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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

____________________________________________________________________________

FORM 10-Q

____________________________________________________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 001-39516

_____________________________________________

OWLET, INC.

(Exact Name of Registrant as Specified in its Charter)

_____________________________________________


Delaware			85-1615012
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
2940 West Maple Loop Drive, Suite 203 Lehi, Utah			84048
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (844) 334-5330

_____________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value per share

OWLT

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 6, 2026, the registrant had 29,001,168 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page

PART I.
	Cautionary Note Regarding Forward-Looking Statements	1
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (Unaudited)	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)	4
	Condensed Consolidated Statements of Changes in Mezzanine Equity and Stockholders’ Equit y (Deficit ) (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II.
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	39
	Signatures	40

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). All statements other than statements of historical facts contained in this Report, including statements concerning possible or assumed future actions, business strategies, events or results of operations, our liquidity, capital resources, runway, compliance with covenants, and our ability to continue as a going concern, our ability to remediate our material weaknesses, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Report and are subject to a number of risks, uncertainties and assumptions described in the sections entitled “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Report, our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Form 10-K”) and Amendment No. 1 to our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2025 (the “Form 10-K/A”). These forward-looking statements are subject to numerous risks, including, without limitation, the following:

•We have a limited operating history.

•We have a history of losses and may not achieve or sustain profitability. Operating losses could continue, which could materially and adversely affect our business, financial condition and results of operations.

•We have experienced fluctuations in the growth of our business and anticipate this will continue. If we fail to manage our growth effectively, our business could be materially and adversely affected.

•If any governmental authority or notified body were to require marketing authorization or similar certification for any product that we sell for which we have not obtained such marketing authorization or certification, we could be subject to regulatory enforcement actions and/or be required to cease selling or recall the product pending receipt of marketing authorization or similar certification from such other governmental authority or notified body, which can be a lengthy and time-consuming process, harm financial results and have long-term negative effects on our operations.

•Our products rely on mobile applications to function, and we rely on Apple’s App Store and the Google Play Store for distribution of our mobile applications.

•Our success depends on our ability to attract and retain subscribers and successfully monetize new features; if we fail to manage our subscription model or experience high rates of subscriber churn, our revenue and long-term prospects could be materially and adversely affected.

•A substantial portion of our sales comes from a limited number of retailers.

•We are required to obtain and maintain marketing authorizations or certifications from the FDA, foreign regulatory authorities or notified bodies for medical device products in the U.S. or in foreign jurisdictions, which can be a lengthy and time-consuming process, and a failure to do so on a timely basis, or at all, could severely harm our business.

•We currently rely on a single manufacturer for the assembly of our Dream Sock, Smart Sock, and BabySat products and a single manufacturer for the assembly of our Owlet Cam. We will likely rely on single manufacturers for future products we may develop. If we encounter manufacturing problems, delays, or increased costs, we may be unable to promptly transition to alternative manufacturers and our ability to generate revenue may be limited.

•Our success depends in part on our proprietary technology, and if we are unable to obtain, maintain or successfully enforce our intellectual property rights, the commercial value of our products and services will be adversely affected, our competitive position may be harmed and we may be unable to operate our business profitably.

•Our business and operations may suffer in the event of IT system failures, cyberattacks or deficiencies in our cybersecurity.

•Development, maintenance, and use of artificial intelligence technologies may not be beneficial to our business, and may result in the poor performance of our products, services and business, as well as damage our reputation and the reputations of our customers, or cause us to incur liability resulting from the violation of laws or contracts to which we are a party.

•Increases in tariffs, trade restrictions or taxes on our products could have an adverse impact on our operations.

•We are involved, and may become involved in the future, in disputes and other legal or regulatory proceedings that, if adversely decided or settled, could materially and adversely affect our business, financial condition and results of operations.

•We face the risk of product liability claims and the amount of insurance coverage we hold now or in the future may not be adequate to cover all liabilities we might incur.

•Operations in international markets will expose us to additional business, political, regulatory, operational, financial and economic risks.

•Our success depends substantially on our reputation and brand.

•Some of our products and services are in development or have been recently introduced into the market and may not achieve market acceptance, which could limit our growth and adversely affect our business, financial condition and results of operations.

•We have identified material weaknesses in our internal control over financial reporting and we may identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting, which may result in material misstatements of our consolidated financial statements, cause us to fail to meet our periodic reporting obligations or cause our access to the capital markets to be impaired.

•We may need to raise additional capital in the future in order to support our operations and strategic plans, which may not be available to us when needed, on acceptable terms, or at all.

These risks and other important factors, including those discussed in this Report, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Moreover, we operate in an evolving environment. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included elsewhere in this Report are not guarantees of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements included elsewhere in this Report. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements included elsewhere in this Report, they may not be predictive of results or developments in future periods.

Any forward-looking statement that we make in this Report speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Report. For all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Reform Act.

As used in this Report, unless otherwise stated or the context otherwise requires, “we,” “us,” “our,” “Owlet,” the “Company,” and similar references refer to Owlet, Inc. and its subsidiaries. “Common stock” refers to the Class A common stock of Owlet, Inc.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Owlet, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(unaudited)


	March 31, 2026		December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	35,459	$	35,461
Restricted cash	5,550		5,550
Accounts receivable, net of allowance for credit losses of $661 and $723, respectively	19,857		22,931
Inventory	18,194		15,291
Prepaid expenses and other current assets	3,392		2,684
Total current assets	82,452		81,917
Property and equipment, net	720		295

Intangible assets, net	1,748		1,391
Other assets	1,837		2,028
Total assets	$	86,757	$	85,631
Liabilities, Mezzanine Equity, and Stockholders’ Equity
Current liabilities:
Accounts payable	$	11,781	$	11,967
Accrued and other expenses	17,135		19,427
Current portion of deferred revenue	2,409		2,282
Line of credit	13,353		6,932
Current portion of long-term and other debt	3,465		3,635
Total current liabilities	48,143		44,243
Long-term debt, net	1,950		2,463
Common stock warrant liabilities	648		3,273
Other long-term liabilities	170		197
Total liabilities	50,911		50,176
Commitments and contingencies (Note 5)
Mezzanine equity:
Series A convertible preferred stock, $0.0001 par value, 11,479 and 11,479 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	7,651		7,151
Series B convertible preferred stock, $0.0001 par value; 9,250 and 9,250 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	5,192		4,844
Redeemable common stock, 252,500 and 562,500 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	1,992		4,418
Total mezzanine equity	14,835		16,413
Stockholders’ equity:
Common stock, $0.0001 par value, 107,142,857 shares authorized as of March 31, 2026 and December 31, 2025; 28,099,112 and 26,945,426 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively	3		3
Additional paid-in capital	332,217		326,912
Accumulated deficit	(311,209)		(307,873)
Total stockholders’ equity	21,011		19,042
Total liabilities, mezzanine equity, and stockholders' equity	$	86,757	$	85,631

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Owlet, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended March 31,
		2026		2025
Revenue:
Hardware		$	19,779	$	20,704
Subscription		2,677		400
Total revenue		22,456		21,104
Cost of revenue:
Hardware		9,344		9,626
Subscription		873		152
Total cost of revenue		10,217		9,778
Gross profit		12,239		11,326
Operating expenses:
General and administrative		9,302		7,092
Sales and marketing		4,473		4,002
Research and development		3,956		2,903
Total operating expenses		17,731		13,997
Operating loss		(5,492)		(2,671)
Other income (expense):
Interest expense, net		(683)		(991)
Common stock warrant liability adjustment		2,625		6,687
Other income (expense), net		221		12
Total other income (expense), net		2,163		5,708
Income (loss) before income tax provision		(3,329)		3,037
Income tax provision		(7)		(12)
Net income (loss) and comprehensive income (loss)		$	(3,336)	$	3,025
Accretion on convertible preferred stock		(848)		(847)
Allocation of net income to participating securities		—		(344)
Allocation of accretion on convertible preferred stock to redeemable common stock		11		—
Accretion on redeemable common stock		(13)		(21)
Allocation of net income to participating securities to redeemable common stockholders		—		14
Allocation of net (income) loss attributable to redeemable common stockholders		44		(79)
Net income (loss) attributable to redeemable common stockholders		$	(42)	$	86
Net income (loss) attributable to common stockholders		$	(4,142)	$	1,748

Net income (loss) per share attributable to redeemable common stockholders
Basic		$	(0.12)	$	0.15
Diluted		$	(0.12)	$	0.15
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to redeemable common stockholders
Basic		363,333		562,500
Diluted		363,333		687,500

Net income (loss) per share attributable to common stockholders
Basic		$	(0.15)	$	0.11
Diluted		$	(0.25)	$	0.11
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to common stockholders
Basic		27,415,908		15,383,287
Diluted		27,564,589		15,383,287

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Owlet, Inc.

Condensed Consolidated Statements of Changes in Mezzanine Equity and Stockholders’ Equity (Deficit)

(in thousands, except share and per share amounts)

(unaudited)


	Series A Convertible Preferred Stock			Series B Convertible Preferred Stock			Redeemable Common Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Equity (Deficit)
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance as of December 31, 2024	11,479	$	5,151	9,250	$	3,452	750,000	$	4,334	15,725,783	$	2	$	238,442	$	(268,195)	$	(29,751)
Accretion on convertible preferred stock	—	500		—	348		—	—		—	—		(847)		—		(847)
Accretion on redeemable common stock	—	—		—	—		—	21		—	—		(21)		—		(21)
Common stock issuance costs	—	—		—	—		—	—		—	—		7		—		7
Forfeiture of redeemable common stock	—	—		—	—		(62,500)	—		—	—		—		—		—
Issuance of common stock for restricted stock units vesting	—	—		—	—		—	—		56,149	—		—		—		—
Issuance of common stock for employee stock purchase plan	—	—		—	—		—	—		26,917	—		97		—		97
Stock-based compensation	—	—		—	—		—	—		—	—		1,684		—		1,684
Net income	—	—		—	—		—	—		—	—		—		3,025		3,025
Balance as of March 31, 2025	11,479	$	5,651	9,250	$	3,800	687,500	$	4,355	15,808,849	$	2	$	239,362	$	(265,170)	$	(25,806)




Balance as of December 31, 2025	11,479	$	7,151	9,250	$	4,844	562,500	$	4,418	26,945,426	$	3	$	326,912	$	(307,873)	$	19,042
Accretion on convertible preferred stock	—	500		—	348		—	—		—	—		(848)		—		(848)
Accretion on redeemable common stock	—	—		—	—		—	13		—	—		(13)		—		(13)
Conversion of redeemable common stock to common stock	—	—		—	—		(310,000)	(2,439)		310,000	—		2,439		—		2,439
Issuance of common stock for restricted stock units vesting	—	—		—	—		—	—		800,186	—		—		—		—
Issuance of common stock for employee stock purchase plan	—	—		—	—		—	—		34,787	—		148		—		148
Issuance of common stock upon exercise of stock options	—	—		—	—		—	—		8,713	—		37		—		37
Stock-based compensation	—	—		—	—		—	—		—	—		3,542		—		3,542
Net loss	—	—		—	—		—	—		—	—		—		(3,336)		(3,336)
Balance as of March 31, 2026	11,479	$	7,651	9,250	$	5,192	252,500	$	1,992	28,099,112	$	3	$	332,217	$	(311,209)	$	21,011

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Owlet, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities
Net income (loss)	$	(3,336)	$	3,025
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	185		119
Stock-based compensation	3,490		1,657
Provision for credit losses	(25)		64
Common stock warrant liability adjustment	(2,625)		(6,687)
Amortization of debt financing costs	371		659




Other adjustments, net	61		203
Changes in assets and liabilities:
Accounts receivable	3,197		(4,453)
Prepaid expenses and other assets	(607)		(619)
Inventory	(2,905)		(1,408)
Accounts payable and accrued and other expenses	(2,955)		1,520
Lease liabilities	(18)		(48)

Deferred revenue	118		42
Other, net	—		1
Net cash used in operating activities	(5,049)		(5,925)
Cash flows from investing activities
Purchase of property and equipment	(15)		(4)
Purchase of intangible assets	(31)		—
Capitalized internal-use software development costs	(369)		(106)
Net cash used in investing activities	(415)		(110)
Cash flows from financing activities


Proceeds from short-term borrowings	14,181		13,424
Payments of short-term borrowings	(8,025)		(11,491)

Payments of long-term borrowings	(754)		—

Employee taxes paid related to vesting and settlement of stock-based awards	(3,141)		(395)
Proceeds related to the issuance of common stock under stock plans	3,043		395

Issuance costs paid related to prior year common stock, preferred stock, and warrants	—		(16)
Warrant exchange transaction costs paid	(27)		—

Other, net	185		97
Net cash provided by financing activities	5,462		2,014
Net change in cash, cash equivalents, and restricted cash	(2)		(4,021)
Cash, cash equivalents, and restricted cash at beginning of period	41,011		20,631
Cash, cash equivalents, and restricted cash at end of period	$	41,009	$	16,610

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Owlet, Inc.

