owlt-20260930

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 September 30, 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 November 9, 2026, the registrant had 29,889,307 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’ Equity (Deficit) (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44

PART II.
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	48
	Signatures	49

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, the expected costs, timing and effects of our camera cable guard safety update and stop sale, 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, and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Form 10-K”). 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.

•Our estimated costs and net revenue, gross margin and cash flows impacts associated with the camera cable guard safety update and stop sale we initiated in November 2026 may differ materially from actual results, and the event leading to this development and the actions taken in response thereto may adversely affect demand for our products, subject us to regulatory action and product liability claims, and harm to our brand, reputation, and our relationships with retailers.

•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)


	September 30, 2026		December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	31,629	$	35,461
Restricted cash	300		5,550
Accounts receivable, net of allowance for credit losses of $607 and $723, respectively	28,651		22,931
Inventory	16,273		15,291
Prepaid expenses and other current assets	3,319		2,684
Total current assets	80,172		81,917
Property and equipment, net	1,170		295
Intangible assets, net	2,063		1,391
Other assets	2,257		2,028
Total assets	$	85,662	$	85,631
Liabilities, Mezzanine Equity, and Stockholders’ Equity
Current liabilities:
Accounts payable	$	11,984	$	11,967
Accrued and other expenses	15,278		19,427
Current portion of deferred revenue	3,634		2,282
Line of credit	11,010		6,932
Current portion of long-term and other debt	—		3,635
Total current liabilities	41,906		44,243
Long-term debt, net	—		2,463
Common stock warrant liabilities	610		3,273
Other long-term liabilities	113		197
Total liabilities	42,629		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 September 30, 2026 and December 31, 2025, respectively	8,651		7,151
Series B convertible preferred stock, $0.0001 par value; 9,250 and 9,250 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively	5,888		4,844
Redeemable common stock, 252,500 and 562,500 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively	2,010		4,418
Total mezzanine equity	16,549		16,413
Stockholders’ equity:
Common stock, $0.0001 par value, 107,142,857 shares authorized as of September 30, 2026 and December 31, 2025; 29,000,596 and 26,945,426 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively	3		3
Additional paid-in capital	336,128		326,244
Accumulated deficit	(309,647)		(307,205)
Total stockholders’ equity	26,484		19,042
Total liabilities, mezzanine equity, and stockholders' equity	$	85,662	$	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 September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Revenue:
Hardware	$	26,840	$	30,475	$	77,264	$	76,830
Subscription	3,587		1,513		9,484		2,776
Total revenue	30,427		31,988		86,748		79,606
Cost of revenue:
Hardware	12,922		15,324		33,289		37,403
Subscription	1,132		464		3,024		846
Total cost of revenue	14,054		15,788		36,313		38,249
Gross profit	16,373		16,200		50,435		41,357
Operating expenses:
General and administrative	7,005		6,240		25,823		20,325
Sales and marketing	4,580		4,924		15,002		13,239
Research and development	3,586		3,767		12,070		10,376
Total operating expenses	15,171		14,931		52,895		43,940
Operating income (loss)	1,202		1,269		(2,460)		(2,583)
Other income (expense):
Interest income (expense), net	75		(860)		(1,315)		(2,830)
Common stock warrant liability adjustment	143		4,266		2,663		(23,800)
Other income (expense), net	32		(479)		924		(430)
Loss on debt extinguishment	—		—		(2,209)		—
Total other income (expense), net	250		2,927		63		(27,060)
Income (loss) before income tax provision	1,452		4,196		(2,397)		(29,643)
Income tax provision	(28)		(9)		(45)		(54)
Net income (loss) and comprehensive income (loss)	$	1,424	$	4,187	$	(2,442)	$	(29,697)
Accretion on convertible preferred stock	(848)		(848)		(2,544)		(2,544)
Allocation of net income to participating securities	(51)		(506)		—		—
Allocation of accretion on convertible preferred stock to redeemable common stock	7		28		26		88
Accretion on redeemable common stock	(9)		(21)		(31)		(63)
Allocation of net income to participating securities to redeemable common stockholders	—		21		—		—
Allocation of net (income) loss attributable to redeemable common stockholders	(12)		(141)		25		1,023
Net income (loss) attributable to redeemable common stockholders	$	14	$	113	$	(20)	$	(1,048)
Net income (loss) attributable to common stockholders	$	511	$	2,720	$	(4,966)	$	(31,193)

Net income (loss) per share attributable to redeemable common stockholders
Basic	$	0.06	$	0.20	$	(0.07)	$	(1.86)
Diluted	$	0.05	$	0.19	$	(0.16)	$	(1.86)
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to redeemable common stockholders
Basic	252,500		562,500		289,038		562,500
Diluted	252,500		687,500		289,038		562,500

Net income (loss) per share attributable to common stockholders
Basic	$	0.02	$	0.17	$	(0.18)	$	(1.98)
Diluted	$	0.01	$	(0.05)	$	(0.27)	$	(1.98)
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to common stockholders
Basic	28,832,450		16,198,439		28,259,449		15,769,020
Diluted	29,569,621		19,313,512		28,331,049		15,769,020

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	$	237,992	$	(268,372)	$	(30,378)
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	—	—		—	—		—	—		—	—		1,621		—		1,621
Net income	—	—		—	—		—	—		—	—		—		3,527		3,527
Balance as of March 31, 2025	11,479	$	5,651	9,250	$	3,800	687,500	$	4,355	15,808,849	$	2	$	238,849	$	(264,845)	$	(25,994)
Accretion on convertible preferred stock	—	500		—	348		—	—		—	—		(848)		—		(848)
Accretion on redeemable common stock	—	—		—	—		—	21		—	—		(21)		—		(21)
Issuance of common stock for restricted stock units vesting	—	—		—	—		—	—		58,928	—		—		—		—
Exercise of common stock warrants	—	—		—	—		—	—		390,378	—		3,579		—		3,579
Stock-based compensation	—	—		—	—		—	—		—	—		1,539		—		1,539
Net loss	—	—		—	—		—	—		—	—		—		(37,411)		(37,411)
Balance as of June 30, 2025	11,479	$	6,151	9,250	$	4,148	687,500	$	4,376	16,258,155	$	2	$	243,098	$	(302,256)	$	(59,156)
Accretion on convertible preferred stock	—	500		—	348		—	—		—	—		(848)		—		(848)
Accretion on redeemable common stock	—	—		—	—		—	21		—	—		(21)		—		(21)
Issuance of common stock for restricted stock units vesting	—	—		—	—		—	—		120,742	—		—		—		—
Issuance of common stock for employee stock purchase plan	—	—		—	—		—	—		44,243	—		161		—		161
Issuance of common stock upon exercise of stock options	—	—		—	—		—	—		67,172	—		281		—		281
Exercise of common stock warrants	—	—		—	—		—	—		11,840	—		—		—		—
Stock-based compensation	—	—		—	—		—	—		—	—		1,253		—		1,253
Net income	—	—		—	—		—	—		—	—		—		4,187		4,187
Balance as of September 30, 2025	11,479	$	6,651	9,250	$	4,496	687,500	$	4,397	16,502,152	$	2	$	243,924	$	(298,069)	$	(54,143)

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) (continued)

(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, 2025	11,479	$	7,151	9,250	$	4,844	562,500	$	4,418	26,945,426	$	3	$	326,244	$	(307,205)	$	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	—	—		—	—		—	—		—	—		3,452		—		3,452
Net loss	—	—		—	—		—	—		—	—		—		(3,246)		(3,246)
Balance as of March 31, 2026	11,479	$	7,651	9,250	$	5,192	252,500	$	1,992	28,099,112	$	3	$	331,459	$	(310,451)	$	21,011
Accretion on convertible preferred stock	—	500		—	348		—	—		—	—		(848)		—		(848)
Accretion on redeemable common stock	—	—		—	—		—	9		—	—		(9)		—		(9)
Accrued bonus liability settled through issuance of common stock	—	—		—	—		—	—		32,032	—		158		—		158
Common stock withheld related to net settlement of equity awards	—	—		—	—		—	—		(28,574)	—		(146)		—		(146)
Issuance of common stock for restricted stock units vesting	—	—		—	—		—	—		577,442	—		—		—		—
Issuance of common stock upon exercise of stock options	—	—		—	—		—	—		133,454	—		207		—		207
Stock-based compensation	—	—		—	—		—	—		—	—		3,385		—		3,385
Net loss	—	—		—	—		—	—		—	—		—		(620)		(620)
Balance as of June 30, 2026	11,479	$	8,151	9,250	$	5,540	252,500	$	2,001	28,813,466	$	3	$	334,206	$	(311,071)	$	23,138
Accretion on convertible preferred stock	—	500		—	348		—	—		—	—		(848)		—		(848)
Accretion on redeemable common stock	—	—		—	—		—	9		—	—		(9)		—		(9)
Forfeiture of earnout shares	—	—		—	—		—	—		(200,536)	—		—		—		—
Common stock withheld related to net settlement of equity awards	—	—		—	—		—	—		(21,001)	—		(124)		—		(124)
Issuance of common stock for restricted stock units vesting	—	—		—	—		—	—		345,970	—		—		—		—
Issuance of common stock for employee stock purchase plan	—	—		—	—		—	—		60,532	—		243		—		243
Issuance of common stock upon exercise of stock options	—	—		—	—		—	—		2,165	—		9		—		9
Stock-based compensation	—	—		—	—		—	—		—	—		2,651		—		2,651
Net income	—	—		—	—		—	—		—	—		—		1,424		1,424
Balance as of September 30, 2026	11,479	$	8,651	9,250	$	5,888	252,500	$	2,010	29,000,596	$	3	$	336,128	$	(309,647)	$	26,484

