.
87% rewrittenRisks Related to Ownership of Our Class A Common Stock
Additional stock issuances could result in significant dilution to our stockholders
Retained standard dilution risks regarding additional equity issuances and stock-based compensation without material textual changes.
86% rewrittenRisks Related to Our Supply Chain
Our reliance on suppliers and manufacturers to provide materials for and to produce our products could cause problems in our supply chain
Added specific warnings regarding raw material supply disruptions and inability to locate alternative suppliers of comparable quality.
82% rewrittenRisks Related to Other Legal, Regulatory, and Taxation Matters
We have and may continue to face exposure to foreign currency exchange rate fluctuations
Noted that international distributor transitions reduced direct foreign currency exposure, leaving mainly U.K. operations and wool procurement exposed without hedging.
80% rewrittenRisks Related to Other Legal, Regulatory, and Taxation Matters
Uncertainties in the interpretation and application of existing, new and proposed tax laws and regulations could materially affect our tax obligations and effective tax rate
Added explicit mention that tax law uncertainties may adversely impact cash flows alongside financial condition.
72% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
We operate in a highly competitive market and the size and resources of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our net revenue and profitability
Maintained identical competition risk text regarding apparel and footwear market rivals across physical and online channels.
71% rewrittenRisks Related to Ownership of Our Class A Common Stock
Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all
Retained standard disclaimer that market opportunity estimates and growth forecasts may prove inaccurate.
68% rewrittenRisks Related to Intellectual Property, Information Technology, and Data Security and Privacy
If the technology-based systems that give our customers the ability to shop with us online do not function effectively, our results of operations, as well as our ability to grow our digital business globally, could be materially adversely affected
Updated digital shopping risks to reflect reliance on the U.S. e-commerce platform following 2026 retail store closures.
63% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
Adverse changes in, or withdrawal from, trade agreements or political relationships between the United States and countries where we sell or source our products, could negatively impact our results of operations or cash flows
58% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
Shifting focus and sentiment among certain governments, organizations, customers, and investors on sustainability issues, including those related to climate change and socially responsible activities, may adversely affect our reputation, business, and financial results
Was: Climate change and increased focus by governments, organizations, customers, and investors on sustainability issues, including those related to climate change and socially responsible activities, may adversely affect our reputation, business, and financial results
54% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
Our financial results may be adversely affected if substantial investments in businesses and operations fail to produce expected returns
Was: Our financial results may be adversely affected if substantial investments in businesses and operations, including in our retail stores, fail to produce expected returns
51% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
If we fail to attract new customers, retain existing customers, or maintain or increase sales to customers, our business, financial condition, results of operations, and growth prospects will be harmed
47% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
We will require additional capital to support business growth, and this capital might be unavailable or might be available only by diluting existing stockholders
Was: We may require additional capital to support business growth, and this capital might be unavailable or might be available only by diluting existing stockholders
47% rewrittenRisks Related to Ownership of Our Class A Common Stock
Extreme weather conditions, natural disasters, public health crises, and other catastrophic events, including those caused or exacerbated by climate change, could negatively impact our results of operations and financial condition
Was: Extreme weather conditions, natural disasters, public health crises, political crises and instability, and other catastrophic events, including those caused or exacerbated by climate change, could negatively impact our results of operations and financial condition
46% rewrittenRisks Related to Intellectual Property, Information Technology, and Data Security and Privacy
Our trademarks and other proprietary rights could potentially conflict with the rights of others, and we may be prevented from selling some of our products
42% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
We may be unable to successfully execute on our long-term growth strategy, including efforts to maintain or grow our current revenue levels, reduce our costs, or accurately forecast demand and supply for our products
Was: We may be unable to successfully execute on our strategic transformation plan or our long-term growth strategy, including efforts to maintain or grow our current revenue and profit levels, reduce our costs, or accurately forecast demand and supply for our products
33% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
Our operating results may fluctuate significantly and our past operating results may not be a good indication of future performance
33% rewrittenRisks Related to Intellectual Property, Information Technology, and Data Security and Privacy
If sensitive information about our customers is actually or alleged to have been disclosed, or if we or our third-party providers are subject to real or perceived cyberattacks or misuse, our customers may curtail use of our website, we may be exposed to liability, and our reputation could suffer
Was: If sensitive information about our customers is actually or alleged to have been disclosed, or if we or our third-party providers are subject to real or perceived cyberattacks or misuse, our customers may curtail use of our website or mobile app, we may be exposed to liability, and our reputation could suffer
25% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
Our Credit Agreement contains restrictions that limit our flexibility in operating our business
25% rewrittenRisks Related to Ownership of Our Class A Common Stock
Sales, directly or indirectly, of a substantial amount of our Class A common stock in the public markets by our existing security holders may cause the price of our Class A common stock to decline
24% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
If we are unable to anticipate product trends and consumer preferences and successfully develop and introduce new products, we may not be able to maintain or increase our revenue and profits
23% rewrittenRisks Related to Our Financial Condition, Business, Brand, Products, and Industry
Our future success is substantially dependent on highly skilled personnel and if we are unable to attract and retain talent, we may not be able to grow effectively