Condensed Consolidated Statements of Cash Flows (continued)

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2026		2025
Supplemental disclosure of cash flow information:

Cash paid for interest	$	358	$	357
Supplemental disclosure of non-cash investing and financing activities:

Accretion on preferred stock and redeemable common stock	$	861	$	869

Warrant exchange transaction costs in accounts payable	14		—
Conversion of redeemable common stock to common stock	2,439		—


Purchases of property and equipment included in accounts payable	451		26
Purchases of intangible assets included in accounts payable	50		33
Equity issuance costs included in accounts payable and accrued liabilities	—		260
Stock-based compensation for software development	52		27

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Owlet, Inc.

Notes to Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts)

(unaudited)

Note 1. Basis of Presentation

As used in these financial statements, unless otherwise stated or the context otherwise requires: “we,” “us,” “our,” “Owlet,” the “Company,” and similar references refer to Owlet, Inc. and its subsidiaries. “Common stock” refers to the Class A common stock of Owlet, Inc.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or "GAAP") for interim financial information and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. The condensed consolidated balance sheet as of December 31, 2025, included herein, was derived from the audited consolidated financial statements as of that date, but does not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for the fair statement of the Company’s financial position, results of operations, and cash flows for the interim periods presented. All dollar amounts, except per share amounts, in the notes are presented in thousands, unless otherwise specified.

Certain prior year amounts have been reclassified to conform to the current period presentation.

Revenue Recognition

The Company generated substantially all of its revenue from the sale of its hardware products, primarily Dream Sock, Dream Sight, and Dream Duo. A growing minority portion of revenue is being generated from subscriptions to its Owlet360 service.

Revenue is recognized when control of goods and services are transferred to customers at the transaction price, an amount that reflects the consideration expected to be received by the Company in exchange for those goods and services. The transaction price is calculated as selling price less the Company’s estimate of variable consideration, including future returns, volume rebates, and sales incentives related to current period sales.

The Company applies the following five-step approach to recognizing revenue:

(1)Identify the contract with a customer

(2)Identify the performance obligations in the contract

(3)Determine the transaction price

(4)Allocate the transaction price to performance obligations in the contract

(5)Recognize revenue when or as a performance obligation is satisfied

Hardware Revenue

From the sale of hardware products, the Company enters into contracts that have multiple performance obligations. Product sales include two performance obligations. The first performance obligation is the delivery of hardware and embedded firmware essential to the functionality of the hardware. Embedded firmware allows the hardware to recognize inputs to the hardware and provide appropriate outputs. The second performance obligation is the implied right to connect the downloadable mobile application, provided at no additional cost to the customer, to the hardware, which enables users to view and access real-time data outputs. The implied right to receive future unspecified application upgrades, added features, firmware updates, and bug fixes, on a when-and-if available basis, are considered part of the embedded firmware, and connection to the downloadable mobile application's performance obligations.

The Company allocates the transaction price to each performance obligation based on a relative standalone selling price (“SSP”). The Company’s process for determining its SSP considers multiple factors, including the expected cost plus a margin method, and varies depending on the facts and circumstances of each performance obligation. Revenue allocated to the delivery of the hardware and embedded firmware essential to the functionality of the hardware represent substantially all of the arrangements consideration and reflect the Company’s best estimate of the selling price if it was sold regularly on a stand-alone basis. SSP for the mobile application is estimated using the expected cost plus a margin method based on fulfillment costs allocated over the expected device useful life, and is recognized ratably over the expected service period.

Revenue is recognized at the time the related performance obligation is satisfied by transferring control of the promised good or service to a customer. Revenue allocated to the hardware and embedded firmware are recognized at the time of product delivery, provided the other conditions for revenue recognition have been met. This generally occurs upon delivery of the product to a third-party carrier. Revenue allocated to the implied right to access the mobile application and the implied right to receive, on a when-and-if-available basis, added features and bug fixes, is recognized on a straight-line basis over the estimated usage period of the underlying hardware product. The usage period is estimated based on historical user activity and ranges from 8 months to 1 year, 8 months.

The Company records revenue net of sales tax and variable consideration such as discounts and customer returns. Payment terms are short-term in nature and, as a result, do not have any significant financing components. The Company records estimated reductions to revenue in the form of variable consideration for customer sales programs, returns, and incentive offerings including rebates, markdowns, promotions, and volume-based incentives.

Consideration payable to a customer, such as cooperative advertising and pricing promotions to retailers and distributors, is recorded as a reduction to revenue. Deferred revenue represents advance payments received from customers prior to performance by the Company. Sales taxes collected from customers which are remitted to governmental authorities are not included in revenue and are reflected as a liability in the accompanying unaudited condensed consolidated balance sheets.

Subscription Revenue

The Company’s Owlet360 premium subscription service provides access to enhanced features beyond the base functionality of the mobile application. The Company makes the Owlet360 subscription available through third-party digital distribution service providers, specifically the Apple App Store and Google Play Store. Customers who purchase subscriptions pay through the respective app stores, which act as the merchant of record and payment processors for these transactions. The Company evaluates these arrangements to determine whether revenue should be reported gross or net of fees retained by the payment processors. The Company has determined it is the principal in the transaction with the end user, as it controls, hosts, and delivers the subscription service; retains primary responsibility for service maintenance, availability, and customer support; and has discretion in establishing subscription pricing. Although the digital platforms serve as the merchant of record and process customer payments, the Company controls the subscription service and the customer's continued access to it. Accordingly, the Company records subscription revenue on a gross basis and records fees paid to third-party payment processors as cost of revenue.

The premium subscription service represents a single performance obligation to provide customers with continuous access to advanced sleep analytics, historical health data storage, and personalized insights over the subscription term. Revenue is recognized ratably on a daily basis over the subscription period, commencing upon a customer's conversion to a paid plan following any free trial period. Subscription fees received in advance of the service period are recorded as deferred revenue and recognized as the performance obligation is satisfied.

The Company offers monthly and annual subscription plans, including introductory pricing for new subscribers. Introductory discounts are treated as price concessions that reduce the transaction price at the point of sale rather than as separate performance obligations. Refunds, which are administered by the digital platforms, are recorded as a reduction to revenue in the period processed and have historically been immaterial.

Cost of Revenue

Hardware cost of revenue consists of product costs, including contract manufacturing, shipping and handling, depreciation and amortization relating to tooling and manufacturing equipment and software, warranty replacement, fulfillment costs, warehousing, hosting and platform costs, and reserves for excess and obsolete inventory.

Subscription cost of revenue primarily consists of distribution fees paid to digital application platforms and the amortization of capitalized internal-use software costs associated with the Owlet360 service.

Risks and Uncertainties

In accordance with ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements included in this quarterly report on Form 10-Q are issued.

The Company has historically experienced recurring operating losses, with the exception of the third quarter of 2025, and has generated negative cash flows from operations. The Company had an accumulated deficit of $311,209 as of March 31, 2026, and during the three months ended March 31, 2026 and 2025, the Company had negative cash flows from operations of $5,049 and $5,925, respectively. As of March 31, 2026, the Company had $35,459 of cash on hand.

As the Company continues to address these financial conditions, management has undertaken the following actions:

•As described in Note 7 Common Stock Issuance, Redeemable Common Stock, Common Stock Warrants, and Convertible Preferred Stock, in October 2025 the Company completed an offering for the sale of 4,825,400 shares of its common stock at an offering price to the public of $7.15 per share. From this offering, the Company received net proceeds of $32,109 after deducting underwriting discounts and commissions.

•As described further in Note 7, Common Stock Issuance, Redeemable Common Stock, Common Stock Warrants, and Convertible Preferred Stock, in September 2024, the Company issued 3,135,136 shares of its common stock and received net proceeds of $10,590 and in February 2024, the Company consummated a sale of preferred stock and warrants to purchase its common stock for a gross purchase price of $9,250.

•As described in Note 4, Debt and Other Financing Arrangements, in September 2024, the Company entered into a loan facility agreement with WTI Fund X, Inc. and WTI Fund XI, Inc. (collectively “WTI” or “Lenders”) for a term loan facility of up to $15,000 (the “WTI Loan Facility”). In July 2025, WTI granted a 90-day extension, making the Second Tranche Commitment available through November 13, 2025, which was previously available through August 15, 2025. On September 11, 2024, the Company entered into a credit and security agreement (the “Credit Agreement”) for an asset-based revolving credit facility (the “ABL Line of Credit”) with the financial institutions party thereto from time to time as lenders (collectively, the “Lenders”) and ABL OPCO LLC, a Delaware limited liability company, in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), with a maximum revolving commitment amount of up to $15,000, with an additional $5,000 revolving commitment available on September 11, 2025. On June 11, 2025, the Company entered into a First Amendment to the Credit Agreement (the “First Amendment”) to, among other things, (i) modify certain financial covenants required to be maintained by the Company's wholly-owned subsidiary, Owlet Baby Care, Inc., a Delaware corporation (“OBCI”), (ii) increase the amount of capital expenditures that may be incurred by OBCI during certain fiscal years, and (iii) expand the eligibility of certain accounts receivable that OBCI can borrow against. As of March 31, 2026, the Company has borrowings of $6,259 under the WTI Loan Facility and $13,353 under the ABL Line of Credit.

The Company believes its existing cash and cash equivalent balances, cash flows from operations, and committed credit lines will be sufficient to meet its working capital and capital expenditure needs for at least the next 12 months from the date of issuance of the March 31, 2026 unaudited condensed consolidated financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis and accordingly, do not include any adjustments relating to the recoverability and classification of asset carrying amounts, or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

There can be no assurance that the Company will generate sufficient future cash flows from operations due to potential factors, including but not limited to inflation, recession, or reduced demand for the Company’s products. If revenue decreases from current levels, the Company may be unable to further reduce costs, or such reductions may limit its ability to pursue strategic initiatives and grow revenue in the future.

The Company maintains its cash in bank deposit accounts which, at times, exceed federally insured limits. As of March 31, 2026, substantially all of the Company’s cash was held with Silicon Valley Bank and Citibank, and exceeded federally insured limits.

Although the Company’s sales and accounts receivable are derived from sales contracts with a large number of customers, its top several customers account for a significant amount of its total sales and make up a correspondingly large portion of its accounts receivable. During the three months ended March 31, 2026, there were three customers who individually represented 10% or more of total net revenue, accounting for 26%, 11%, and 11% of total net revenue, with no other customers exceeding 10% of total net revenue during that period. These same customers accounted for 29%, 14%, and 12% of the accounts receivable, net balance, respectively, as of March 31, 2026. During the three months ended March 31, 2025, there were two customers who individually represented 10% or more of total net revenue, accounting for 37% and 14% of total net revenue.