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)


	Nine Months Ended September 30,
	2026		2025
Cash flows from operating activities
Net loss	$	(2,442)	$	(29,697)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	690		369
Stock-based compensation	9,351		4,351
Provision for credit losses	17		52
Common stock warrant liability adjustment	(2,663)		23,800
Amortization of debt financing costs	729		1,717
Accrued warrant exchange transaction costs	—		432
Loss on debt extinguishment	2,209		—
Settlement of cumulative PIK	(327)		—

Write-off of prepaid deposit	—		347
Other adjustments, net	186		370
Changes in assets and liabilities:
Accounts receivable	(5,737)		(16,547)
Prepaid expenses and other assets	(1,171)		(2,391)
Inventory	(984)		(4,127)
Accounts payable and accrued and other expenses	(4,058)		10,315
Lease liabilities	(53)		(82)

Deferred revenue	1,292		751

Net cash used in operating activities	(2,961)		(10,340)
Cash flows from investing activities
Purchase of property and equipment	(917)		(74)
Purchase of intangible assets	(173)		(62)
Capitalized internal-use software development costs	(923)		(318)
Net cash used in investing activities	(2,013)		(454)
Cash flows from financing activities


Proceeds from short-term borrowings	42,626		67,730
Payments of short-term borrowings	(39,267)		(55,397)

Payments of long-term borrowings	(7,520)		—

Employee taxes paid related to vesting and settlement of stock-based awards	(4,790)		(944)
Proceeds related to the issuance of common stock under stock plans	4,520		963
Debt financing costs paid	(280)		(174)
Issuance costs paid related to prior year common stock, preferred stock, and warrants	—		(276)
Warrant exchange transaction costs paid	(41)		(40)
Proceeds from exercise of common stock warrants	—		1,822
Other, net	644		539
Net cash provided by (used in) financing activities	(4,108)		14,223
Net change in cash, cash equivalents, and restricted cash	(9,082)		3,429
Cash, cash equivalents, and restricted cash at beginning of period	41,011		20,631
Cash, cash equivalents, and restricted cash at end of period	$	31,929	$	24,060

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)


	Nine Months Ended September 30,
	2026		2025
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	37	$	45
Cash paid for interest	880		1,146
Supplemental disclosure of non-cash investing and financing activities:

Accretion on preferred stock and redeemable common stock	$	2,575	$	2,607


Conversion of redeemable common stock to common stock	2,439		—
Accrued bonus liability settled through issuance of common stock	158		—

Purchases of property and equipment included in accounts payable	135		200
Purchases of intangible assets included in accounts payable	12		118

Stock-based compensation for software development	137		62

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 2026, and has generated negative cash flows from operations. The Company had an accumulated deficit of $309,647 as of September 30, 2026, and during the nine months ended September 30, 2026 and 2025, the Company had negative cash flows from operations of $2,961 and $10,340, respectively. As of September 30, 2026, the Company had $31,629 of cash on hand.

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

•As described in Note 4, Debt and Other Financing Arrangements, on June 26, 2026, the Company entered into a new debt financing arrangement with Wells Fargo Bank, National Association (“Wells Fargo”) for an asset-based revolving credit facility (the “Revolving Facility”) in a maximum principal amount of up to $25,000. The Revolving Commitment may be increased by agreement of the parties from up to $25,000 to up to $35,000 (in minimum increments of at least $5,000). On June 26, 2026, in connection with its entry into the Revolving Facility, the Company repaid all outstanding borrowings under the WTI Loan Facility using proceeds from borrowings under the Revolving Facility, and terminated both the WTI Loan Facility and ABL Line of Credit, resulting in extinguishment of the associated debt and other debt-related balance sheet amounts. As of September 30, 2026, the Company has borrowings of $11,010 under the Revolving Facility.

•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.

The Company believes its existing cash and cash equivalent balances, cash flows from operations, and borrowing capacity under the Revolving Facility 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 September 30, 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 September 30, 2026, substantially all of the Company’s cash was held with Silicon Valley Bank, Wells Fargo, 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 September 30, 2026, there was one customer who individually represented 10% or more of total net revenue, accounting for 38% of total net revenue, with no other customers exceeding 10% of total net revenue during that period. This same customer accounted for 48% of the accounts receivable, net balance, respectively, as of September 30, 2026. During the nine months ended September 30, 2026, the same customer individually exceeded 10% of total net revenue during the period at 40% of total net revenue. During the three months ended September 30, 2025, there were three customers who individually represented 10% or more of total net revenues, accounting for 37%, 10% and 10% of total net revenues. During the nine months ended September 30, 2025, one customer accounted for 46% of total net revenues, with no other customers exceeding 10% of total net revenues during that period.

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


	September 30, 2026		December 31, 2025
Three largest customers by total net accounts receivable	65	%	67	%

Revisions to Previously Issued Financial Statements and Financial Information

In connection with the preparation of the consolidated financial statements as of and for the three and six months ended June 30, 2026, management identified errors impacting historical interim and annual financial statements. These errors primarily relate to the overstatement of stock-based compensation expense due to valuation miscalculations underlying the Employee Stock Purchase Plan.

The Company assessed the materiality of the errors on prior period interim and annual consolidated financial statements in accordance with the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99, “Materiality,” and No. 108, codified in ASC 250, Accounting Changes and Error Corrections (“ASC 250”). Based on this assessment, in consideration of both quantitative and qualitative factors, the Company determined that the related impacts were not material, individually or in the aggregate, to any previously issued interim or annual financial statements. However, if the corrections were recorded in the three months ended June 30,

2026, they would be material to that period. As such, the Company revised the previously issued consolidated financial statements for the three-month period ended March 31, 2026, for the quarterly and year-to-date periods for 2025, and for the years ended December 31, 2025 and 2024. In conjunction with the revision, the Company also corrected certain other errors that were previously identified and disclosed and concluded to be immaterial, individually and in the aggregate, to the Company’s consolidated financial statements as of and for the relevant periods. The applicable notes to the accompanying financial statements have also been corrected to reflect the impact of the revisions of the previously filed consolidated interim financial statements and consolidated annual financial statements.

A detailed summary of the revisions to the previously issued financial information is included in Note 11, Revision of Previously Issued Financial Statements and Financial Information below.

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 and nine months ended September 30, 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 consists of cash collateral that is held by the Company’s financial institutions to secure its financing arrangements. Specifically, restricted cash that is classified within current assets in the unaudited condensed consolidated balance sheets consists of 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:


	September 30,
	2026		2025
Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets:
Cash and cash equivalents	$	31,629	$	23,760
Restricted cash:

Cash collateral - credit card facility	300		300

Total cash, cash equivalents, and restricted cash	$	31,929	$	24,060

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 September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Beginning balance	$	878	$	953	$	723	$	653
Changes in current-period provision	(120)		(174)		74		135
Write-offs	(151)		(88)		(185)		(97)
Recoveries	—		—		(5)		—
Ending balance	$	607	$	691	$	607	$	691

Inventory

Details of inventory were as follows:


	September 30, 2026		December 31, 2025
Raw materials	$	604	$	330
Finished goods	15,669		14,961
Total inventory	$	16,273	$	15,291

Prepaid expenses and other current assets

For the nine months ended September 30, 2025, a write-off of $347 related to a prepaid deposit for materials determined to have no alternative future use in our research and development efforts was recorded within research and development expenses.

Property and Equipment, net

Property and equipment consisted of the following:


	September 30, 2026		December 31, 2025
Tooling and manufacturing equipment	$	3,202	$	2,249
Computer equipment	523		455
Furniture and fixtures	194		194
Software	47		46
Leasehold improvements	3		3
Total property and equipment	3,969		2,947
Less: accumulated depreciation and amortization	(2,799)		(2,652)
Property and equipment, net	$	1,170	$	295

Depreciation and amortization expense on property and equipment was $85 and $32 for the three months ended September 30, 2026 and 2025, respectively. For the three months ended September 30, 2026 and 2025, the Company allocated $51 and $14, 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.

Depreciation and amortization expense on property and equipment was $174 and $86 for the nine months ended September 30, 2026 and 2025, respectively. For the nine months ended September 30, 2026 and 2025, the Company allocated $79 and $58, 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:


	September 30, 2026
	Gross carrying amount		Accumulated amortization		Net carrying amount
Trademarks and patents	$	944	$	(504)	$	440
Internally developed software	2,468		(845)		1,623
Total intangible assets	$	3,412	$	(1,349)	$	2,063


	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 $209 and $109 for the three months ended September 30, 2026 and 2025, respectively. For the three months ended September 30, 2026 and 2025, the Company recorded $184 and $85, 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.

Amortization expense of intangible assets was $516 and $283 for the nine months ended September 30, 2026 and 2025, respectively. For the nine months ended September 30, 2026 and 2025, the Company recorded $446 and $221, 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 September 30, 2026, the estimated future amortization expenses and reconciliation to total intangible assets consisted of the following:


Year	Amount
Remaining three months of 2026	$	214
2027	761
2028	513
2029	178
2030	32
Thereafter	78
Total future amortization expenses	1,776
Intangible assets not yet subject to amortization	287
Total intangible assets	$	2,063

Accrued and Other Expenses

Accrued and other expenses consisted of the following:


	September 30, 2026		December 31, 2025
Accrued payroll	$	2,594	$	4,206
Accrued sales discounts	5,957		3,881
Accrued sales returns	1,135		1,415
Accrued legal settlements	5		5,998
Other	5,587		3,927
Total accrued and other expenses	$	15,278	$	19,427

Changes in accrued warranty were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Accrued warranty, beginning of period	$	371	$	352	$	357	$	291
Settlements of warranty claims during the period	(116)		(310)		(407)		(687)
Provision for warranties issued during the period	147		187		416		494
Changes in provision for pre-existing warranties	(24)		161		12		292
Accrued warranty, end of period	$	378	$	390	$	378	$	390

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 $1,302 and $783 of revenue during the three months ended September 30, 2026 and 2025, respectively, that was included in the deferred revenue balance at the beginning of the respective period.