All 76 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Financial Condition, Business, Brand, Products, and Industry

01We have incurred significant net losses since inception and anticipate that we will continue to incur losses for the foreseeable future98% rewritten
02The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. This assumes continuing operations and the realization of assets and liabilities in the normal course of businessNew
03We will require additional capital to support business growth, and this capital might be unavailable or might be available only by diluting existing stockholders47% rewritten
04We may be unable to successfully execute on our long-term growth strategy, including efforts to maintain or grow our current revenue levels, reduce our costs, or accurately forecast demand and supply for our products42% rewritten
05If we fail to attract new customers, retain existing customers, or maintain or increase sales to customers, our business, financial condition, results of operations, and growth prospects will be harmed51% rewritten
06Our operating results may fluctuate significantly and our past operating results may not be a good indication of future performance33% rewritten
07Our Credit Agreement contains restrictions that limit our flexibility in operating our business25% rewritten
08Our reliance on third-party distributors for international sales may negatively impact our operating results and brand valueNew
09Economic uncertainty in our key markets may affect consumer purchases of discretionary items, which has affected and may continue to adversely affect demand for our products
10We may not achieve or sustain profitability in our businessNew
11We operate in a highly competitive market and the size and resources of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our net revenue and profitability72% rewritten
12Adverse changes in, or withdrawal from, trade agreements or political relationships between the United States and countries where we sell or source our products, could negatively impact our results of operations or cash flows63% rewritten
13We rely on technical and materials innovation to offer high-quality products
14Our focus on using sustainable high-quality materials and environmentally friendly manufacturing processes and supply chain practices may increase our cost of revenue and hinder our revenue growth
15Shifting focus and sentiment among certain governments, organizations, customers, and investors on sustainability issues, including those related to climate change and socially responsible activities, may adversely affect our reputation, business, and financial results58% rewritten
16If we are unable to anticipate product trends and consumer preferences and successfully develop and introduce new products, we may not be able to maintain or increase our revenue and profits24% rewritten
17We utilize a range of marketing, advertising, and other initiatives to increase existing customers’ spend and to acquire new customers; if the costs of advertising or marketing increase, or if our initiatives fail to achieve their desired impact, we may be unable to grow the business profitably
18Our business is subject to the risk of manufacturer concentration, both in absolute number of manufacturers and geographic concentration of manufacturersNew
19We have a significant amount of long-lived assets, which are assessed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. In addition, we may never realize the full value of our long-lived assets, causing us to record material impairment charges
20Failure to accurately forecast consumer demand could lead to excess inventories or inventory shortages, which could result in decreased operating margins, reduced cash flows, and harm to our business
21We operate a limited number of retail locations and are subject to risks associated with commercial real estate and retail operationsNew
22Since 2022, we have entered into broad-based agreements with third-party retailers and we have limited operating experience executing this channel distribution strategy
23Our financial results may be adversely affected if substantial investments in businesses and operations fail to produce expected returns54% rewritten
24We are subject to risks related to our ESG activities and disclosures, and our reputation and brand could be harmed if we fail to meet our public sustainability targets and goals
25We are subject to risks related to our commitment to certain ESG criteria, which we call the Sustainability Principles and Objectives Framework, or the SPO Framework
26Our future success is substantially dependent on highly skilled personnel and if we are unable to attract and retain talent, we may not be able to grow effectively23% rewritten
27If we cannot maintain our culture and values, our business could be harmed
28Merchandise returns could harm our business
29Counterfeit or “knock-off” products, as well as products that are “inspired-by-Allbirds,” may siphon off demand we have created for sustainable footwear and apparel, and may result in customer confusion, harm to our brand, a loss of our market share, and/or a decrease in our results of operations
30Certain of our key operating metrics are subject to inherent challenges in measurement, and any real or perceived inaccuracies in such metrics or the underlying data may cause a loss of investor confidence in such metrics, and the market price of our Class A common stock may decline
31Our business is affected by seasonality

Risks Related to Our Supply Chain

32Our reliance on suppliers and manufacturers to provide materials for and to produce our products could cause problems in our supply chain86% rewritten
33Failure of our contractors or our licensees’ contractors to comply with our supplier code of conduct, contractual obligations, local laws, and other standards could harm our business
34Failure of our suppliers or manufacturers to consistently provide high-quality materials and products could adversely affect our brand and reputation and cause our business and results of operations to suffer
35The fluctuating cost of raw materials could increase our cost of revenue and cause our results of operations and financial condition to suffer
36The operations of our suppliers, most of which are located outside of the United States, are subject to additional risks that are beyond our control and that could harm our business, financial condition, and results of operations
37Shipping and delivery are critical parts of our business and any changes in, or disruptions to, our shipping and delivery arrangements could adversely affect our business, financial condition, and results of operations
38If we do not successfully optimize, operate, and manage our global network of third-party owned and operated logistics and distribution centers, our business, financial condition, and results of operations could be harmed

Risks Related to Intellectual Property, Information Technology, and Data Security and Privacy