The Company’s largest customers by total net accounts receivable consisted of the following:


	March 31, 2026		December 31, 2025
Three largest customers by total net accounts receivable	55	%	67	%

Recently Adopted Accounting Pronouncements

In July 2025, the FASB issued ASU 2025-05, which amended the guidance in ASC 326 to simplify the estimation of credit losses on accounts receivable and contract assets from revenue transactions. The amended guidance allows companies to elect a practical expedient to assume that conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when estimating the expected credit losses of the asset. This update is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods. The Company adopted this standard prospectively and the adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Guidance

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. The standard is intended to require more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impact this standard will have on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amended guidance modernizes the accounting for costs related to internal-use software to more closely align with current software development methods. The guidance removes references to project stages and clarifies when we are required to start capitalizing eligible costs. The new guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is currently assessing the impact this amended guidance will have on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.

Recent Tax Legislation

The One Big Beautiful Bill Act of 2025 (the “OBBBA”) was signed into law on July 4, 2025. The OBBBA makes changes to the U.S. corporate income tax, including reinstating the option to claim 100% accelerated depreciation deductions on qualified property, with retroactive application beginning January 20, 2025, and immediate expensing of domestic research and development costs, with retroactive application beginning January 1, 2025. The Company determined that the OBBBA did not have a material impact on the unaudited condensed consolidated financial statements for the three months ended March 31, 2026. The Act includes multiple effective dates, with certain provisions effective in 2026 and 2027. The Company will continue to evaluate the impact of these provisions on our 2026 and subsequent financial statements.

Note 2. Certain Balance Sheet Accounts

Restricted Cash

The Company’s restricted cash includes cash held in escrow accounts related to litigation settlements. Under the terms of the Butala action settlement agreement (see Note 5), the Company deposited funds into a dedicated escrow account pending final court approval of the settlement and the completion of the claims administration process. The Company's restricted cash also includes cash collateral to secure its current credit card borrowings. Cash as reported on the unaudited condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted cash as shown on the unaudited condensed consolidated balance sheets and consists of the following:


	March 31,
	2026		2025
Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets:
Cash and cash equivalents	$	35,459	$	16,310
Restricted cash:
Litigation settlement escrow	5,250		—
Cash collateral - credit card facility	300		300
Total cash, cash equivalents, and restricted cash	$	41,009	$	16,610

Allowance for Credit and Other Losses

The Company records its accounts receivable at sales value and maintains an allowance for its current estimate of expected credit losses from customers. Provisions for expected credit losses are estimated based on historical experience, assessment of specific risk, review of outstanding invoices, and forecasts about the future. The Company establishes specific reserves for customers in an adverse financial condition and adjusts for its expectations of changes in conditions that may impact the collectability of outstanding receivables.

Changes in the Company's allowance for credit and other losses were as follows:


	Three Months Ended March 31,
		2026		2025
Beginning balance		$	723	$	653
Changes in current-period provision		(62)		158


Ending balance		$	661	$	811

Inventory

Details of inventory were as follows:


	March 31, 2026		December 31, 2025
Raw materials	$	919	$	330
Finished goods	17,275		14,961
Total inventory	$	18,194	$	15,291

Property and Equipment, net

Property and equipment consisted of the following:


	March 31, 2026		December 31, 2025
Tooling and manufacturing equipment	$	2,645	$	2,249
Computer equipment	524		455
Furniture and fixtures	194		194
Software	47		46
Leasehold improvements	3		3
Total property and equipment	3,413		2,947
Less: accumulated depreciation and amortization	(2,693)		(2,652)
Property and equipment, net	$	720	$	295

Depreciation and amortization expense on property and equipment was $41 and $33 for the three months ended March 31, 2026 and March 31, 2025, respectively. For the three months ended March 31, 2026 and March 31, 2025, the Company allocated $11 and $29, respectively, of depreciation and amortization expense related to tooling and manufacturing equipment within cost of revenue on the unaudited condensed consolidated statements of operations and comprehensive income (loss). The remaining depreciation and amortization expense related to property and equipment was recorded within general and administrative expenses.

Intangible Assets, net

The carrying amounts of intangible assets consisted of the following:


	March 31, 2026
	Gross carrying amount		Accumulated amortization		Net carrying amount
Trademarks and patents	$	857	$	(457)	$	400
Internally developed software	1,868		(520)		1,348
Total intangible assets	$	2,725	$	(977)	$	1,748


	December 31, 2025
	Gross carrying amount		Accumulated amortization		Net carrying amount
Trademarks and patents	$	778	$	(434)	$	344
Internally developed software	1,447		(400)		1,047
Total intangible assets	$	2,225	$	(834)	$	1,391

Amortization expense of intangible assets was $144 and $86 for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026 and 2025, the Company recorded $120 and $65, respectively, of amortization expense related to internally developed software within cost of revenue on the unaudited condensed consolidated statements of operations and comprehensive income (loss). The remaining amortization expense related to trademarks and patents was recorded within general and administrative expenses.

As of March 31, 2026, the estimated future amortization expenses and reconciliation to total intangible assets consisted of the following:


Year	Amount
Remaining nine months of 2026	$	425
2027	476
2028	228
2029	38
2030	26
Thereafter	54
Total future amortization expenses	1,247
Intangible assets not yet subject to amortization	501
Total intangible assets	$	1,748

Accrued and Other Expenses

Accrued and other expenses consisted of the following:


	March 31, 2026		December 31, 2025
Accrued payroll	$	4,246	$	4,206
Accrued sales discounts	1,391		3,881
Accrued sales returns	1,321		1,415
Accrued legal settlements	6,176		5,998
Other	4,001		3,927
Total accrued and other expenses	$	17,135	$	19,427

Changes in accrued warranty were as follows:


	Three Months Ended March 31,
		2026		2025
Accrued warranty, beginning of period		$	357	$	291
Settlements of warranty claims during the period		(172)		(187)
Provision for warranties issued during the period		92		124
Changes in provision for pre-existing warranties		42		77
Accrued warranty, end of period		$	319	$	305

Note 3. Deferred Revenue

Deferred revenue relates to performance obligations for which payments are received from customers prior to the satisfaction of the Company’s obligations to its customers. Deferred revenue primarily consists of amounts allocated to the mobile application, unspecified upgrade rights, added features, bug fixes, content, and subscription services and are recognized over the service period of the performance obligations, which ranges from 1 to 20 months.

The Company recognized $1,128 and $574 of revenue during the three months ended March 31, 2026 and 2025, respectively, that was included in the deferred revenue balance at the beginning of the respective period. Revenue for the three months ended March 31, 2025 included a reduction of revenue of $451 relating to the correction of immaterial misstatements from previous periods.

Note 4. Debt and Other Financing Arrangements

The Company’s indebtedness consisted of the following:


	March 31, 2026		December 31, 2025
Term loan facility payable to WTI, net	$	5,191	$	5,609
Line of credit	13,353		6,932
Financed insurance premium	224		489
Total debt	18,768		13,030
Less: current portion	(16,818)		(10,567)
Total long-term debt, net	$	1,950	$	2,463

The carrying value of the Company’s long-term debt, net approximate its fair value.

WTI Loan Facility

On September 11, 2024, (the "Effective Date"), OBCI, as the borrower, entered into a Loan Facility Agreement (the “Loan Facility Agreement”) with WTI Fund X, Inc. and WTI Fund XI, Inc. (collectively, “WTI”) for a term loan facility of up to $15,000 (the “WTI Loan Facility”).

The WTI Loan Facility consists of two tranches. The first tranche of $10,000 was available at closing and through September 30, 2024, with $2,500 of the first tranche availability extendable until December 31, 2024 (the “First Tranche Commitment”). The second tranche of $5,000 (the “Second Tranche Commitment,” or together with the First Tranche Commitment, the “Loan Commitments”) per the initial Loan Facility Agreement was available through August 15, 2025 and upon achievement of (a) at least $48,600 in revenue for the period that commenced October 1, 2024 and ended June 30, 2025 (the “Second Tranche Condition Period”), (b) total cash burn during the Second Tranche Condition Period not to exceed $600 for such period, (c) receipt by the Company of at least $6,000 of net proceeds from an equity financing during a period commencing on the closing date and ending on the second tranche borrowing date, and (d) receipt by WTI of the Company’s then-current, board-approved operating and financing plan to WTI's satisfaction, as well as compliance with certain reporting conditions. As of March 31, 2026, the Company was in compliance with all covenants under the WTI Loan Facility.

The Company initiated its first drawdown under the WTI Loan Facility of $7,500 (the “Initial Loan”) shortly after finalizing the Loan Facility Agreement in September 2024. WTI and the Company agreed to extend the remaining $2,500 of the First Tranche Commitment until March 31, 2025. The Company ultimately elected not to draw on the remainder of the First Tranche Commitment and, as a result, 62,500 unvested shares of the redeemable common stock described below were forfeited on March 31, 2025. In July 2025, WTI granted a 90-day extension to make the Second Tranche Commitment available through November 13, 2025. The terms of the Loan Facility Agreement were otherwise not modified in connection with the extension. The Company ultimately elected not to draw on the Second Tranche Commitment and, as a result, 125,000 unvested shares of redeemable common stock were forfeited on November 13, 2025.

Interest on the outstanding principal amounts under the WTI Loan Facility accrues at a rate per annum equal to the sum of the prime rate plus 3.5%, with a floor of 12%. Commencing on November 1, 2025 through maturity on January 1, 2028, the Company is required to make monthly interest and principal payments. Loans under the WTI Loan Facility also accrue 2.5% in payment-in-kind interest (“PIK Interest”) compounded monthly, and PIK Interest payments will be due and payable upon maturity of the loans. The interest rate on the outstanding principal amounts under the WTI Loan Facility for the three months ended March 31, 2026 was 12%. Accrued coupon interest and accrued payment-in-kind interest (“PIK interest”) are recorded within accrued and other expenses and within long-term debt, net, respectively on the unaudited condensed consolidated balance sheets.

As partial consideration for the availability and funding of the WTI Loan Facility, the Company and WTI Fund X, LLC (“Fund X”) and WTI Fund XI, LLC (“Fund XI”, and together with Fund X, the “WTI Funds”) entered into a Stock Issuance Agreement (the “WTI Stock Issuance Agreement”), dated as of the Effective Date. Pursuant to the WTI Stock Issuance Agreement, the Company issued to the WTI Funds an aggregate of 750,000 shares of redeemable common stock on the Effective Date, of which 187,500 shares of the redeemable common stock have been forfeited as described above.

The shares issued to WTI pursuant to the WTI Stock Issuance Agreement contain an embedded redemption option (the “Redemption Option”) such that WTI may elect to force the Company to redeem the shares that are no longer subject to forfeiture for a price of $8.40 per share. The Redemption Option may be exercised in whole or in part, at any time, from time to time, during the period commencing on the first trading day following the fifth anniversary of the Effective Date and continuing through the date which is 10 years after the Effective Date, subject to certain acceleration provisions set forth in the WTI Stock Issuance Agreement. Because the shares are redeemable at the option of the WTI Funds, the shares are recorded in mezzanine equity on the unaudited condensed consolidated balance sheets. The redeemable common shares were initially recorded at their fair value of $7.66 per share, which was an aggregate value of $4,308. The value of the redeemable common shares was determined using a combination of the value of the

Company's stock on the date of issuance and the theoretical value of a stand-alone put option valued using a Black-Scholes put option model discounted by a present value factor that considers the credit spread between an estimated Company specific discount rate and the risk-free rate of return. Because the shares are required to be redeemed at the option of WTI, based solely on the passage of time, and provided WTI did not elect to otherwise sell or transfer the shares beforehand, the carrying value of the shares will accrete to their redemption value of $8.40 per share from the issuance date through September 11, 2029, the date the Redemption Option first becomes exercisable. During the three months ended March 31, 2026, the WTI Funds sold to an unrelated third-party 310,000 shares of Owlet redeemable common stock previously classified in mezzanine equity. As redemption rights are not transferable, $2,439 of the mezzanine equity balance was reclassified to permanent equity upon transfer of the common shares outside of the WTI funds.