The Company recognized $2,014 and $1,274 of revenue during the nine months ended September 30, 2026 and 2025, respectively, that was included in the deferred revenue balance at the beginning of the respective period.

Note 4. Debt and Other Financing Arrangements

The Company’s indebtedness consisted of the following:


	September 30, 2026		December 31, 2025
Term loan facility payable to WTI, net	$	—	$	5,609
ABL Line of Credit	—		6,932
Wells Fargo Line of Credit	11,010		—
Financed insurance premium	—		489
Total debt	11,010		13,030
Less: current portion	(11,010)		(10,567)
Total long-term debt, net	$	—	$	2,463

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

Wells Fargo Line of Credit

On June 26, 2026, Owlet, Inc., a Delaware corporation (the “Company”), and its wholly-owned subsidiary Owlet Baby Care, Inc., a Delaware corporation (“OBCI”), entered into a new debt financing arrangement and refinanced (i) OBCI’s existing line of credit with ABL OPCO LLC, a Delaware limited liability company, in its capacity as administrative agent for certain lenders (the “ABL Lenders”), and (ii) OBCI’s term loan agreement with WTI Fund X, Inc., a Maryland corporation, WTI Fund XI, Inc., a Maryland corporation (the “WTI Lenders”). On June 26, 2026, OBCI drew down under the Revolving Facility in the principal amount of $17,063, the proceeds of which were used in part to repay all outstanding borrowings under the term loan agreement with the WTI Lenders and terminated both the WTI Loan Facility and ABL Line of Credit, resulting in extinguishment of the associated debt and other debt-related balance sheet amounts.

On June 26, 2026 (the “Effective Date”), the Company, as a guarantor (in such capacity, “Guarantor”), and OBCI, as borrower (in such capacity, the “Borrower”), entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”).

The Credit Agreement provides for an asset-based revolving credit facility (the “Revolving Facility”) in a maximum principal amount of up to $25,000 (the “Revolving Commitment”). The Revolving Commitment may be expanded by agreement of the parties from up to $25,000 to up to $35,000 (in minimum increments of at least $5,000). Loans and other obligations of the Borrower bear interest at a rate per annum equal to the daily Secured Overnight Financing Rate plus a margin of 2.00% or 2.25% depending on the Borrower’s monthly average excess availability under the Revolving Facility. The weighted average interest rate on the outstanding borrowings under the Revolving Facility was 5.90% for the three months ended September 30, 2026. The Revolving Facility matures in June 2029.

On September 30, 2026, there were $11,010 of outstanding borrowings under the Revolving Facility, 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 outstanding borrowings as of September 30, 2026 were repaid to Wells Fargo in October 2026. The remaining borrowing base availability under the Revolving Facility was $7,897 as of September 30, 2026.

The Credit Agreement requires the Borrower to observe certain financial covenants, including (i) a covenant to maintain at least $7,500 of liquidity at all times, and (ii) a covenant to achieve certain minimum EBITDA thresholds specified in the Credit Agreement. As of September 30, 2026, the Company was in compliance with all covenants under the Credit Agreement.

The Borrower’s obligations under the Credit Agreement are: (i) fully and unconditionally guaranteed by the Company; and (ii) secured by a security interest in substantially all personal property assets of the Company and the Borrower, including a pledge of the outstanding capital stock of the Borrower given by the Company.

Debt issuance costs related to the Credit Agreement of $280 were recorded as a loan commitment asset within other assets on the condensed consolidated balance sheet. Issuance costs are amortized straight-line over the term of the Revolving Facility and recorded within interest income (expense), net on the unaudited condensed consolidated statement of operations and comprehensive income (loss).

The Company recognized $23 of interest expense related to the amortization of the loan commitment assets during both the three and nine months ended September 30, 2026.

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 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.

On June 26, 2026, in connection with its entry into the Revolving Facility, the Company repaid all outstanding borrowings under the WTI Loan Facility using proceeds from borrowings under the Revolving Facility, and terminated the WTI Loan Facility. The Company recognized a loss on extinguishment of $1,605 in connection with the extinguishment on the unaudited condensed consolidated statement of operations and comprehensive income (loss), of which $1,098 was due to the write-off of non-cash unamortized debt financing costs previously capitalized on the unaudited condensed consolidated balance sheets.

Interest on the outstanding principal amounts under the WTI Loan Facility accrued at a rate per annum equal to the sum of the prime rate plus 3.5%, with a floor of 12%. The interest rate on the outstanding principal amounts under the WTI Loan Facility was 12% through the June 26, 2026 extinguishment. Loans under the WTI Loan Facility also accrued 2.5% in payment-in-kind interest ("PIK interest") compounded monthly. All outstanding principal, accrued coupon interest, and accrued PIK interest were repaid in full upon extinguishment on June 26, 2026.

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 and 310,000 shares of redeemable common stock were sold by WTI to an unrelated third-party. 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 during the three months ended March 31, 2026. There were 252,500 redeemable common shares remaining pursuant to the Redemption Option at September 30, 2026.

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. 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.

Notwithstanding the extinguishment of the WTI Loan Facility on June 26, 2026, the Company's obligation with respect to the Redemption Option under the WTI Stock Issuance Agreement remains outstanding as a separate, unsecured obligation of the Company.

The Company recognized $0 and $293 of interest expense related to the amortization of debt financing costs of the WTI Loan Facility and $0 and $95 of interest expense related to the amortization of the loan commitment assets during the three months ended September 30, 2026 and 2025, respectively.

The Company recognized $555 and $773 of interest expense related to the amortization of debt financing costs of the WTI Loan Facility and $0 and $762 of interest expense related to the amortization of the loan commitment assets during the nine months ended September 30, 2026 and 2025, respectively.

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 "ABL 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 ABL Credit Agreement provided for an asset-based revolving credit line (the "ABL Line of Credit") with a maximum principal amount of up to $20,000. The ABL Line of Credit was collateralized by substantially all of the Company's assets. Loans and other obligations under the ABL Credit Agreement bore 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 varied 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 June 26, 2026, in connection with its entry into the Revolving Facility, the Company terminated the ABL Line of Credit. The Company recognized a loss on extinguishment of $604 in connection with the extinguishment on the unaudited condensed consolidated statement of operations and comprehensive income (loss), of which $374 was due to the write-off of unamortized loan commitment assets previously capitalized on the unaudited condensed consolidated balance sheets.

The Company recognized $0 and $70 of interest expense related to the amortization of the loan commitment assets during the three months ended September 30, 2026 and 2025, respectively.

The Company recognized $151 and $181 of interest expense related to the amortization of the loan commitment assets during the nine months ended September 30, 2026 and 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 to be paid within one year. As of September 30, 2026, there was no remaining balance outstanding related to these agreements.

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 $314 remains to be paid at September 30, 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 was eligible for a refund of tariffs previously paid on imported goods. During the three months ended June 30, 2026, the Company received $3,960 in IEEPA tariff refunds. Of this amount, $3,526 was recorded as a reduction to cost of goods sold for inventory sold, $205 was recorded as a reduction in the carrying value of inventory, and $229 was recorded as a component of other income (expense), net on the unaudited condensed consolidated statement of operations and comprehensive income (loss). Of the $205 recorded as a reduction in the carrying value of inventory, $65 was recognized as a reduction to cost of goods sold during the three months ended September 30, 2026 as the related inventory was sold, and the remaining $140 will be recognized in cost of goods sold as the related inventory is sold. During the three months ended September 30, 2026, the Company did not receive any additional IEEPA tariff refunds. The Company will continue to monitor developments in this area 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, captioned Butala v. Owlet, Inc., Case No. 2:21-cv-09016-FLA-SSC, and 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”).

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. Following motions to dismiss and reconsiderations rulings, the parties reached agreements in principle to settle both the Section 10(b) Claims and the Section 14(a) Claims. The Section 10(b) Claims were resolved for $3,500 and the Section 14(a) Claims were resolved for $1,750. In accordance with ASC 450, 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. In October 2025, the Company caused $3,500 to be paid into escrow for the settlement of the Section 10(b) Claims and, with the directors' and officers' insurance provider, caused $1,750 to be paid into escrow for the settlement of the Section 14(a) Claims, both amounts of which were classified as restricted cash in the unaudited condensed consolidated balance sheets. On August 3, 2026, the Court entered final orders

approving the settlement amounts and the plan of allocation for the settlements of the Section 10(b) Claims and the Section 14(a) Claims as well as final orders of dismissal for each, fully resolving both actions. On September 2, 2026, the applicable appeal period expired with no notice of appeal filed by any party, and the Company was legally released as the primary obligor under the settlements. Accordingly, in accordance with ASC 405-20, during the three months ended September 30, 2026, the Company derecognized the $5,250 accrued litigation settlement liability and the corresponding $5,250 of restricted cash held in escrow. The derecognition had no impact on the Company’s consolidated statement of operations and comprehensive income (loss) or consolidated statement of cash flows.