39Our failure or inability to protect or enforce our intellectual property rights could diminish the value of our brand and weaken our competitive position
40Our trademarks and other proprietary rights could potentially conflict with the rights of others, and we may be prevented from selling some of our products46% rewritten
41Moreover, even if our applications are approved, third parties may seek to oppose, invalidate, or otherwise challenge these registrations for these same reasons, particularly as we expand our business and the number of products we offerNew
42The inability to acquire, use, or maintain our marks and domain names for our websites could substantially harm our business, financial condition, and results of operations
43Any material disruption of our information technology systems or unexpected network interruption could disrupt our business and reduce our sales
44If the technology-based systems that give our customers the ability to shop with us online do not function effectively, our results of operations, as well as our ability to grow our digital business globally, could be materially adversely affected68% rewritten
45Additional risks related to our digital business include liability for online content and our ability to replicate the product experience that physical retail provides. Our failure to successfully respond to these risks could adversely affect sales and damage our reputation and brandNew
46We are subject to risks related to online payment methods
47If sensitive information about our customers is actually or alleged to have been disclosed, or if we or our third-party providers are subject to real or perceived cyberattacks or misuse, our customers may curtail use of our website, we may be exposed to liability, and our reputation could suffer33% rewritten
48harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harmNew
49Use of social media, emails, push notifications, and text messages in ways that do not comply with applicable laws and regulations, lead to the loss or infringement of intellectual property, or result in unintended disclosure may harm our reputation or subject us to fines or other penalties

Risks Related to Other Legal, Regulatory, and Taxation Matters

50Government regulation of the internet and eCommerce is evolving, and unfavorable changes or failure by us to comply with these regulations, whether or not inadvertent, could substantially harm our business, financial condition, and results of operations
51We have and may continue to face exposure to foreign currency exchange rate fluctuations82% rewritten
52Any failure to comply with trade, anti-corruption, and other regulations could lead to investigations or actions by government regulators and negative publicity
53Uncertainties in the interpretation and application of existing, new and proposed tax laws and regulations could materially affect our tax obligations and effective tax rate80% rewritten
54Our ability to use our net operating loss carryforwards may be limited
55We are currently and may again in the future be subject to claims and litigation that could result in unexpected expenses and could ultimately be resolved against us

Risks Related to Our Status as a Public Benefit Corporation and Certified B Corporation

56Our status as a public benefit corporation may not result in the benefits that we anticipate
57If our publicly reported certified B Corp score declines, or if we lose our certified B Corp status, our reputation could be harmed and our business could suffer
58Our directors have a fiduciary duty to consider not only our stockholders’ interests, but also our specific public benefit and the interests of other stakeholders affected by our conduct. If a conflict between such interests arises, there is no guarantee such a conflict would be resolved in favor of our stockholders
59As a public benefit corporation, our focus on a specific public benefit purpose and producing a positive effect for society may negatively influence our financial performance
60As a public benefit corporation, we may be subject to increased derivative litigation concerning our duty to balance stockholder and public benefit interests, the occurrence of which may have an adverse impact on our financial condition and results of operations

Risks Related to Ownership of Our Class A Common Stock

61The market price of our Class A common stock has declined and may decline further regardless of our operating performance, resulting in substantial losses for investors purchasing shares of our Class A common stock
62Our Class A common stock is currently listed on the Nasdaq Global Select Market under the symbol “BIRD.” To maintain the listing of our Class A common stock on the Nasdaq Global Select Market, we are required to meet certain listing requirements, including, a minimum closing bid price of $1.00 per share
63The dual class structure of our common stock may adversely affect the trading market for our Class A common stock
64Sales, directly or indirectly, of a substantial amount of our Class A common stock in the public markets by our existing security holders may cause the price of our Class A common stock to decline25% rewritten
65We do not intend to pay dividends for the foreseeable future
66Additional stock issuances could result in significant dilution to our stockholders87% rewritten
67provisions could also limit the price that investors might be willing to pay in the future for shares of our Class A common stock, thereby depressing the market price of our Class A common stockNew
68Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all71% rewritten
69facilities, technologies, or products, or through strategic alliances; the failure to adequately manage these acquisitions, investments, or alliances, to integrate them with our existing business, or to realize anticipated returns, could adversely affect usNew
70The requirements of being a public company may increase our costs, strain our resources, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members
71We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our Class A common stock less attractive to investors
72If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our Class A common stock and trading volume could decline
73Geopolitical conflicts, including the ongoing conflict involving Iran and instability in the Middle East as well as the war between Russia and Ukraine, could adversely affect global economic conditions and our business, financial condition, and results of operationsNew
74We may incur losses from fraud or theft
75If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected
76Extreme weather conditions, natural disasters, public health crises, and other catastrophic events, including those caused or exacerbated by climate change, could negatively impact our results of operations and financial condition47% rewritten

Other Smartbird 10-Ks

FY2024 10-K risk factors
73 risks
Smartbird faces persistent net losses and significant restructuring efforts, including transitioning its international model to third-party distributors in multiple regions. The company relies heavily on a limited number of overseas contract manufacturers, particularly in Vietnam, creating acute supply chain and inventory risks. Its focus on sustainable materials and ESG targets exposes it to fluctuating raw material costs and shifting regulatory expectations.
Filed Mar 12, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.