The Company allocated the lender fees (including the fair value of the vested shares) and third-party debt financing costs between the Initial Loan and the remaining, undrawn Loan Commitments. The costs allocated to the Initial Loan are accounted for as a discount and will be amortized across the term of the Initial Loan using the effective interest method. The costs allocated to the remaining, undrawn Loan Commitments were accounted for as loan commitment assets, which were recorded within Other assets on the unaudited condensed consolidated balance sheets and amortized to interest income (expense), net using the straight-line method over the commitment periods, due to uncertainty about the Company’s intent to access the Loan Commitments. The unamortized portion of the loan commitment assets was $0 as of March 31, 2026.

The Company recognized $293 and $222 of interest expense related to the amortization of debt financing costs of the WTI Loan Facility and $0 and $385 of interest expense related to the amortization of the loan commitment assets during the three months ended March 31, 2026 and March 31, 2025, respectively.

As of March 31, 2026, details of the WTI Loan Facility were as follows:


	March 31, 2026		December 31, 2025
Principal outstanding	$	6,259	$	7,012
Unamortized debt financing costs	(1,359)		(1,652)
Accrued PIK Interest	291		249
Net carrying value	$	5,191	$	5,609

ABL Line of Credit

On September 11, 2024, the Company, as guarantor, and its wholly-owned subsidiary, Owlet Baby Care, Inc. ("OBCI"), as borrower, entered into a credit and security agreement (the "Credit Agreement") with the financial institutions party thereto from time to time as lenders (collectively the “Lenders”) and ABL OPCO LLC, a Delaware limited liability company, in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

The Credit Agreement provides for an asset-based revolving credit line (the "ABL Line of Credit") with an initial maximum principal amount of up to $15,000, which increased to $20,000 on September 11, 2025 (the “Revolving Commitment”). The ABL Line of Credit is collateralized by substantially all of the Company's assets. Loans and other obligations under the Credit Agreement bear interest at a rate per annum equal to the 1-month Secured Overnight Financing Rate (subject to a floor of 3.5%) plus a margin, which varies between 7.5% and 8.5% depending on the Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), provided that the interest rate shall not exceed the maximum rate permitted under applicable law.

On March 31, 2026, there were $13,353 of outstanding borrowings under the Credit Agreement, which are recorded as a current liability on the unaudited condensed consolidated balance sheet based on the Company's intent and ability to repay the outstanding borrowings in the near term. The remaining borrowing base availability under the Credit Agreement was $3,944 as of March 31, 2026.

The ABL Line of Credit matures on September 10, 2027 (the “Maturity Date”). If for any reason the Credit Agreement is terminated or all outstanding loans and other obligations are paid in full and the ABL Line of Credit is terminated before the Maturity Date, the Company will be obligated to pay a prepayment fee equal to a percentage of the then-current Revolving Commitment, which percentage decreases on certain anniversary of the closing date.

The Credit Agreement contains representations, warranties, covenants, and events of default customary for agreements of this type. On June 11, 2025, the Company and OBCI, entered into a First Amendment to the Credit Agreement (the “First Amendment”) with the Lenders and the Administrative Agent. The First Amendment amends the Credit Agreement to (among other things) (i) modify certain financial covenants, including EBITDA covenants, required to be maintained by OBCI, (ii) increase the amount of capital expenditures that may be incurred by OBCI during certain fiscal years, and (iii) expand the eligibility of certain accounts receivable that OBCI can borrow against. Apart from the aforementioned changes, no modifications were made to other covenants, including the liquidity covenant. The liquidity covenant requires the Company to maintain liquidity of $4,000. Liquidity is defined as the sum of (x) Undrawn Availability, as defined in the Credit Agreement, on the asset-based line of credit, plus (y) unrestricted cash and funds held in deposit accounts. In addition, if the liquidity falls below $9,000, the Company is then subject to a minimum trailing-twelve-months EBITDA covenant as defined in the Credit Agreement. As of March 31, 2026, the Company was in compliance with all covenants under the Credit Agreement.

The unamortized portion of debt financing costs related to the Credit Agreement as of March 31, 2026 was $448 and is recorded as a loan commitment asset within other assets on the unaudited condensed consolidated balance sheets. These costs are amortized straight-line over the term of the Credit Agreement and recorded within interest income (expense), net on the unaudited condensed consolidated statement of operations and comprehensive income (loss).

The Company recognized $77 and $52 of interest expense related to the amortization of the loan commitment assets during the three months ended March 31, 2026 and March 31, 2025, respectively.

Financed Insurance Premiums

In 2025, the Company renewed a number of its insurance policies and entered into several new short-term commercial premium finance agreements with premium finance companies totaling $739 to be paid within one year, accruing interest at a weighted average rate of 8.0%. As of March 31, 2026, the remaining principal balance on the combined financed insurance premiums was $224.

Future Aggregate Maturities

As of March 31, 2026, future aggregate maturities of the WTI Loan Facility (including PIK interest) and Financed Insurance Premium payables were as follows:


Year	Amount
Remaining nine months of 2026	$	2,616
2027	3,551
2028	607
Total	$	6,774

Note 5. Commitments and Contingencies

Purchase and Other Obligations

The Company entered into a services and license agreement for cloud platform services in June 2024. The Company has a purchase obligation of $6,739 to be paid over a 48-month period beginning in June 2024 and $2,165 remains to be paid at March 31, 2026.

Tariffs

In February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA). As a result of this ruling, the Company may be eligible for a refund of tariffs previously paid on imported goods. As the recoverability and timing of any such refund remains uncertain, the Company has not recognized a receivable and corresponding offset to expense or asset as of March 31, 2026, and will not until such amounts are realized or realizable. The Company will continue to monitor these developments and their potential impact on the results of operations.

Litigation

The Company is involved in legal proceedings from time to time arising in the normal course of business. While any outcome related to such legal proceedings cannot be predicted with certainty, other than the matters discussed below, the Company believes that the outcome of these proceedings will not have a material impact on the Company’s financial position, results of operations, or liquidity.

In November 2021, two putative class action complaints were filed against the Company in the U.S. District Court for the Central District of California, the first captioned Butala v. Owlet, Inc., Case No. 2:21-cv-09016, and the second captioned Cherian v. Owlet, Inc., Case No. 2:21-cv-09293. Both complaints alleged violations of the Securities Exchange Act of 1934 (“Exchange Act”) against the Company and certain of its officers and directors on behalf of a putative class of investors who: (a) purchased the Company’s common stock between March 31, 2021 and October 4, 2021 (“Section 10(b) Claims”); or (b) held common stock in Sandbridge Acquisition Corporation (“SBG”) as of June 1, 2021, and were eligible to vote at SBG's special meeting held on July 14, 2021 (“Section 14(a) Claims”). Both complaints allege, among other things, that the Company and certain of its officers and directors made false and/or misleading statements and failed to disclose certain information regarding the FDA’s likely classification of Smart Sock as a medical device requiring marketing authorization.

On September 8, 2023, the Court ruled that while the Butala and Cherian cases were consolidated, there would be two distinct and separate classes to represent the Section 10(b) Claims and Section 14(a) Claims, respectively, and appointed lead plaintiffs and lead counsel for each class. Amended complaints were filed for each class on November 21, 2023, and then further amended in consolidated filings on December 22, 2023. The Company filed motions to dismiss the complaints on February 9, 2024 on behalf of itself and the named officers and directors. The plaintiffs filed oppositions to the motions to dismiss on March 24, 2024, and the

Company filed replies in support of the motions to dismiss on May 10, 2024. On August 5, 2024, the Court denied Owlet’s and its officers’ motions to dismiss the Section 10(b) Claims and the Section 14(a) Claims. On September 24, 2024, the Court entered a scheduling order in the case, setting trial to begin on February 17, 2026. On September 26, 2024, the Court granted Owlet’s and its officers’ motion for reconsideration regarding the Section 10(b) Claims and dismissed all claims arising out of statements made prior to the merger.

Following mediation, the parties to the Butala action reached agreements in principle to settle both the Section 10(b) Claims and the Section 14(a) Claims. The Section 10(b) Claims would be resolved for $3,500 and the Section 14(a) Claims would be resolved for $1,750. On January 31, 2025, the plaintiffs filed motions seeking preliminary approval of the settlements of the Section 10(b) Claims and Section 14(a) Claims. On September 15, 2025, the Court granted preliminary approval of the settlement of the Section 14(a) Claims. On September 29, 2025, the Court granted preliminary approval of the settlement of the Section 10(b) Claims. A final fairness hearing on both settlements was originally scheduled for February 6, 2026, and was subsequently rescheduled by the Court to February 25, 2026. The fairness hearing was held on February 25, 2026, and final approval of the settlements remains pending. In accordance with ASC 450, as these amounts became probable and estimable, the Company recognized $5,250 of general and administrative expense on the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2024 and the related liability was recorded in accrued and other expenses on the consolidated balance sheet at December 31, 2024. In October 2025, the Company paid cash in full settlement for both the Section 14(a) Claims and the Section 10(b) Claims and paid out the amounts to the escrow agent required for their resolution. The Company paid $3,500 cash in full settlement of the Section 10(b) Claims. In relation to the Section 14(a) Claims, the Company paid $591 in cash, while the Company's insurance provider contributed the other $1,159, in full settlement of the Section 14(a) Claims. The insurance portion of this settlement was recorded as an insurance loss recovery in general and administrative expense on the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2025. For both the Section 10(b) Claims and the Section 14(a) Claims, the total cash paid to the escrow agent was $5,250, which includes the amount paid by the Company's insurance provider, and is classified as restricted cash as of March 31, 2026. The related liability is recorded in accrued and other expenses on the unaudited condensed consolidated balance sheet as of March 31, 2026.

Further, on August 26, 2024 and October 3, 2024, investors filed in the U.S. District Court for the Central District of California, derivatively on behalf of the Company, complaints asserting claims for violations of Section 14(a) of the Exchange Act, as well as state law claims, including breach of fiduciary duty, unjust enrichment and waste of corporate assets. One complaint (captioned Janet Vargas, Derivatively on Behalf of Nominal Defendant Owlet, Inc., Case No. 2:24 cv-07258-FLA-PVC) asserts claims against twelve of the Company’s current or former directors and officers and six current or former directors and officers of Sandbridge Acquisition Corporation. The other (captioned Nathan Capleton, Derivatively on Behalf of Nominal Defendant Owlet, Inc., Case No. 2:24 cv-08536-JAK-MAA) asserts claims against eleven of the Company’s current or former directors. Both complaints leverage the allegations made in one of the securities class action complaints. Neither complaint specifies the damages claimed in the action.