Further, on August 26, 2024 and October 3, 2024, derivative complaints were filed in the U.S. District Court for the Central District of California, (Janet Vargas, Derivatively on Behalf of Nominal Defendant Owlet, Inc., Case No. 2:24-cv-07258-FLA-PVC), and Nathan Capleton, Derivatively on Behalf of Nominal Defendant Owlet, Inc., Case No. 2:24-cv-08536-JAK-MAA) asserting claims for violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste of corporate assets against certain current or former directors and officers. On December 13, 2024, the derivative actions were consolidated into a single action captioned Vargas v. Workman, et al., Case No. 2:24-cv-07258-FLA-PVC.

The parties reached a settlement in the derivative action under which the Company agreed to adopt, implement, and maintain certain corporate governance, oversight, and internal controls reforms, and agreed not to oppose an application for $675 in attorneys’ fees and expenses. In accordance with ASC 450, 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. On August 3, 2026, the Court entered an order granting final approval of the settlement, approving the $675 fee and expense amount, entering final judgment, and dismissing the action with prejudice. On August 31, 2026, the Company’s directors’ and officers’ insurance carrier paid the $675 fee and expense award on the Company’s behalf, relieving the Company of its obligation. Because the carrier had not acknowledged coverage or committed to pay prior to payment, recovery was not probable in prior periods and was realized upon payment. Accordingly, in accordance with ASC 405-20, the Company derecognized the $675 accrued liability and recognized a corresponding $675 insurance recovery as a reduction of general and administrative expense on the consolidated statement of operations and comprehensive income (loss) for the three and nine months ended September 30, 2026. No company cash was used to fund the payment of such fees and expenses.

Camera Cable Guard Safety Update

See Note 12 regarding the Company’s camera cable guard safety update.

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 for the fiscal year ended December 31, 2025.

Stock-based Compensation Expense

Total stock-based compensation was recognized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
General and administrative	$	1,477	$	583	$	5,816	$	2,188
Sales and marketing	412		258		1,349		983
Research and development	739		377		2,186		1,180
Total stock-based compensation	$	2,628	$	1,218	$	9,351	$	4,351

The Company capitalized stock-based compensation attributable to internally developed software of $23 and $35 for the three months ended September 30, 2026, and 2025.

The Company capitalized stock-based compensation attributable to internally developed software of $137 and $62 for the nine months ended September 30, 2026, and 2025.

As of September 30, 2026, the Company had $10,597 of unrecognized stock-based compensation costs related to unvested RSUs that will be recognized over a weighted-average period of 1.4 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. In August 2026, stockholders approved an amendment to the 2021 Incentive Award Plan increasing the number of shares reserved for issuance by 600,000 shares.

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
Granted	1,009,295	5.14
Vested	(381,949)	5.57
Forfeited	(68,406)	7.73
Outstanding as of June 30, 2026	2,000,155	$	6.82
Granted	1,035,802	5.35
Vested	(414,394)	7.81
Forfeited	(15,310)	7.54
Outstanding as of September 30, 2026	2,606,253	$	6.07

As of September 30, 2026, the Company had $746 of unrecognized stock-based compensation costs related to unvested PSUs that will be recognized over a weighted-average period of 1.55 years.

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 September 30, 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 September 30, 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. 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 September 30, 2026.

As discussed in Note 4, notwithstanding the extinguishment of the WTI Loan Facility on June 26, 2026, the Company's obligation with respect to the Redemption Option under the WTI Stock Issuance Agreement remains outstanding as a separate, unsecured obligation of the Company.

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 September 30, 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 September 30, 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 September 30, 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 September 30, 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 September 30, 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 recorded liabilities for warrants issued by SBG prior to the Merger until their expiration at July 15, 2026.

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 and had a term of five years from the completion of the Merger, or earlier upon redemption or liquidation. The SBG Common Stock Warrants, which had a fair value of $0 as of June 30, 2026, expired on July 15, 2026. None of the SBG Common Stock Warrants were exercised prior to their expiration. The expiration of these warrants did not have a material impact on the Company's consolidated financial statements.

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 September 30, 2026.

Common Stock Warrants

The following table summarizes issuable shares of the Company’s common stock based on warrant activity for the nine months ended September 30, 2026:


	December 31, 2025	Shares Purchased by Exercise	Shares Expired	September 30, 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	—	(1,292,856)	371,619

Exchange Agreement - Series A and Series B Warrants

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 September 30, 2026 there were 265,597 Series A Warrants that were not subject to the terms of the Exchange Agreement and, as of September 30, 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.

Earnout Shares

Following the Merger, 200,536, shares of common stock held by certain former equity holders of SBG were subject to vesting and forfeiture conditions (the "Earnout Shares"). Of the 200,536 earnout shares, 100,268 shares would vest if a $175.00 stock price level was achieved and 100,268 would vest if a $210.00 stock price level was achieved, in each case, on or before the fifth anniversary of the Closing of the Merger. The earnout shares were classified as equity. Until forfeiture, these shares of Owlet common stock, which were issued and outstanding, were treated as contingently recallable and were excluded from the denominator for the purposes of calculating basic and diluted net loss per share. See Note 9 for further discussion on the calculation of basic and diluted net loss per share.

As neither the $175.00 nor the $210.00 stock price level was achieved on or before July 15, 2026, the fifth anniversary of the Closing of the Merger, all 200,536 Earnout Shares were forfeited and canceled for no consideration, resulting in a reduction in shares outstanding with no impact to the consolidated statements of operations and comprehensive income (loss).

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:


	September 30, 2026
	Level 1		Level 2		Level 3		Balance
Assets:
Money market funds	$	17,794	$	—	$	—	$	17,794
Total assets	$	17,794	$	—	$	—	$	17,794
Liabilities:
Series A Warrants	—		—		610		610
Total liabilities	$	—	$	—	$	610	$	610

	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 Common Stock Warrants expired unexercised on July 15, 2026.

The SBG Common Stock Warrants as of December 31, 2025 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 Common Stock Warrants as of December 31, 2025 using the Black-Scholes option pricing model with the following assumptions:


SBG Common Stock Warrants - Black-Scholes Inputs	December 31, 2025
OWLT stock price	$	16.19
Exercise price of warrants	$	161.00
Term in years	0.54
Risk-free interest rate	3.58		%
Volatility	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 September 30, 2026 and December 31, 2025, using the Black-Scholes option pricing model with the following assumptions:


Series A Warrants - Black-Scholes Inputs	September 30, 2026			December 31, 2025
OWLT stock price	$	5.26		$	16.19
Exercise price of warrants	$	4.66		$	4.66
Term in years	1.38			2.13
Risk-free interest rate	4.66		%	3.48		%
Volatility	84.00		%	75.00		%

The following table presents a reconciliation of the Company’s Series A Warrants measured at fair value on a recurring basis as of September 30, 2026:


	Level 3 Warrants
Balance as of December 31, 2025	$	3,273
Change in fair value included within common stock warrant liability adjustment	(2,663)
Balance as of September 30, 2026	$	610

There were no transfers between Level 1 and Level 2 in the periods reported. The SBG Common Stock Warrants were transferred into Level 3 in 2023 and are no longer outstanding.

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

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 net income 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. 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 loss per share (in thousands, except share and per share amounts):


	Three Months Ended September 30,
	2026		2026		2025		2025
	Redeemable Common Stock		Common Stock		Redeemable Common Stock		Common Stock
Numerator:
Allocation of net income attributable to common stockholders	$	12	$	1,412	$	141	$	4,046
Accretion on convertible preferred stock	(7)		(841)		(28)		(820)
Accretion on redeemable common stock	9		(9)		21		(21)
Allocation of net income to participating securities	—		(51)		(21)		(485)
Allocated net income attributable to common stockholders, basic	$	14	$	511	$	113	$	2,720
Denominator:
Weighted average common shares outstanding, basic	252,500		28,832,450		562,500		16,198,439
Net income per share attributable to common stockholders, basic	$	0.06	$	0.02	$	0.20	$	0.17


	Three Months Ended September 30,
	2026		2026		2025		2025
	Redeemable Common Stock		Common Stock		Redeemable Common Stock		Common Stock
Numerator:
Allocation of net income attributable to common stockholders	$	12	$	1,412	$	141	$	4,046
Accretion on convertible preferred stock	(7)		(841)		(28)		(820)
Accretion on redeemable common stock	9		(9)		21		(21)
Allocation of net income to participating securities	—		(38)		—		—
Effect of dilutive securities	(1)		(142)		—		(4,266)
Allocated net income (loss) attributable to common stockholders, diluted	$	13	$	382	$	134	$	(1,061)
Denominator:
Weighted average common shares outstanding, basic	252,500		28,832,450		562,500		16,198,439
Effect of dilutive securities	—		737,171		125,000		3,115,073
Weighted average common shares outstanding, diluted	252,500		29,569,621		687,500		19,313,512
Net income (loss) per share attributable to common stockholders, diluted	$	0.05	$	0.01	$	0.19	$	(0.05)


	Nine Months Ended September 30,
	2026		2026		2025		2025
	Redeemable Common Stock		Common Stock		Redeemable Common Stock		Common Stock
Numerator:
Allocation of net loss attributable to common stockholders	$	(25)	$	(2,417)	$	(1,023)	$	(28,674)
Accretion on convertible preferred stock	(26)		(2,518)		(88)		(2,456)
Accretion on redeemable common stock	31		(31)		63		(63)

Allocated net loss attributable to common stockholders, basic	$	(20)	$	(4,966)	$	(1,048)	$	(31,193)
Denominator:
Weighted average common shares outstanding, basic	289,038		28,259,449		562,500		15,769,020
Net loss per share attributable to common stockholders, basic	$	(0.07)	$	(0.18)	$	(1.86)	$	(1.98)