On December 13, 2024, these two complaints were consolidated into a single action captioned Vargas v. Workman, et al., No. 2:24-cv-07258-FLA (C.D. Cal.) On February 7, 2025, the plaintiffs filed an amended consolidated complaint asserting the claims previously made in the two derivative complaints. The parties in the Vargas action reached agreements in principle to settle, and plaintiffs filed a joint Notice of Settlement with the Court on March 3, 2025. On March 6, 2025, the Court vacated deadlines in the Vargas action in light of the plaintiffs’ settlement notice, and set April 2, 2025 as the deadline for plaintiffs to file a motion for preliminary approval of the settlement. On March 31, 2025, the plaintiffs filed a joint stipulation with the Court to extend that deadline to April 9, 2025. The Court so ordered the stipulation on April 2, 2025, and the plaintiffs filed the motion for preliminary approval of the settlement on April 9, 2025. On September 10, 2025, the Court granted preliminary approval of the settlement. A final fairness hearing on the settlement was originally scheduled for February 6, 2026, and was subsequently rescheduled by the Court to February 25, 2026. The fairness hearing was held on February 25, 2026, and final approval of the settlement remains pending. The parties have agreed to specific corporate governance reforms Owlet would implement and to an unopposed request to the Court for $675 in attorneys’ fees for securing such reforms.

In accordance with ASC 450, as these amounts became probable and estimable, the Company recorded $675 of general and administrative expense on the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2025. The related liability is recorded in accrued and other expenses on the unaudited condensed consolidated balance sheet as of March 31, 2026. The Company expects to pay this expense in 2026.

Indemnification

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless, and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance coverage that may reduce its exposure and enables the Company to recover a portion of any future amounts paid.

Note 6. Stock-based Compensation

The Company has various stock compensation plans, which are more fully described in Part II, Item 8 “Financial Statements and Supplementary Data - Note 8 to the Consolidated Financial Statements - Stock-based Compensation” in its 2025 Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2025.

Stock-based Compensation Expense

Total stock-based compensation was recognized as follows:


	Three Months Ended March 31,
		2026		2025
General and administrative		$	2,138	$	779
Sales and marketing		545		455
Research and development		807		423
Total stock-based compensation		$	3,490	$	1,657

The Company capitalized stock-based compensation attributable to internally developed software of $52 and $27 for the three months ended March 31, 2026, and March 31, 2025.

As of March 31, 2026, the Company had $5,790 of unrecognized stock-based compensation costs related to unvested RSUs that will be recognized over a weighted-average period of 0.8 years.

Equity Incentive Plan

Under the 2021 Incentive Award Plan, the Company has the ability to grant options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance stock units (“PSUs”), dividend equivalents, or other stock or cash-based awards to employees, directors, or consultants. Option awards are generally granted with an exercise price equal to the fair value of the Company’s common stock at the date of grant. Options and PSU awards generally vest over a period of four years. RSUs are generally subject to a four year vesting term with 25% vesting after one year and quarterly thereafter, or on a two year vesting term with 50% after one year and the remaining after the second year, or a one year vesting term with 100% after one year, depending on grant reason. RSU grants to directors typically vest at the earlier of one year from the date of grant or the next annual shareholder meeting and, in certain circumstances, vest immediately. RSAs generally vest over less than one year.

RSU activity was as follows:


	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2025	2,193,755	$	6.71
Granted	26,376	9.99
Vested	(756,878)	4.74
Forfeited	(22,038)	9.76
Outstanding as of March 31, 2026	1,441,215	$	7.82

During the three months ended March 31, 2026, 62,499 PSUs vested. Stock-based compensation cost associated with these awards was recognized during the year ended December 31, 2025; accordingly, no PSU-related cost was recognized during the three months ended March 31, 2026. As of March 31, 2026, 312,500 unvested PSUs were outstanding with a weighted-average grant date fair value

of $11.96. Related to these unvested PSUs, there was $3,109 of unrecognized stock-based compensation costs that as of March 31, 2026 was estimated to be recognized over a weighted-average period of 1.98 years.

In connection with Jonathan Harris' separation from the Company in April 2026, the Company accelerated vesting on his outstanding RSU and PSU awards. See Note 11 for additional details.

Note 7. Common Stock Issuance, Redeemable Common Stock, Common Stock Warrants, and Convertible Preferred Stock

October 2025 Offering

On October 23, 2025, the Company completed an underwritten public offering in which it issued and sold 4,196,000 shares of its common stock at a price of $7.15 per share. Subsequently, the underwriters exercised their over-allotment option for an additional 629,400 shares, which settled after the initial closing and increased the total shares issued in the offering to 4,825,400. From this offering, the Company received net proceeds of $32,109 after deducting underwriting discounts and commissions.

The offering expenses with third parties were $639, of which $0 in issuance costs were unpaid as of March 31, 2026. The issuance costs associated with the October 2025 Offering were recorded as a reduction to additional paid-in capital on the unaudited condensed consolidated balance sheets.

September 2024 Offering

On September 11, 2024, the Company completed an underwritten public offering in which it issued and sold 3,135,136 shares of its common stock at a price of $3.70 per share. The net proceeds received by the Company were $10,590 after deducting underwriting discounts and commissions.

The Company also issued, as a portion of the underwriting compensation payable to the underwriter, a warrant to purchase up to 125,405 shares of common stock (which was subsequently transferred to certain affiliates of the underwriter, the “Titan Warrants”). The Titan Warrants are accounted as a nonemployee stock-based award as it represents compensation for underwriter services. The compensation cost associated with the Titan Warrants was $382, and was recorded as a direct and incremental issuance cost of the associated common stock offering that was earned upon the closing and issuance of the common stock. The Titan Warrants are classified as equity and included within additional paid-in capital on the unaudited condensed consolidated balance sheets.

The Titan Warrants became exercisable on March 13, 2025 at an exercise price of $4.63 and have a term of five years from such initial exercise date. As of March 31, 2026, 30,097 of the Titan Warrants have been exercised.

Redeemable Common Stock

As discussed in Note 4, in September 2024 as partial consideration for the availability and funding of the WTI Loan Facility, the Company issued to the WTI Funds an aggregate of 750,000 shares of common stock. The Company also granted the WTI Funds the Redemption Option discussed in Note 4. The vested shares are recorded in mezzanine equity on the unaudited condensed consolidated balance sheets and are being accreted to the redemption value at the date the redemption feature first becomes exercisable. As discussed in Note 4, 62,500 unvested shares of redeemable common stock were forfeited on March 31, 2025, and 125,000 unvested shares of redeemable common stock were forfeited on November 13, 2025.

During the three months ended March 31, 2026, WTI elected to sell to an unrelated third-party 310,000 shares of redeemable common stock. There were 252,500 redeemable common shares remaining pursuant to the Redemption Option at March 31, 2026.

August 2024 Exchange

On August 20, 2024, holders of the Series A convertible preferred stock (“Series A Preferred Stock”) of the Company elected to convert an aggregate of 15,721 shares of Series A Preferred Stock in exchange for an aggregate of 2,291,686 shares of the Company’s common stock, all as in accordance with the terms of the Certificate of Designation relating to the Series A Preferred Stock. As of March 31, 2026, the redemption value for the remaining shares of Series A convertible preferred stock is $11,479.

February 2024 Offering

On February 25, 2024, the Company entered into a private placement investment agreement with certain investors, pursuant to which the Company issued and sold to the investors (i) an aggregate of 9,250 shares of the Company’s Series B convertible preferred stock, par value $0.0001 per share and (ii) warrants to purchase an aggregate of 1,799,021 shares of the Company's common stock, par value $0.0001 per share (the “Series B Warrants”), for an aggregate gross purchase price of $9,250.

As of March 31, 2026, the redemption value for Series B convertible preferred stock is $9,250. None of the Series B convertible preferred stock had been converted as of March 31, 2026.

The Series B convertible stock is accreting to its redemption value, starting from the issuance date to the date at which the shares become redeemable on March 1, 2029. Accretion was recorded as a deemed dividend. There are no outstanding Series B Warrants as of March 31, 2026, as they have all been exchanged for newly issued shares of the Company's common stock, see Exchange Agreement - Series A and Series B Warrants below.

February 2023 Offering

On February 17, 2023 the Company entered into private placement investment agreements with certain investors, pursuant to which the Company issued and sold to the investors (i) an aggregate of 30,000 shares of the Company’s Series A convertible preferred stock, par value $0.0001 per share and (ii) warrants to purchase an aggregate of 7,871,712 shares of the Company’s common stock (“Series A Warrants”) for an aggregate purchase price of $30,000.

Each of the Series A Warrants sold in the private placement offering is exercisable for one share of common stock at an exercise price of $4.66 per share, is immediately exercisable, and will expire on February 17, 2028. As the Series A Warrants could require cash settlement in certain scenarios, the warrants were classified as liabilities upon issuance and were initially recorded at an aggregate estimated fair value of $26,133. The total proceeds from the offering were first allocated to the liability classified warrants, based on their fair values, with the residual $3,867 allocated to the Series A convertible preferred stock.

The Series A convertible stock is accreting to its redemption value, starting from the issuance date to the date at which the shares become redeemable on February 17, 2028. Accretion will be recorded as a deemed dividend. There are 265,597 outstanding Series A Warrants as of March 31, 2026, as the majority of the previously outstanding Series A Warrants have been exchanged for newly issued shares of the Company's common stock, See Exchange Agreement - Series A and Series B Warrants below.

SBG Common Stock Warrants

As a result of the merger completed with SBG on July 15, 2021 (the “Merger”), the Company continues to record liabilities for warrants issued by SBG prior to the Merger.

Pursuant to the SBG initial public offering, SBG sold warrants to purchase an aggregate of 821,428 shares of the Company’s common stock at a price of $161.00 per share (“SBG Public Warrants”). Following the closing of the Initial Public Offering on September 17, 2020, the Company completed the sale of warrants to purchase an aggregate of 471,428 shares of the Company’s common stock at a price of $161.00 per share in a private placement to Sandbridge Acquisition Holdings LLC (the “SBG Private Placement Warrants”). Together, the SBG Public Warrants and SBG Private Placement Warrants are referred to as the “SBG Common Stock Warrants.” The SBG Public Warrants became exercisable 12 months from the closing of the Initial Public Offering. The SBG Common Stock Warrants will expire five years after the completion of the Merger or earlier upon redemption or liquidation. None of the SBG Common Stock Warrants have been exercised as of March 31, 2026.

SVB Warrants

In March 2023, the Company granted Silicon Valley Bank, now a division of First Citizens Bank and Trust Company (“SVB”) a warrant to purchase 10,714 shares of the Company’s common stock at a price of $5.32 per share, expiring on March 27, 2035 (the “SVB Warrants”) in connection with the first amendment to the Third Amended and Restated Loan and Security Agreement (as amended) between the Company and SVB (as amended, the “LSA”). On September 11, 2024, the LSA was terminated with no obligations outstanding thereunder. The SVB Warrants, which were valued at $43, are classified as equity and included within additional paid-in capital on the unaudited condensed consolidated balance sheets. None of the SVB Warrants have been exercised as of March 31, 2026.