	Nine Months Ended September 30,
	2026		2026		2025		2025
	Redeemable Common Stock		Common Stock		Redeemable Common Stock		Common Stock
Numerator:
Allocation of net loss attributable to common stockholders	$	(25)	$	(2,417)	$	(1,023)	$	(28,674)
Accretion on convertible preferred stock	(26)		(2,518)		(88)		(2,456)
Accretion on redeemable common stock	31		(31)		63		(63)

Effect of dilutive securities	(27)		(2,635)		—		—
Allocated net loss attributable to common stockholders, diluted	$	(47)	$	(7,601)	$	(1,048)	$	(31,193)
Denominator:
Weighted average common shares outstanding, basic	289,038		28,259,449		562,500		15,769,020
Effect of dilutive securities	—		71,600		0		—
Weighted average common shares outstanding, diluted	289,038		28,331,049		562,500		15,769,020
Net loss per share attributable to common stockholders, diluted	$	(0.16)	$	(0.27)	$	(1.86)	$	(1.98)

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


	Three Months Ended September 30,
	2026	2025
Stock options	—	267,207
RSUs	108,336	2,226,265
PSUs	104,165	—
ESPP shares committed	28,984	39,451
Common stock warrants	—	1,403,894
Preferred stock	2,872,668	2,872,668
Total	3,114,153	6,809,485


	Nine Months Ended September 30,
	2026	2025
Stock options	92,156	267,207
RSUs	2,606,253	2,226,265
RSAs	—	—
PSUs	104,165	—
ESPP shares committed	28,984	39,451
Common stock warrants	106,022	1,403,894
Preferred stock	2,872,668	2,872,668
Total	5,810,248	6,809,485

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 (loss), 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 September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
United States	$	22,412	$	22,249	$	68,407	$	63,957
United Kingdom	3,030		3,357		6,562		5,478
Other	4,985		6,382		11,779		10,171
Total revenue	$	30,427	$	31,988	$	86,748	$	79,606

Other than the United States, and for the three months ended September 30, 2025, the United Kingdom, no individual country exceeded 10% of total revenue for the three or nine months ended September 30, 2026 and 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:


	September 30, 2026		December 31, 2025
United States	$	168	$	207
International	1,033		157
Total long-lived assets, net	$	1,201	$	364

Note 11. Revision of Previously Issued Financial Statements and Financial Information

The consolidated financial statements for the years ended December 31, 2024 and December 31, 2025 as well as the unaudited condensed consolidated financial statements for the interim periods ended March 31, 2025, June 30, 2025, September 30, 2025, and March 31, 2026 have been revised to correct for prior period errors as discussed in Note 1. Basis of Presentation. The following tables

reflect the impact of the revision to the specific line items presented in our previously reported financial information for the periods impacted by the revision. The Company intends to reflect the revisions to the interim and annual periods in its 2026 quarterly reports to be filed on Form 10-Q and annual report to be filed on Form 10-K, as applicable. There is no impact to net cash provided by/used in operating activities, investing activities, or financing activities in the consolidated statements of cash flows for the applicable periods.

Impacts to Consolidated Statements of Operations and Comprehensive Income (Loss)


	Year Ended December 31, 2025
	As Reported		Adjustments		As Revised
Revenue - hardware	$	100,838	$	451	$	101,289
Total revenue	105,708		451		106,159
Gross profit	53,533		451		53,984
General and administrative	29,245		(300)		28,945
Sales and marketing	18,473		(9)		18,464
Research and development	14,076		(85)		13,991
Total operating expenses	61,794		(394)		61,400
Operating loss	(8,261)		845		(7,416)
Loss before income tax provision	(39,650)		845		(38,805)
Net loss and comprehensive loss	(39,678)		845		(38,833)
Net (loss) per share attributable to redeemable common stockholders - basic and diluted	$	(2.16)	$	0.04	$	(2.12)
Net (loss) per share attributable to common stockholders - basic and diluted	$	(2.31)	$	0.04	$	(2.27)


	Year Ended December 31, 2024
	As Reported		Adjustments		As Revised
Revenue - hardware	$	78,056	$	(648)	$	77,408
Total revenue	78,056		(648)		77,408
Gross profit	39,308		(648)		38,660
General and administrative	33,967		(25)		33,942
Sales and marketing	15,760		(14)		15,746
Research and development	9,801		(116)		9,685
Total operating expenses	59,528		(155)		59,373
Operating loss	(20,220)		(493)		(20,713)
Interest expense, net	(1,630)		325		(1,305)
Total other income (expense), net	7,738		325		8,063
Loss before income tax provision	(12,482)		(168)		(12,650)
Net loss and comprehensive loss	(12,536)		(168)		(12,704)
Net (loss) per share attributable to redeemable common stockholders - basic and diluted	$	(1.42)	$	(0.02)	$	(1.44)
Net (loss) per share attributable to common stockholders - basic and diluted	$	(1.57)	$	(0.02)	$	(1.59)


	Three Months Ended March 31, 2026
	As Reported		Adjustments		As Revised
General and administrative	$	9,302	$	(54)	$	9,248
Sales and marketing	4,473		(1)		4,472
Research and development	3,956		(35)		3,921
Total operating expenses	17,731		(90)		17,641
Operating loss	(5,492)		90		(5,402)
Loss before income tax provision	(3,329)		90		(3,239)
Net loss and comprehensive loss	(3,336)		90		(3,246)
Net income (loss) per share attributable to redeemable common stockholders - basic	$	(0.12)	$	0.01	$	(0.11)
Net income (loss) per share attributable to redeemable common stockholders - diluted	$	(0.12)	$	0.01	$	(0.11)
Net income (loss) per share attributable to common stockholders - diluted	$	(0.25)	$	0.01	$	(0.24)


	Three Months Ended March 31, 2025
	As Reported		Adjustments		As Revised
Revenue - hardware	$	20,704	$	451	$	21,155
Total revenue	21,104		451		21,555
Gross profit	11,326		451		11,777
General and administrative	7,092		(25)		7,067
Sales and marketing	4,002		(2)		4,000
Research and development	2,903		(24)		2,879
Total operating expenses	13,997		(51)		13,946
Operating loss	(2,671)		502		(2,169)
Income before income tax provision	3,037		502		3,539
Net income and comprehensive income	3,025		502		3,527
Net income (loss) per share attributable to redeemable common stockholders - basic	$	0.15	$	0.02	$	0.17
Net income (loss) per share attributable to redeemable common stockholders - diluted	$	0.15	$	0.02	$	0.17
Net income (loss) per share attributable to common stockholders - basic	$	0.11	$	0.03	$	0.14
Net income (loss) per share attributable to common stockholders - diluted	$	0.11	$	0.03	$	0.14


	Three Months Ended June 30, 2025
	As Reported		Adjustments		As Revised
General and administrative	$	7,228	$	(209)	$	7,019
Sales and marketing	4,318		(3)		4,315
Research and development	3,753		(24)		3,729
Total operating expenses	15,299		(236)		15,063
Operating loss	(1,919)		236		(1,683)
Loss before income tax provision	(37,614)		236		(37,378)
Net loss and comprehensive loss	(37,647)		236		(37,411)
Net (loss) per share attributable to redeemable common stockholders - basic and diluted	$	(2.33)	$	0.02	$	(2.31)
Net (loss) per share attributable to common stockholders - basic and diluted	$	(2.37)	$	0.02	$	(2.35)


	Six Months Ended June 30, 2025
	As Reported		Adjustments		As Revised
Revenue - hardware	$	45,904	$	451	$	46,355
Total revenue	47,167		451		47,618
Gross profit	24,706		451		25,157
General and administrative	14,320		(234)		14,086
Sales and marketing	8,320		(5)		8,315
Research and development	6,656		(48)		6,608
Total operating expenses	29,296		(287)		29,009
Operating loss	(4,590)		738		(3,852)
Loss before income tax provision	(34,577)		738		(33,839)
Net loss and comprehensive loss	(34,622)		738		(33,884)
Net (loss) per share attributable to redeemable common stockholders - basic and diluted	$	(2.18)	$	0.05	$	(2.13)
Net (loss) per share attributable to common stockholders - basic and diluted	$	(2.26)	$	0.05	$	(2.21)


	Three Months Ended September 30, 2025
	As Reported		Adjustments		As Revised
General and administrative	$	6,273	$	(33)	$	6,240
Sales and marketing	4,926		(2)		4,924
Research and development	3,785		(18)		3,767
Total operating expenses	14,984		(53)		14,931
Operating income	1,216		53		1,269
Income before income tax provision	4,143		53		4,196
Net income and comprehensive income	4,134		53		4,187
Net (loss) per share attributable to common stockholders - diluted	$	(0.06)	$	0.01	$	(0.05)


	Nine Months Ended September 30, 2025
	As Reported		Adjustments		As Revised
Revenue - hardware	$	76,379	$	451	$	76,830
Total revenue	79,155		451		79,606
Gross profit	40,906		451		41,357
General and administrative	20,593		(268)		20,325
Sales and marketing	13,246		(7)		13,239
Research and development	10,441		(65)		10,376
Total operating expenses	44,280		(340)		43,940
Operating loss	(3,374)		791		(2,583)
Loss before income tax provision	(30,434)		791		(29,643)
Net loss and comprehensive loss	(30,488)		791		(29,697)
Net income (loss) per share attributable to redeemable common stockholders - basic	$	(1.91)	$	0.05	$	(1.86)
Net income (loss) per share attributable to redeemable common stockholders - diluted	$	(1.91)	$	0.05	$	(1.86)
Net income (loss) per share attributable to common stockholders - basic	$	(2.03)	$	0.05	$	(1.98)
Net (loss) per share attributable to common stockholders - diluted	$	(2.03)	$	0.05	$	(1.98)