Common Stock Warrants

The following table summarizes issuable shares of the Company’s common stock based on warrant activity for the three months ended March 31, 2026:


	December 31, 2025	Shares Issuable by New Warrants	Shares Purchased by Exercise	March 31, 2026
SBG Public Warrants	821,428	—	—	821,428
SBG Private Placement Warrants	471,428	—	—	471,428
Series A Warrants	265,597	—	—	265,597

SVB Warrants	10,714	—	—	10,714
Titan Warrants	95,308	—	—	95,308
Total	1,664,475	—	—	1,664,475

Exchange Agreement - Series A and Series B Warrants

As of March 31, 2025, 7,871,712 Series A and 1,799,021 Series B Warrants were outstanding and were adjusted to fair value during the three months ended March 31, 2025. On August 7, 2025, the Company and certain holders (the “Holders”) of the Company’s Series A Warrants and Series B Warrants entered into an Exchange Agreement, in which the Holders agreed to exchange with the Company their Series A Warrants relating to an aggregate of 7,215,737 shares of common stock and, if applicable, their Series B Warrants relating to an aggregate of 1,799,021 shares of common stock, for an aggregate of 5,426,429 newly issued shares (collectively, the “Exchange Shares”) of common stock (collectively, the “Exchanges”). On October 10, 2025 the Company consummated the Exchange Agreement and the issuance of the Exchange Shares. During the year, the Company made mark to market adjustments to adjust the Series A and Series B warrants subject to the exchange to their fair value through the modification date on August 7, 2025. On the modification date, the fair value of the warrants were adjusted to reflect the fair value of the Exchange Shares, and were subsequently marked to their fair value up to the exchange date. This resulted in a year-to-date fair value adjustment of $23,278 for the year ended December 31, 2025 within common stock warrant liability adjustment on the consolidated statement of operations and comprehensive income (loss). Upon completing the Exchange, the Company recorded a decrease in the common stock warrant liabilities of $46,884, and issued 5,426,429 shares of common stock at a fair value of $46,884.

Apart from the aggregate 4,412,930 common shares issued to Series A Warrant holders as part of the Exchange Agreement, as of March 31, 2026 there were 265,597 Series A Warrants that were not subject to the terms of the Exchange Agreement and, as of March 31, 2026, represented 265,597 shares of issuable common stock according to the original terms of the Series A Warrants. Refer to Note 8, Fair Value Measurements, for further discussion on fair value considerations.

Note 8. Fair Value Measurements

The Company’s assets and liabilities measured and reported in the financial statements at fair value on a recurring basis were as follows:


	March 31, 2026
	Level 1		Level 2		Level 3		Balance
Assets:
Money market funds	$	10,072	$	—	$	—	$	10,072
Total assets	$	10,072	$	—	$	—	$	10,072
Liabilities:
SBG Public Warrants	$	—	$	—	$	—	$	—
SBG Private Placement Warrants	—		—		—		—
Series A Warrants	—		—		648		648
Total liabilities	$	—	$	—	$	648	$	648

	December 31, 2025
	Level 1		Level 2		Level 3		Balance
Assets:
Money market funds	$	17,398	$	—	$	—	$	17,398
Total assets	$	17,398	$	—	$	—	$	17,398
Liabilities:
SBG Public Warrants	$	—	$	—	$	—	$	—
SBG Private Placement Warrants	—		—		—		—
Series A Warrants	—		—		3,273		3,273
Total liabilities	$	—	$	—	$	3,273	$	3,273

Money market funds are included within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

The SBG Public Warrants and SBG Private Placement Warrants as of March 31, 2026 are presented as Level 3 measurements, relying on unobservable inputs reflecting the Company’s own assumptions. Level 3 measurements, which are not based on quoted prices in active markets, introduce a higher degree of subjectivity and may be more sensitive to fluctuations in stock price, volatility rates, and U.S. Treasury Bond rates.

The Company measured the fair value of both the SBG Public Warrants and the SBG Private Placement Warrants as of March 31, 2026 and December 31, 2025 using the Black-Scholes option pricing model with the following assumptions:


SBG Common Stock Warrants - Black-Scholes Inputs	March 31, 2026			December 31, 2025
OWLT stock price	$	5.14		$	16.19
Exercise price of warrants	$	161.00		$	161.00
Term in years	0.29			0.54
Risk-free interest rate	3.70		%	3.58		%
Volatility	115.00		%	80.00		%

The Series A Warrants presented as Level 3 measurements rely on unobservable inputs reflecting the Company’s own assumptions.

The Company measured the fair value of the Series A Warrants as of March 31, 2026 and December 31, 2025, using the Black-Scholes option pricing model with the following assumptions:


Series A Warrants - Black-Scholes Inputs	March 31, 2026			December 31, 2025
OWLT stock price	$	5.14		$	16.19
Exercise price of warrants	$	4.66		$	4.66
Term in years	1.88			2.13
Risk-free interest rate	3.77		%	3.48		%
Volatility	82.00		%	75.00		%

The following table presents a reconciliation of the Company’s SBG Public Warrants, SBG Private Placement Warrants, and Series A Warrants (together, the “Level 3 Warrants”) measured at fair value on a recurring basis as of March 31, 2026:


	Level 3 Warrants
Balance as of December 31, 2025	$	3,273
Change in fair value included within common stock warrant liability adjustment	(2,625)
Balance as of March 31, 2026	$	648

There were no transfers between Level 1 and Level 2 in the periods reported. The SBG Public Warrants and SBG Private Placement Warrants were transferred into Level 3 in 2023.

Equity-Classified Warrants

The fair value of the Titan Warrants on September 11, 2024 was $382. The Company measured the fair value of the Titan Warrants at issuance on September 11, 2024, using the Black-Scholes option pricing model with the following assumptions:


Titan Warrants - Black-Scholes Inputs	September 11, 2024
OWLT stock price	$	4.35
Exercise price of warrants	$	4.63
Term in years	5.50
Risk-free interest rate	3.47		%
Volatility	85.00		%

Mezzanine-Classified Redeemable Common Stock

As described in Note 4, the vested shares issued to WTI are contingently redeemable at the option of the holder during the put period and are recorded in mezzanine equity on the unaudited condensed consolidated balance sheets. The vested redeemable common shares were recorded at their fair value of $7.66 per share, which was an aggregate value of $4,308. The value of the redeemable common shares was determined using a combination of the value of the Company's stock on the date of issuance and the theoretical value of a stand-alone put option valued using a Black-Scholes put option model discounted by a present value factor that considers the credit spread between an estimated Company specific discount rate and the risk-free rate of return. The valuation model used the following assumptions:


Redeemable Common Stock - Valuation Inputs	September 11, 2024
Common stock value per share	$	4.35
Put price	$	8.40
Term in years	5.00
Risk-free interest rate	3.42		%
Volatility	85.00		%
Credit spread	9.27		%
Present value discount	63.49		%

Note 9. Net Income (Loss) Per Share

Basic and diluted net income (loss) per share of common stock and redeemable common stock is presented in conformity with the two-class method required for participating securities. Under the two-class method, net income (loss) is allocated to each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income (loss) available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Income and losses are shared pro rata between redeemable and non-redeemable common stock based on their respective weighted average shares outstanding.

The Company considers its convertible preferred stock to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the holders of the Company’s convertible preferred stock do not have a contractual obligation to share in the Company’s losses.

The following tables present the calculation of basic and diluted net income (loss) per share (in thousands, except share and per share amounts):


	Three Months Ended March 31,
	2026		2026		2025		2025
	Redeemable Common Stock		Common Stock		Redeemable Common Stock		Common Stock
Numerator:
Allocation of net income (loss) attributable to common stockholders	$	(44)	$	(3,292)	$	79	$	2,946
Accretion on convertible preferred stock	(11)		(837)		—		(847)
Accretion on redeemable common stock	13		(13)		21		(21)
Allocation of net income to participating securities	—		—		(14)		(330)
Allocated net income (loss) attributable to common stockholders, basic	$	(42)	$	(4,142)	$	86	$	1,748
Denominator:
Weighted average common shares outstanding, basic	363,333		27,415,908		562,500		15,383,287
Net income (loss) per share attributable to common stockholders, basic	$	(0.12)	$	(0.15)	$	0.15	$	0.11


	Three Months Ended March 31,
	2026		2026		2025		2025
	Redeemable Common Stock		Common Stock		Redeemable Common Stock		Common Stock
Numerator:
Allocation of net income (loss) attributable to common stockholders	$	(44)	$	(3,292)	$	79	$	2,946
Accretion on convertible preferred stock	(11)		(837)		—		(847)
Accretion on redeemable common stock	13		(13)		21		(21)
Allocation of net income to participating securities	—		—		—		(330)
Effect of dilutive securities	—		(2,624)		—		—
Allocated net income (loss) attributable to common stockholders, diluted	$	(42)	$	(6,766)	$	100	$	1,748
Denominator:
Weighted average common shares outstanding, basic	363,333		27,415,908		562,500		15,383,287
Effect of dilutive securities	—		148,681		125,000		—
Weighted average common shares outstanding, diluted	363,333		27,564,589		687,500		15,383,287
Net income (loss) per share attributable to common stockholders, diluted	$	(0.12)	$	(0.25)	$	0.15	$	0.11

The following table summarizes the common stock equivalents of potentially dilutive outstanding securities excluded from the computation of diluted net income (loss) per share due to their anti-dilutive effect:


	March 31,
	2026	2025
Stock options	228,508	377,012
RSUs	1,441,215	1,450,316
RSAs	—	107,636
PSUs	312,500	56,391
ESPP shares committed	55,621	51,073
Common stock warrants	1,398,878	11,099,708
Preferred stock	2,872,668	2,872,668
Total	6,309,390	16,014,804

The Company’s 200,536 unvested earnout shares described in Part II, Item 8 “Financial Statements and Supplementary Data - Note 9 to the Consolidated Financial Statements - Common Stock Issuance, Redeemable Common Stock, Common Stock Warrants, and Convertible Preferred Stock” in its Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2025 were excluded from the calculation of basic and diluted per share calculations as the vesting conditions have not yet been met as of March 31, 2026.

Note 10. Segments

The Company operates as a single operating segment. The Company’s Chief Operating Decision Maker ("CODM") is its Chief Executive Officer. All significant operating decisions are based upon analysis of the Company as one operating segment, which is the same as its reporting segment to allocate resources, make operating decisions, and evaluate financial performance.

The CODM considers consolidated net income (loss) to be the financial measure of segment profit and loss for monitoring budget versus actual results, perform variance analysis, and forecast future performance.

The CODM considers the impact of the significant segment expenses on net income, which are the same expenses presented on the unaudited condensed consolidated statements of operations and comprehensive income (loss), with the impact of stock-based compensation removed from the operating expense categories and presented separately when making operating decisions.

The measure of segment assets is reported on the unaudited condensed consolidated balance sheets as total assets. The CODM does not review segment assets at a level other than that presented in the Company's unaudited condensed consolidated balance sheets.

Revenue by geographic area is based on the delivery address of the customer and is summarized as follows:


	Three Months Ended March 31,
		2026		2025
United States		$	17,839	$	17,333
United Kingdom		1,761		1,207
Other		2,856		2,564
Total revenue		$	22,456	$	21,104

Other than the United States, no individual country exceeded 10% of total revenue for the three months ended March 31, 2026 and March 31, 2025.

The Company’s long-lived assets are composed of property and equipment and right of use assets, net, and are summarized by geographic area as follows:


	March 31, 2026		December 31, 2025
United States	$	234	$	207
International	542		157
Total long-lived assets, net	$	776	$	364

Note 11. Subsequent Events

Executive Transition

On April 3, 2026, the Board of Directors of the Company appointed Kurt Workman as President and Chief Executive Officer effective April 6, 2026 to succeed Jonathan Harris in these positions. Mr. Workman ceased serving as Executive Chairman of the Board but will remain a director of the Board.

In connection with Jonathan Harris’ separation from the Company, the Company and Mr. Harris entered into a Separation and Release Agreement (the “Separation Agreement”). Pursuant to the terms and conditions of the Separation Agreement, Mr. Harris will receive twelve months of continued base salary payments, a prorated 2026 bonus to be paid based on actual performance, and accelerated vesting of all of Mr. Harris’ outstanding equity awards. These equity awards constituted 208,334 of the PSUs and 196,430 of the RSUs reported as outstanding in Note 6, representing $2,073 and $511 of unrecognized stock-based compensation as of March 31, 2026 for PSUs and RSUs, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Report and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K and Form 10-K/A. Certain statements we make under the following discussion and analysis constitute “forward-looking statements” under the Reform Act. See “Cautionary Note Regarding Forward-Looking Statements” in this Report. You should consider our forward-looking statements in light of the risks discussed in our unaudited condensed consolidated financial statements, related notes and other financial information appearing elsewhere in this Report, the section entitled “Risk Factors” in our Form 10-K, Form 10-K/A and this Report, and our other filings with the SEC. Note that amounts included in the following discussion and analysis are presented in thousands and may not sum due to rounding.

Overview

Owlet is a leading pediatric health platform and the only company globally to offer U.S. FDA-cleared and internationally medically-certified wearable pediatric monitors for home use. Owlet's pediatric products and innovative software combine clinically tested monitoring systems, an integrated video platform, and a simple, easy-to-use app, providing parents with real-time health insights to stay informed on their child’s well-being, support restful sleep, and provide peace of mind anywhere.

Components of Operating Results

Revenue

We recognize revenue primarily from products and the associated mobile applications. Revenue is recognized when control of goods and services is transferred to customers in an amount that reflects the consideration expected to be received by us in exchange for those goods and services. A growing minority portion of revenue is generated from subscriptions to our Owlet360 service. Subscription revenue is recognized ratably over the term of the subscription agreement. Subscription agreement terms are either month-to-month or one year. Amounts billed in excess of revenue recognized are reported in deferred revenue on our unaudited condensed consolidated balance sheets.

Cost of Revenue

Cost of revenue consists of product costs, including contract manufacturing, shipping and handling, depreciation and amortization relating to tooling and manufacturing equipment and software, warranty replacement, fulfillment costs, warehousing, hosting and platform costs, and reserves for excess and obsolete inventory. Cost of revenue associated with Owlet360 mainly consists of app store distribution fees.

Operating Expenses

General and Administrative. General and administrative expenses consist primarily of salaries, benefits, stock-based compensation, and bonuses for finance and accounting, legal, human resources, operations, quality and administrative executives and employees; third-party legal, accounting, customer service, software, and other professional services; corporate travel and entertainment; depreciation and amortization of property and equipment, asset impairment charges, litigation settlement costs, insurance loss recovery, and facilities rent.

Sales and Marketing. Sales and marketing expenses consist primarily of salaries, commissions, benefits, stock-based compensation, and bonuses for sales and marketing employees and contractors; third-party marketing expenses such as social media and search engine marketing, retail marketing, email marketing, and print marketing.

Research and Development. Research and development expenses consist primarily of salaries, benefits, stock-based compensation, and bonuses for employees and contractors engaged in the design, development, maintenance, and testing of our products, platforms and services, including quality and clinical testing.

Other Income (Expense)

Interest Income (Expense), Net. Interest income (expense), net consists of interest incurred on our outstanding borrowings and amortization of debt financing costs. Interest income consists of interest earned on our money market funds and other cash and cash equivalents.

Common Stock Warrant Liability Adjustment. Mark to market adjustment to recognize the change in fair value of common stock warrant liabilities.

Other Income (Expense), Net. Other income (expense), net includes our net gain (loss) on foreign exchange transactions and transaction costs.

Income Tax Provision. Income tax provision consists primarily of U.S. federal and state income taxes related to the tax jurisdictions in which we conduct business.

Results of Operations

The following table sets forth our results of operations for the periods, indicated in thousands:


	Three Months Ended March 31,
		2026		2025
Revenue:
Hardware		$	19,779	$	20,704
Subscription		2,677		400
Total revenue		22,456		21,104
Cost of revenue:
Hardware		9,344		9,626
Subscription		873		152
Total cost of revenue		10,217		9,778
Gross profit		12,239		11,326
Operating expenses:
General and administrative		9,302		7,092
Sales and marketing		4,473		4,002
Research and development		3,956		2,903
Total operating expenses		17,731		13,997
Operating loss		(5,492)		(2,671)
Other income (expense):
Interest expense, net		(683)		(991)
Common stock warrant liability adjustment		2,625		6,687
Other income (expense), net		221		12
Total other income (expense), net		2,163		5,708
Income (loss) before income tax provision		(3,329)		3,037
Income tax provision		(7)		(12)
Net income (loss) and comprehensive income (loss)		$	(3,336)	$	3,025
Accretion on convertible preferred stock		(848)		(847)
Allocation of net income to participating securities		—		(344)
Allocation of accretion on convertible preferred stock to redeemable common stock		11		—
Accretion on redeemable common stock		(13)		(21)
Allocation of net income to participating securities to redeemable common stockholders		—		14
Allocation of net (income) loss attributable to redeemable common stockholders		44		(79)
Net income (loss) attributable to redeemable common stockholders		(42)		86
Net income (loss) attributable to common stockholders		$	(4,142)	$	1,748

Net income (loss) per share attributable to redeemable common stockholders
Basic		$	(0.12)	$	0.15
Diluted		$	(0.12)	$	0.15
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to redeemable common stockholders
Basic		363,333		562,500
Diluted		363,333		687,500

Net income (loss) per share attributable to common stockholders
Basic		$	(0.15)	$	0.11
Diluted		$	(0.25)	$	0.11
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to common stockholders
Basic		27,415,908		15,383,287
Diluted		27,564,589		15,383,287

Revenue


	Three Months Ended March 31,	Change
(dollars in thousands)		2026		2025		$		%
Hardware		$	19,779	$	20,704	$	(925)	(4.5	%)
Subscription		2,677		400		2,277		569.3	%
Total revenue		22,456		21,104		1,352		6.4	%

The decrease in hardware revenue was primarily due to approximately $3,100 impact from a large retail partner tightening weeks of supply on hand as well as timing differences of load-ins to retailers, partially offset by approximately $1,800 decrease in retail discounts due to the timing of promotion load-in dates, and approximately $400 increased direct-to-consumer demand.

The increase in subscription revenue was due to an increase in subscribers for our Owlet360 service and higher average revenue per user.

Cost of Revenue, Gross Profit, and Gross Margin


	Three Months Ended March 31,	Change
(dollars in thousands)		2026			2025			$		%
Cost of revenue:
Hardware		$	9,344		$	9,626		$	(282)	(2.9	%)
Subscription		873			152			721		474.3	%
Total cost of revenue		10,217			9,778			439		4.5	%
Gross profit:
Hardware		10,435			11,078			(643)		(5.8	%)
Subscription		1,804			248			1,556		627.4	%
Total gross profit		12,239			11,326			913		8.1	%
Gross margin:
Hardware		52.8		%	53.5		%
Subscription		67.4		%	62.0		%
Total gross margin		54.5		%	53.7		%

The decrease in hardware cost of revenue was primarily due to the decrease in product sales. The decrease in hardware gross margin was primarily due to the impact of tariffs, partially offset by favorable product mix and lower direct product and fulfillment costs.

The increase in subscription cost of revenue was primarily due to increased subscriptions to our Owlet360 service. The increase in subscription gross margin is attributable to efficiencies gained due to a larger subscription base.

General and Administrative


	Three Months Ended March 31,	Change
(dollars in thousands)		2026		2025		$		%
General and administrative		$	9,302	$	7,092	$	2,210	31.2	%

The increase was driven primarily by approximately $1,400 of stock-based compensation, and by approximately $800 in increases of headcount related expenses, including salaries and benefits.

Sales and Marketing


	Three Months Ended March 31,	Change
(dollars in thousands)		2026		2025		$		%
Sales and marketing		$	4,473	$	4,002	$	471	11.8	%

The increase was driven primarily by approximately $300 in higher marketing personnel and consulting costs, $200 in expanded retail marketing spend, and $100 in increased stock-based compensation, partially offset by $100 in miscellaneous net decreases.

Research and Development


	Three Months Ended March 31,	Change
(dollars in thousands)		2026		2025		$		%
Research and development		$	3,956	$	2,903	$	1,053	36.3	%

The increase was driven primarily by approximately $800 in higher personnel costs, $400 in stock-based compensation, and $200 in regulatory testing and geographic expansion costs. These increases were partially offset primarily by approximately $300 in increased capitalized software costs.

Other Income (Expense), Net


	Three Months Ended March 31,	Change
(dollars in thousands)		2026		2025		$		%
Interest expense, net		$	(683)	$	(991)	$	308	(31.1	%)
Common stock warrant liability adjustment		$	2,625	$	6,687	$	(4,062)	(60.7	%)
Other income (expense), net		$	221	$	12	$	209	1741.7	%

The decrease in interest expense was driven primarily by a decrease in loan commitment amortization related to our current term loan facility due to the last loan commitment period ending in November 2025.

Fluctuations in our common stock warrant liability adjustment resulted from a decrease in our common stock price, and the related decrease in the fair value of liability-classified common stock warrants.

Changes in other income (expense) were driven primarily by a gain from insurance proceeds.

Non-GAAP Adjusted EBITDA

To supplement our unaudited condensed consolidated financial statements, which are prepared in conformity with U.S. GAAP, we use adjusted EBITDA, a non-GAAP financial measure, to enhance our understanding of U.S. GAAP financial measures, as an internal measure of business operating performance, and as a performance measure for benchmarking against our peers and competitors. We believe our presentation of adjusted EBITDA provides a meaningful perspective of the underlying operating performance of our current business and enables investors to better understand and evaluate our historical and prospective operating performance. We believe that this non-GAAP financial measure is an important supplemental measure of operating performance because it excludes items that vary from period to period without correlation to our core operating performance and highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. Due to the nature of the items being excluded, such items do not reflect future gains, losses, expenses or benefits and are not indicative of our future operating performance. We believe investors, analysts and other interested parties use adjusted EBITDA in evaluating issuers, and the presentation of these measures facilitates a comparative assessment of our operating performance in addition to our performance based on GAAP results.

Non-GAAP financial measures should not be considered as an alternative to net loss as a measure of financial performance or any other performance measure derived in accordance with GAAP, and should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Adjusted EBITDA is defined as net income (loss) adjusted for income tax provision, interest expense, net, depreciation and amortization, impairment of intangible assets, common stock warrant liability adjustment, stock-based compensation, and charges related to certain legal matters.

Adjusted EBITDA is not a recognized term under GAAP, and our presentation of this non-GAAP measure does not replace the presentation of our financial results in accordance with GAAP. Because all companies do not use adjusted EBITDA (and similarly

titled financial measures) in the same way, those measures as used by other companies may not be consistent with the way we calculate such measures. The non-GAAP financial measure included in this report should not be construed as a substitute for or better indicator of our performance than the most directly comparable GAAP financial measure. See the reconciliation table below for additional information regarding the non-GAAP financial measure included herein (in thousands):


	Three Months Ended March 31,
(dollars in thousands)		2026		2025
GAAP net income (loss)		$	(3,336)	$	3,025
Income tax provision		7		12
Interest expense, net		683		991
Depreciation and amortization		185		119
Impairment of intangible assets		1		5

Common stock warrant liability adjustment		(2,625)		(6,687)
Stock-based compensation		3,490		1,657

Charges related to certain legal matters		49		905

Non-GAAP Adjusted EBITDA		$	(1,546)	$	27

Liquidity and Capital Resources

We fund our operations primarily with proceeds from issuances of our equity securities, borrowings under our loan facilities, and sales of our products and services. As of March 31, 2026, we had cash and cash equivalents of $35,459, and additional availability of $3,944 on our line of credit. We believe our existing cash and cash equivalent balances, cash flows from operations, and committed credit lines will be sufficient to meet our long-term working capital and capital expenditure needs for at least the next 12 months. The accompanying condensed consolidated financial statements have been prepared on a going concern basis and accordingly, do not include any adjustments relating to the recoverability and classification of asset carrying amounts, or the amount and classification of liabilities that might result should we be unable to continue as a going concern. There can be no assurance that we will generate sufficient future cash flows from operations due to potential factors, including but not limited to inflation, recession, or reduced demand for our products. If revenue decreases from current levels, we may be unable to further reduce costs, or such reductions may limit our ability to pursue strategic initiatives and grow revenue in the future. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other business initiatives, our planned sales and marketing activities, the timing of new product introductions, market acceptance of our products, and overall economic conditions. To the extent that current and anticipated sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in increased dilution to our stockholders. If we were to incur additional debt financing, it would result in increased debt service obligations and the instruments governing such debt could require additional operating and financing covenants that would restrict our operations.