Impacts to Consolidated Balance Sheets


	December 31, 2024
	As Reported		Adjustments		As Revised
Accounts receivable	$	12,136	$	(34)	$	12,102
Total current assets	46,113		(34)		46,079
Total assets	49,515		(34)		49,481
Accrued and other expenses	16,378		593		16,971
Total current liabilities	36,429		593		37,022
Total liabilities	66,329		593		66,922
Additional paid-in capital	238,442		(450)		237,992
Accumulated deficit	(268,195)		(177)		(268,372)
Total stockholders' equity (deficit)	(29,751)		(627)		(30,378)
Total liabilities, mezzanine equity, and stockholders' equity (deficit)	49,515		(34)		49,481


	March 31, 2025
	As Reported		Adjustments		As Revised
Accrued and other expenses	$	16,478	$	188	$	16,666
Total current liabilities	40,695		188		40,883
Total liabilities	63,397		188		63,585
Additional paid-in capital	239,362		(513)		238,849
Accumulated deficit	(265,170)		325		(264,845)
Total stockholders' equity (deficit)	(25,806)		(188)		(25,994)


	June 30, 2025
	As Reported		Adjustments		As Revised
Additional paid-in capital	$	243,659	$	(561)	$	243,098
Accumulated deficit	(302,817)		561		(302,256)


	September 30, 2025
	As Reported		Adjustments		As Revised
Additional paid-in capital	$	244,538	$	(614)	$	243,924
Accumulated deficit	(298,683)		614		(298,069)


	December 31, 2025
	As Reported		Adjustments		As Revised
Additional paid-in capital	$	326,912	$	(668)	$	326,244
Accumulated deficit	(307,873)		668		(307,205)


	March 31, 2026
	As Reported		Adjustments		As Revised
Additional paid-in capital	$	332,217	$	(758)	$	331,459
Accumulated deficit	(311,209)		758		(310,451)

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


	As reported						Adjustments						As Revised
	Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Equity (Deficit)		Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Equity (Deficit)		Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Equity (Deficit)
Balance as of December 31, 2023	$	218,127	$	(255,659)	$	(37,531)	$	(219)	$	(9)	$	(227)	$	217,908	$	(255,668)	$	(37,758)
Stock-based compensation	8,717		—		8,717		(232)		—		(232)		8,485		—		8,485
Net income (loss)	—		(12,536)		(12,536)		—		(168)		(168)		—		(12,704)		(12,704)
Balance as of December 31, 2024	238,442		(268,195)		(29,751)		(450)		(177)		(627)		237,992		(268,372)		(30,378)
Stock-based compensation	1,684		—		1,684		(63)		—		(63)		1,621		—		1,621
Net income (loss)	—		3,025		3,025		—		502		502		—		3,527		3,527
Balance as of March 31, 2025	239,362		(265,170)		(25,806)		(513)		325		(188)		238,849		(264,845)		(25,994)
Stock-based compensation	1,588		—		1,588		(49)		—		(49)		1,539		—		1,539
Net income (loss)	—		(37,647)		(37,647)		—		236		236		—		(37,411)		(37,411)
Balance as of June 30, 2025	243,659		(302,817)		(59,156)		(561)		561		—		243,098		(302,256)		(59,156)
Stock-based compensation	1,306		—		1,306		(53)		—		(53)		1,253		—		1,253
Net income (loss)	—		4,134		4,134		—		53		53		—		4,187		4,187
Balance as of September 30, 2025	244,538		(298,683)		(54,143)		(614)		614		—		243,924		(298,069)		(54,143)
Stock-based compensation	4,867		—		4,867		(55)		—		(55)		4,812		—		4,812
Net income (loss)	—		(9,190)		(9,190)		—		54		54		—		(9,136)		(9,136)
Balance as of December 31, 2025	326,912		(307,873)		19,042		(668)		668		—		326,244		(307,205)		19,042
Stock-based compensation	3,542		—		3,542		(90)		—		(90)		3,452		—		3,452
Net income (loss)	—		(3,336)		(3,336)		—		90		90		—		(3,246)		(3,246)
Balance as of March 31, 2026	$	332,217	$	(311,209)	$	21,011	$	(758)	$	758	$	—	$	331,459	$	(310,451)	$	21,011

Note 12. Subsequent Events

In November 2026, following a safety incident report earlier in 2026 involving a fatality from an exposed camera cable, the Company initiated a camera cable guard safety update and action request to Owlet camera owners, including a mandatory in-app safety check, safety recommendations, and a replacement enclosed cable guard system, which the Company will provide at no charge to all purchasers of Owlet cameras upon request. Effective November 13, 2026, the Company instituted a stop-sale on all camera products lacking the replacement cable guard. The Company will begin shipping new Dream Sight camera and Dream Duo units containing the replacement guard via Owletcare.com on November 13, 2026. Shipments through retail and third-party distribution channels will commence as soon as practicable; however, rollout timing depends on product availability, channel readiness, and the Company cannot currently predict when all channels will be fully supplied.

The Company evaluated these events and actions under ASC 450, Contingencies, and ASC 855, Subsequent Events. The voluntary decisions to issue the camera cable guard safety update and to instruct retailers to stop selling and return Dream Sight camera and Dream Duo products were made in November 2026, after the balance sheet date. The Company concluded that these decisions are nonrecognized subsequent events and, accordingly, has not recorded any related adjustments in the condensed consolidated financial statements as of and for the three and nine months ended September 30, 2026.

The Company estimates the net impact of this program at $13 million to $18 million, the majority of which is expected to be incurred in the fourth quarter of 2026. The estimated costs include the cost of replacement cable guards and depend significantly on the number of owners who ultimately request them. The estimate also comprises the expected return of Dream Sight and Dream Duo units currently held by retailers (net of the right-of-return value of units expected to be reworked and resold) as well as the related shipping, handling and rework costs. Retailer returns will be recorded as a reduction of revenue in the period the return obligation arises, which the Company expects to be the fourth quarter of 2026, and will reduce cash collections. Retailers may replenish their inventory with products that include the replacement cable guard, which would partially offset the effect of retailer returns on revenue and cash collections. The estimate also includes legal and consulting fees, and customer support costs associated with the camera cable guard safety update, some of which the Company incurred in the third quarter of 2026 and expects to continue to incur in the fourth quarter of 2026 and thereafter.

The safety update, the stop sale, and related publicity could adversely affect demand for its Dream Sight and Dream Duo products, and potentially other Owlet products, including during the 2026 holiday season. The Company is unable to predict the extent of any impact on demand.

In response to the safety incident report, the Company reported to the appropriate regulatory agencies. As of the date of this filing, the Company has not been required to take action by regulatory authorities. Should any regulatory authority require remedial actions or take enforcement measures, such actions may result in a material adverse impact on the Company's business, brand, results of operations, cash flows, and financial position.

The Company maintains insurance policies that may cover up to $10 million of certain costs related to this matter. Coverage is not guaranteed and no related insurance recovery has been recognized to date.

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. 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 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. Also note that reported amounts reflect the revisions discussed in Note 11 to the consolidated financial statements as applicable.

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.

Recent Developments

Camera Cable Guard Safety Update

In November 2026, following an incident reported earlier in 2026 that resulted in a fatality involving an exposed camera cable, we initiated a camera cable guard safety update to Owlet Dream Sight camera and Dream Duo owners and instituted a stop-sale on camera products lacking the replacement cable guard. We estimate the total cost of the program at $13 million to $18 million, the majority of which we expect to incur in the fourth quarter of 2026. As these decisions were made after September 30, 2026, our results for the three and nine months ended September 30, 2026 do not reflect any related adjustments. We expect the program, including the return of units held by retailers, to materially reduce our fourth quarter 2026 net revenue, gross margin and cash flows, and we expect the camera cable guard safety update of stop-sale to adversely affect demand for our products, including during the 2026 holiday season. The extent of the effect on demand is uncertain. For additional information, including the estimate, regulatory matters and insurance considerations, see Note 12, Subsequent Events within our condensed consolidated financial statements.

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 capitalized internally developed 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 and amortization relating to capitalized internally developed software.

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, 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. In addition, research and development expenses that qualify as internal-use software development costs are capitalized, reducing the expenses software development costs incurred in the period, and the amount capitalized may fluctuate significantly from period to period.

In addition, from time to time, our operating expenses include restructuring costs. Restructuring costs in the periods presented primarily related to employee severance in connection with our CEO transition in April 2026 and, to a lesser extent, management-approved plans designed to improve our cost structure and/or operations, such as our previously-announced decision to exit lower-margin, high-burden revenue streams in non-core geographies and new channels. Restructuring expenses consist of employee severance costs, contract termination costs and certain other exit costs to improve our cost structure in the future.

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, net gain (loss) on insurance claim proceeds, and interest income on tariff refunds.

Loss on debt extinguishment. Excess of the reacquisition price paid to settle debt over its net carrying value.