Tariffs announced in 2025 have adversely impacted our cost of goods sold and gross margins and may continue to affect cash flows if elevated tariff rates persist. On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under IEEPA. This ruling could result in tariff relief and may allow for the recovery of amounts previously paid, which we believe could be material. We are currently evaluating the potential effects of this decision on our financial condition and liquidity. The process for recovering previously paid duties/tariffs remains subject to ongoing proceedings with the U.S. Court of International Trade and U.S. Customs and Border Protection. We are actively monitoring these developments and are taking steps to preserve our rights with respect to any potential refunds.

Equity Financings

See Note 7 within the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report and refer to our Annual Report on Form 10-K filed with the SEC on March 9, 2026 for additional details regarding our common stock issuance, redeemable common stock, common stock warrants, and convertible preferred stock.

Debt and Other Financing Arrangements

See Note 4 within the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report and refer to our Annual Report on Form 10-K filed with the SEC on March 9, 2026 for additional details regarding our debt arrangements, including the expected maturity of such arrangements.

WTI Loan Facility

During the three months ended March 31, 2026, the WTI Funds sold to an unrelated third-party 310,000 shares of Owlet common stock previously classified in mezzanine equity due to the Redemption Option described in Note 4 within the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report. As redemption rights are not transferable, we reclassified $2,439 of the mezzanine equity balance to Stockholders' Equity Additional Paid-In Capital upon sale.

As of March 31, 2026 principal outstanding on the loan was $6,259. The net carrying value of the WTI Loan Facility was $5,191, which includes the outstanding principal and accrued PIK interest of $291, net of $1,359 in unamortized debt financing costs.

As of March 31, 2026, we were in compliance with all covenants under the WTI Loan Facility.

ABL Line of Credit

We, as guarantor, and our wholly-owned subsidiary, OBCI, as borrower, maintain an asset-based revolving credit facility (the “ABL Line of Credit”) with a maximum principal amount of up to $20,000 (the “Revolving Commitment”). The ABL Line of Credit is collateralized by substantially all of our assets.

As of March 31, 2026, there was $13,353 of outstanding borrowings under the ABL Line of Credit, and the remaining borrowing base availability was $3,944 as of March 31, 2026.

As of March 31, 2026, we were in compliance with all covenants under the Credit Agreement.

Financed Insurance Premium

In 2025, we renewed a number of our insurance policies and entered into several new short-term commercial premium finance agreements with premium finance companies totaling $739 to be paid within one year, accruing interest at a weighted average rate of 8.0%. As of March 31, 2026, the remaining principal balance on the combined financed insurance premiums was $224.

Cash Flows

The following table summarizes our cash flow (in thousands):


	Three Months Ended March 31,
	2026		2025
Net cash used in operating activities	$	(5,049)	$	(5,925)
Net cash used in investing activities	(415)		(110)
Net cash provided by financing activities	5,462		2,014
Net change in cash, cash equivalents, and restricted cash	$	(2)	$	(4,021)

Operating Activities

For the three months ended March 31, 2026, net cash used in operating activities was $5,049 as compared to net cash used in operating activities of $5,925 in the prior year. The positive change in operating cash flows was primarily driven by changes in assets and liabilities, particularly related to accounts receivable, inventory and accounts payable, as well as smaller common stock warrant liability adjustment compared to the prior year. These positive changes were partially offset by the $3,336 net loss recognized for the three months ended March 31, 2026, compared to the $3,025 net income recognized in the comparative prior year period.

Investing Activities

For both the three months ended March 31, 2026 and March 31, 2025, we used $415 and $110 respectively, to invest in various projects, primarily for the development and enhancement of our new subscription app.

Financing Activities

For the three months ended March 31, 2026 and March 31, 2025, net cash provided by financing activities was $5,462 and $2,014, respectively. The increase is primarily driven by higher net proceeds from short-term borrowings in the current period compared to the prior period.

Critical Accounting Policies and Estimates

There have been no material changes from the critical accounting policies and estimates disclosed in our Form 10-K and Form 10-K/A, other than policies disclosed in this Report.

Recent Tax Legislation

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.

Item 4. Controls and Procedures.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as such terms are defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to provide reasonable assurance that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of March 31, 2026, the effectiveness of our disclosure controls and procedures. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of March 31, 2026 due to the material weaknesses in our internal control over financial reporting described below.

Material Weaknesses in Internal Control over Financial Reporting

We identified material weaknesses in our internal control over financial reporting. The material weaknesses are as follows: We did not design and maintain an effective control environment commensurate with our financial reporting requirements. Specifically, we did not maintain a sufficient complement of personnel with an appropriate degree of internal controls and accounting knowledge, experience, and training commensurate with our accounting and financial reporting requirements. This material weakness contributed to the following material weaknesses:

•We did not design and maintain effective controls over the segregation of duties related to journal entries. Specifically, certain personnel have the ability to both create and post journal entries within the Company’s general ledger system. This material weakness did not result in any adjustments to the consolidated financial statements.

•We did not design and maintain effective controls over the accounting for the accuracy and existence of inventory, nor controls which verified the completeness and accuracy of accrued liabilities. Each of these material weaknesses resulted in immaterial adjustments within the year ended December 31, 2022 and the accrued liabilities material weakness resulted in immaterial adjustments within the year ended December 31, 2024, and in the interim periods ended March 31, 2025 and June 30, 2025.

•We did not design and maintain effective controls over the accounting for debt and equity arrangements, including convertible preferred stock, warrant arrangements, and stock-based compensation modifications. Each of these material weaknesses resulted in material adjustments to several account balances and disclosures in the consolidated financial statements as of and for the year ended December 31, 2019, and immaterial adjustments for the year ended December 31, 2024 and the interim period ended September 30, 2025.

•We did not design and maintain effective controls over IT general controls for information systems that are relevant to the preparation of our consolidated financial statements. Specifically, we did not design and maintain (i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately, (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate Company personnel, (iii) computer operations controls to ensure that critical batch jobs are monitored, and data backups are authorized and monitored, and (iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements. This material weakness did not result in any adjustments to the consolidated financial statements.

Additionally, each of the material weaknesses described above could result in a misstatement of one or more account balances or disclosures that would result in a material misstatement to the interim or annual consolidated financial statements that would not be prevented or detected.

Remediation Plan

We have been in the process of executing our plan to remediate the material weaknesses. The remediation measures are ongoing, and although not all inclusive, remediation measures include hiring additional accounting and financial reporting personnel and implementing additional policies, procedures and controls, all of which have and will continue to result in future costs for the Company.

We believe we have designed and implemented the internal controls necessary to remediate the material weakness related to debt and equity arrangements, including convertible preferred stock, warrant arrangements, and stock-based compensation modifications, as well as the material weakness related to the accuracy and existence of inventory. During the quarter ended March 31, 2026 we continued to operate and monitor performance of these remediation controls. In addition, during the quarter ended March 31, 2026, we began to design internal controls to address the material weakness related to accrued liabilities.

We believe we have designed and implemented the internal controls necessary to remediate the material weakness related to IT general controls for information systems that are relevant to the preparation of our consolidated financial statements, including internal controls over the segregation of duties related to journal entries. During the quarter ended March 31, 2026, we continued to operate and monitor performance of the related remediation controls.

The material weaknesses will not be considered remediated until our remediation plan has been completed, the applicable controls operate for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are operating effectively. As we continue to make progress towards remediation of these material weaknesses, we may determine the need to make further enhancements to the design of these controls.

Notwithstanding the above, our management believes that the unaudited condensed consolidated financial statements included in this Report state fairly in all material respects our financial position, results of operations and cash flows for the periods presented.

Changes in Internal Control over Financial Reporting

As described in the “Remediation Plan” above, there were changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

Item 1. Legal Proceedings.

From time to time, we may become involved in various legal proceedings that arise in the ordinary course of business. We evaluate any claims and lawsuits with respect to their potential merits, our potential defenses and counterclaims, and the expected effect on us of defending the claims and a potential adverse result. However, the results of any litigation, investigations or other legal proceedings are inherently unpredictable and expensive. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, damage to our reputation, and divert significant resources. If any legal proceedings were to be determined adversely to us, or we were to enter into a settlement agreement, we could be exposed to monetary damages or limits on our ability to operate our business, which could have an adverse effect on our business, financial condition and operating results. For a description of our legal proceedings, see Note 5, Commitments and Contingencies, within the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report, which is incorporated herein by reference.

Item 1A. Risk Factors.

In addition to the information contained in this Report, you should carefully consider the risk factors described in our Form 10-K and Form 10-K/A, which are incorporated herein by reference, which could materially affect our business, financial condition or results. There have been no material changes to the risk factors described in our Form 10-K and Form 10-K/A.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered sales of equity securities for the three months ended March 31, 2026 not previously reported on a Current Report on Form 8-K.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

(a) 2026 Annual Meeting of Stockholders Date

Our Board of Directors has set the date of the Company’s 2026 Annual Meeting of Stockholders (the “2026 Annual Meeting”) for July 10, 2026. The exact time and place of the 2026 Annual Meeting will be specified in our Notice of 2026 Annual Meeting and related proxy statement for the 2026 Annual Meeting.

Because the date of the 2026 Annual Meeting has been changed by more than 30 days from the first anniversary of our 2025 Annual Meeting of Stockholders, the Board has set a new deadline for the receipt of any stockholder proposals submitted for the 2026 Annual Meeting. If a stockholder desires to present a proposal for inclusion in our proxy statement for the 2026 Annual Meeting, the proposal must be submitted in writing to us for receipt not later than May 21, 2026. Additionally, to be included in our proxy materials, proposals must comply with the proxy rules relating to stockholder proposals, in particular Rule 14a-8 under the Exchange Act. Stockholders who wish to raise a proposal for consideration at the 2026 Annual Meeting, but who do not wish to submit a proposal for inclusion in our proxy materials pursuant to Rule 14a-8, should comply with our bylaws and deliver to us a copy of their proposal no later than May 21, 2026. As required by our bylaws, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide us with the information required by Rule 14a-19(b) under the Exchange Act. If a stockholder fails to timely provide such notice, the respective proposal need not be addressed in our proxy materials and the proxies may exercise their discretionary voting authority if the proposal is raised at the 2026 Annual Meeting. In either case, proposals should be sent to Owlet, Inc., 2940 West Maple Loop Drive, Suite 203, Lehi, Utah 84048 with attention to our Corporate Secretary.

(b) None.

(c) During the three months ended March 31, 2026, no directors or “officers” (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted, modified or terminated “Rule 10b5-1 trading arrangements” and/or “non-Rule 10b5-1 trading arrangements,” each as defined in Item 408 of Regulation S-K.

Item 6. Exhibits

Exhibit
Number

Description

Form

File No.

Exhibit

Filing Date

31.1*

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**

Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*

Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*

Inline XBRL Taxonomy Extension Schema Document.

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104*

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Filed herewith

**Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Owlet, Inc.

Date: May 11, 2026	By:	/s/ Kurt Workman
	Name:	Kurt Workman
	Title:	President and Chief Executive Officer
		(Principal Executive Officer)

Date: May 11, 2026	By:	/s/ Amanda Crawford
	Name:	Amanda Crawford
	Title:	Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

Owlet, Inc. 10-Q