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 September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Revenue:
Hardware	$	26,840	$	30,475	$	77,264	$	76,830
Subscription	3,587		1,513		9,484		2,776
Total revenue	30,427		31,988		86,748		79,606
Cost of revenue:
Hardware	12,922		15,324		33,289		37,403
Subscription	1,132		464		3,024		846
Total cost of revenue	14,054		15,788		36,313		38,249
Gross profit	16,373		16,200		50,435		41,357
Operating expenses:
General and administrative	7,005		6,240		25,823		20,325
Sales and marketing	4,580		4,924		15,002		13,239
Research and development	3,586		3,767		12,070		10,376
Total operating expenses	15,171		14,931		52,895		43,940
Operating income (loss)	1,202		1,269		(2,460)		(2,583)
Other income (expense):
Interest income (expense), net	75		(860)		(1,315)		(2,830)
Common stock warrant liability adjustment	143		4,266		2,663		(23,800)
Other income (expense), net	32		(479)		924		(430)
Loss on debt extinguishment	—		—		(2,209)		—
Total other income (expense), net	250		2,927		63		(27,060)
Income (loss) before income tax provision	1,452		4,196		(2,397)		(29,643)
Income tax provision	(28)		(9)		(45)		(54)
Net income (loss) and comprehensive income (loss)	$	1,424	$	4,187	$	(2,442)	$	(29,697)
Accretion on convertible preferred stock	(848)		(848)		(2,544)		(2,544)
Allocation of net income to participating securities	(51)		(506)		—		—
Allocation of accretion on convertible preferred stock to redeemable common stock	7		28		26		88
Accretion on redeemable common stock	(9)		(21)		(31)		(63)
Allocation of net income to participating securities to redeemable common stockholders	—		21		—		—
Allocation of net (income) loss attributable to redeemable common stockholders	(12)		(141)		25		1,023
Net income (loss) attributable to redeemable common stockholders	$	14	$	113	$	(20)	$	(1,048)
Net income (loss) attributable to common stockholders	$	511	$	2,720	$	(4,966)	$	(31,193)

Net income (loss) per share attributable to redeemable common stockholders
Basic	$	0.06	$	0.20	$	(0.07)	$	(1.86)
Diluted	$	0.05	$	0.19	$	(0.16)	$	(1.86)
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to redeemable common stockholders
Basic	252,500		562,500		289,038		562,500
Diluted	252,500		687,500		289,038		562,500

Net income (loss) per share attributable to common stockholders
Basic	$	0.02	$	0.17	$	(0.18)	$	(1.98)
Diluted	$	0.01	$	(0.05)	$	(0.27)	$	(1.98)
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to common stockholders
Basic	28,832,450		16,198,439		28,259,449		15,769,020
Diluted	29,569,621		19,313,512		28,331,049		15,769,020

Revenue


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(dollars in thousands)	2026		2025		$		%		2026		2025		$		%
Hardware	$	26,840	$	30,475	$	(3,635)	(11.9	%)	$	77,264	$	76,830	$	434	0.6	%
Subscription	3,587		1,513		2,074		137.1	%	9,484		2,776		6,708		241.6	%
Total revenue	30,427		31,988		(1,561)		(4.9	%)	86,748		79,606		7,142		9.0	%

The decrease in hardware revenue for the three months ended September 30, 2026 was primarily due to approximately $3,000 decrease due to the Dream Sight launch in the prior year, a $2,600 increase in discounts and allowances largely related to estimated promotions on product sold to retailers, partially offset by approximately $2,000 increase in retail gross sales impact reflecting an increase in consumer demand as compared to the prior year.

The increase in hardware revenue for the nine months ended September 30, 2026 was driven by an approximately $3,300 increase attributable to higher consumer demand compared to the prior year period, partially offset by an approximately $2,900 increase in discounts and returns resulting from the timing of promotional load-in dates and higher sales volume.

The increase in subscription revenue for both the three and nine months ended September 30, 2026 was primarily 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 September 30,						Change				Nine Months Ended September 30,						Change
(dollars in thousands)	2026			2025			$		%		2026			2025			$		%
Cost of revenue:
Hardware	$	12,922		$	15,324		$	(2,402)	(15.7	%)	$	33,289		$	37,403		$	(4,114)	(11.0	%)
Subscription	1,132			464			668		144.0	%	3,024			846			2,178		257.4	%
Total cost of revenue	14,054			15,788			(1,734)		(11.0	%)	36,313			38,249			(1,936)		(5.1	%)
Gross profit:
Hardware	13,918			15,151			(1,233)		(8.1	%)	43,975			39,427			4,548		11.5	%
Subscription	2,455			1,049			1,406		134.0	%	6,460			1,930			4,530		234.7	%
Total gross profit	16,373			16,200			173		1.1	%	50,435			41,357			9,078		22.0	%
Gross margin:
Hardware	51.9		%	49.7		%					56.9		%	51.3		%
Subscription	68.4		%	69.3		%					68.1		%	69.5		%
Total gross margin	53.8		%	50.6		%					58.1		%	52.0		%

The decrease in hardware cost of revenue for the three months ended September 30, 2026 was primarily due to lower product sales volume and lower direct product and fulfillment costs. The increase in hardware gross margin was due to favorable product mix and lower direct product and fulfillment costs.

The decrease in hardware cost of revenue for the nine months ended September 30, 2026 was primarily due to the impact of tariff refunds and lower direct product costs, partially offset by an increase in product sales. The increase in hardware gross margin was primarily due to the impact of tariff refunds, favorable product mix, and favorable fixed cost absorption.

The increase in subscription cost of revenue for both the three and the nine months ended September 30, 2026 was primarily due to increased subscriptions to our Owlet360 service. The decrease in subscription gross margin is attributable to higher app store distribution fees.

General and Administrative


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(dollars in thousands)	2026		2025		$		%		2026		2025		$		%
General and administrative	$	7,005	$	6,240	$	765	12.3	%	$	25,823	$	20,325	$	5,498	27.1	%

The increase for the three months ended September 30, 2026 was driven primarily by an approximate $900 increase in stock-based compensation, and an approximately $400 net unfavorable change in insurance recoveries related to the class action and derivative lawsuits. These increases were partially offset by an approximate $800 decrease in compensation expense, largely due to lower estimated annual bonus expense.

The increase for the nine months ended September 30, 2026 was driven primarily by approximately $3,500 of additional stock-based compensation expense, a substantial portion of which was associated with the CEO transition in April 2026, approximately $3,000 in increases to headcount related expenses, including salaries and benefits. The overall increase in expenses was also due to approximately $600 in restructuring costs related to our CEO transition in April 2026, and a $300 increase in cloud software subscription spend. These increases were partially offset by a $2,300 decrease in estimated annual bonus expense.

Sales and Marketing


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(dollars in thousands)	2026		2025		$		%		2026		2025		$		%
Sales and marketing	$	4,580	$	4,924	$	(344)	(7.0	%)	$	15,002	$	13,239	$	1,763	13.3	%

The decrease for the three months ended September 30, 2026 was primarily due to the timing of a major promotional event, which occurred in the second quarter of 2026 versus the third quarter of 2025, resulting in approximately $400 lower retail marketing spend in the current quarter.

The increase for the nine months ended September 30, 2026 was driven primarily by an increase of approximately $1,000in retail marketing and promotional spend, $600 in additional contractor and consulting expenses, and approximately $400 in increased stock-based compensation expense. These increases were partially offset by lower estimated annual bonus expenses.

Research and Development


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(dollars in thousands)	2026		2025		$		%		2026		2025		$		%
Research and development	$	3,586	$	3,767	$	(181)	(4.8	%)	$	12,070	$	10,376	$	1,694	16.3	%

The decrease for the three months ended September 30, 2026 was driven primarily by approximately $500 decrease due to decreased regulatory testing and geographic expansion costs, partially offset by an increase of approximately $300 in stock-based compensation expense.

The increase for the nine months ended September 30, 2026 was driven primarily by approximately $1,600 of net higher personnel costs, approximately $1,100 in stock-based compensation, and approximately $100 in restructuring costs related to the previously-announced reprioritization of core geographies. These increases were partially offset primarily by approximately $1,100 decrease due to decreased regulatory testing and geographic expansion costs and an increase in capitalized internally developed software costs.

Other Income (Expense), Net


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(dollars in thousands)	2026		2025		$		%		2026		2025		$		%
Interest income (expense), net	$	75	$	(860)	$	935	(108.7	%)	$	(1,315)	$	(2,830)	$	1,515	(53.5	%)
Common stock warrant liability adjustment	143		4,266		(4,123)		(96.6	%)	2,663		(23,800)		26,463		(111.2	%)
Other income (expense), net	32		(479)		511		(106.7	%)	924		(430)		1,354		(314.9	%)
Loss on debt extinguishment	—		—		—		NM*		(2,209)		—		(2,209)		NM*

*Not meaningful ("NM").

The change from net interest expense to net interest income for the three months ended September 30, 2026, and the decrease in net interest expense for the nine months ended September 30, 2026 was driven primarily by the June 2026 extinguishment of the WTI term loan facility and ABL line of credit, which eliminated related interest expense and debt issuance cost and loan commitment amortization, partially offset by Wells Fargo revolver interest and issuance cost amortization.

Fluctuations in our common stock warrant liability adjustment for the three and nine months ended September 30, 2026 represents a significantly reduced magnitude of period-over-period fair value remeasurement of liability-classified common stock warrants as a result of the October 2025 warrant exchange.

Changes in other income (expense), net were driven primarily by financing transaction fees incurred in the three and nine months ended September 30, 2025 that did not reoccur in 2026, and, for the nine months ended September 30, 2026 by gains from insurance proceeds and interest income related to tariff refunds.

Loss on debt extinguishment for the nine months ended September 30, 2026 was due to the extinguishment of the WTI term loan facility and ABL Line of Credit, of which $1,472 was due to the write-off of unamortized debt financing costs and unamortized loan commitment assets previously capitalized on the unaudited condensed consolidated balance sheets.

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 income (expense), net, depreciation and amortization, impairment of intangible assets, common stock warrant liability adjustment, stock-based compensation, transaction costs, insurance loss recovery related to certain legal matters, net of charges related to certain legal matters, restructuring costs, and loss on debt extinguishment.

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 September 30,				Nine Months Ended September 30,
(dollars in thousands)	2026		2025		2026		2025
GAAP net income (loss)	$	1,424	$	4,187	$	(2,442)	$	(29,697)
Income tax provision	28		9		45		54
Interest (income) expense, net	(75)		860		1,315		2,830
Depreciation and amortization	294		141		690		369
Impairment of intangible assets	40		16		57		36

Common stock warrant liability adjustment	(143)		(4,266)		(2,663)		23,800
Stock-based compensation	2,628		1,218		9,351		4,351
Transaction costs	—		472		—		472
Insurance loss recovery related to certain legal matters, net of charges related to certain legal matters	(662)		(1,078)		(613)		290
Restructuring costs	(37)		—		679		—
Loss on debt extinguishment	—		—		2,209		—
Non-GAAP Adjusted EBITDA	$	3,497	$	1,559	$	8,628	$	2,505

Liquidity and Capital Resources

We fund our operations primarily with proceeds from issuances of our equity securities, borrowings under our loan facility, and sales of our products and services. As of September 30, 2026, we had cash and cash equivalents of $31,629, and additional availability of $7,897 on our line of credit. We believe our existing cash and cash equivalent balances, cash flows from operations, and borrowing capacity under our asset-based revolving credit agreement will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. 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 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. 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, we were eligible for a refund of tariffs previously paid on imported goods. During the three months ended June 30, 2026, we received $3,960 in IEEPA tariff refunds. Of this amount, $3,526 was recorded as a reduction to cost of goods sold for inventory sold, $205 was recorded as a reduction in the carrying value of inventory, and $229 was recorded as a component of other income (expense), net on the unaudited condensed consolidated statement of operations and comprehensive income (loss). Of the $205 recorded as a reduction in the carrying value of inventory, $65 was recognized as a reduction to cost of goods sold during the three months ended September 30, 2026 as the related inventory was sold, and the remaining $140 will be recognized in cost of goods sold as the related inventory is sold. The scope, duration, and impact of future tariff policies remain uncertain and could adversely affect our business, financial condition, results of operations, and cash flows. We will continue to monitor developments in this area and take actions to mitigate potential impacts as appropriate.

The actions initiated by the Camera Cable Guard Safety Update are expected to reduce cash flows from operations in the fourth quarter of 2026 and the first half of 2027. We believe our cash and borrowing availability are sufficient to meet our obligations for at least the next twelve months. See Note 12, Subsequent Events within our condensed consolidated financial statements.

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.

Wells Fargo Line of Credit

On June 26, 2026, we entered into a 3-year $25,000 secured asset-based revolving credit agreement with Wells Fargo Bank, National Association (“Revolving Facility”) that includes a $10,000 accordion feature under which the Revolving Facility may be expanded by agreement of the parties from up to $25,000 to up to $35,000 (in minimum increments of at least $5,000). Loans and other obligations under the Revolving Facility bear interest at a rate per annum equal to the daily Secured Overnight Financing Rate plus a margin of 2.00% or 2.25% depending on the monthly average excess availability under the Revolving Facility. The Credit Agreement requires that we comply with certain covenants, including that we (i) maintain at least $7,500 of liquidity at all times, and (ii) achieve certain minimum EBITDA thresholds specified in the Revolving Facility.

As of September 30, 2026, we had borrowings of $11,010 outstanding under the Revolving Facility. The outstanding borrowings as of September 30, 2026 were repaid to Wells Fargo in October 2026. The remaining borrowing capacity under the Revolving Facility was $7,897 as of September 30, 2026.

As of September 30, 2026, we were in compliance with all covenants under the Credit Agreement.

WTI Loan Facility

On June 26, 2026, in connection with our entry into the Revolving Facility, we repaid all outstanding borrowings under the WTI Loan Facility using proceeds from borrowings under the Revolving Facility, and terminated the WTI Loan Facility. We recognized a loss on extinguishment of $1,605 in connection with the extinguishment on the unaudited condensed consolidated statement of operations and comprehensive income (loss), of which $1,098 was due to the write-off of unamortized debt financing costs previously capitalized on the unaudited condensed consolidated balance sheets for the three months ended June 30, 2026.

ABL Line of Credit

On June 26, 2026, in connection with our entry into the Revolving Facility, we terminated the ABL Line of Credit. We recognized a loss on extinguishment of $604 in connection with the extinguishment on the unaudited condensed consolidated statement of operations and comprehensive income (loss), of which $374 was due to the write-off of unamortized loan commitment assets previously capitalized on the unaudited condensed consolidated balance sheets for the three months ended June 30, 2026.

Financed Insurance Premium

Cash Flows

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


	Nine Months Ended September 30,
	2026		2025
Net cash used in operating activities	$	(2,961)	$	(10,340)
Net cash used in investing activities	(2,013)		(454)
Net cash provided by (used in) financing activities	(4,108)		14,223
Net change in cash, cash equivalents, and restricted cash	$	(9,082)	$	3,429

Operating Activities

For the nine months ended September 30, 2026, net cash used in operating activities was $2,961 as compared to net cash used in operating activities of $10,340 in the prior year. The positive change in operating cash flows was primarily driven by a significant improvement in net loss that was largely offset by an unfavorable swing in the non-cash fair value adjustment on our common stock warrant liability. Other non-cash adjustments partially offset this change, including $5,000 higher stock-based compensation expense and a $2,209 loss on debt extinguishment related to the June 2026 debt refinancing, as well as a $1,370 lower net use of cash from changes in operating assets and liabilities. The lower use of cash from operating assets and liabilities was primarily due to lower cash used for accounts receivable and inventory, partially offset by a swing from a source to a use of cash for accounts payable and accrued expenses.

Investing Activities

For both the nine months ended September 30, 2026 and September 30, 2025, we used $2,013 and $454, respectively, to invest in various projects, primarily for property and equipment and the development and enhancement of our subscription app.

Financing Activities

For the nine months ended September 30, 2026 and September 30, 2025, net cash provided by (used in) financing activities was $(4,108) and $14,223, respectively. The change is primarily driven by the repayment of long-term borrowings, related to the June 2026 debt refinancing, higher employee taxes paid related to the vesting and settlement of stock-based awards ($4,790 compared to $944), and lower net proceeds from short-term borrowings, partially offset by higher proceeds related to the issuance of common stock under stock plans.

Critical Accounting Policies and Estimates

There have been no material changes from the critical accounting policies and estimates disclosed in our Form 10-K, 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 September 30, 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 September 30, 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 weakness:

•We did not design and maintain effective controls over the completeness and accuracy of accrued liabilities. This material weakness resulted in immaterial adjustments within the year ended December 31, 2022, the year ended December 31, 2024, and in the interim periods ended March 31, 2025 and June 30, 2025.

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 of Previously Reported Material Weaknesses in Internal Control Over Financial Reporting

As previously reported in our Form 10-Q for the three and six month periods ended June 30, 2026, we identified material weaknesses in our internal control over financial reporting. The material weaknesses previously identified included the following:

•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.

•We did not design and maintain effective controls over the accounting for the accuracy and existence of inventory.

In response to these identified material weaknesses, our management, with the oversight of the Audit Committee of our board of directors, has been actively engaged in remediating the above material weaknesses. During the year ended December 31, 2025 and during the nine months ended September 30, 2026, we implemented remediation measures designed to remediate these material weaknesses, including the following:

•Designed and implemented system-enforced controls requiring a review and approval of manual journal entries by someone other than the creator.

•Designed and implemented controls related to accuracy and existence of inventory, including inventory cutoff, inventory adjustments, the review of customer shipping terms, and year end physical inventory observations.

Management has concluded that the remediation measures described above related to journal entry segregation of duties and the accuracy and existence of inventory have been designed, implemented, and have operated effectively for a sufficient period of time for management to conclude, based on the results of our testing over the design and operating effectiveness of these controls, that the previously identified material weaknesses have been remediated as of September 30, 2026.

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 may include hiring additional accounting and financial reporting personnel and implementing additional policies, procedures and controls, all of which have and may continue to result in future costs for the Company.

During the quarter ended September 30, 2026, we continued to design internal controls to address the material weakness related to accrued liabilities.

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 September 30, 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.

On August 3, 2026, the U.S. District Court for the Central District of California entered final orders granting final approval of the settlements in both the consolidated securities class action (Butala v. Owlet, Inc., Case No. 2:21-cv-09016-FLA-SSC) and the consolidated shareholder derivative action (Vargas v. Workman, et al., Case No. 2:24-cv-07258-FLA-PVC), fully resolving and dismissing both matters with prejudice, and all applicable appeal periods have since expired without appeal.

For a detailed description of these finalized settlements and our general 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, which is 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.

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

There were no unregistered sales of equity securities for the three months ended September 30, 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) None.

(b) None.

(c) During the three months ended September 30, 2026, none of the Company's 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

10.1+

Amendment No.3 to the Owlet, Inc. 2021 Incentive Award Plan, as amended. (incorporated by reference to Appendix A to the Company’s definitive Proxy Statement on DEF 14A filed with the Securities Exchange Commission on June 30, 2026

DEF 14A

001-39516

Appendix A

06/30/2026

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.

Each management contract and compensatory plan has been marked with a plus symbol (+).

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: November 13, 2026	By:	/s/ Kurt Workman
	Name:	Kurt Workman
	Title:	President and Chief Executive Officer
		(Principal Executive Officer)

Date: November 13, 2026	By:	/s/ Amanda Crawford
	Name:	Amanda Crawford
	Title:	Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)