UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ____________________________________________________________________________ FORM 10-Q ____________________________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ t ...

Financial Data and Key Metrics Changes - Total revenues for Q1 2023 were $10.7 million, a sequential decrease from $12 million in Q4 2022, primarily due to seasonality and intentional focus on normalizing channel inventory [16][26] - Gross margin improved to 39.3% in Q1 2023, compared to 27.5% in Q4 2022, attributed to better purchase price variance costs and reduced promotional activity [56] - Adjusted EBITDA loss for Q1 was $5.8 million, significantly reduced from $15.2 million in Q4 2022 [57][30] Business Line Data and Key Metrics Changes - Channel sell-through increased by 36% year-over-year, indicating strong consumer demand for Owlet's products, particularly the Dream Sock [3][8] - Operating loss for Q1 was $11 million, an improvement from $20.7 million in Q4 2022 and $21.7 million in Q1 2022 [17] Market Data and Key Metrics Changes - Over 300,000 parents added Owlet to their registry in the last year, showcasing strong brand demand [5] - Owlet ranked number one on Amazon for Smart Baby monitors, reinforcing its market leadership [5] Company Strategy and Development Direction - The company aims to achieve long-term sustainable growth and profitability through operational discipline, cost management, and regulatory approvals for new products [2][4] - Owlet is focusing on improving channel health and inventory normalization while preparing for seasonal sales catalysts in Q2 [9][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds from the bankruptcy of buybuy BABY, which was a significant retailer for Owlet, but expressed confidence in transitioning demand to other channels like Babylist, Target, and Amazon [7][62] - The company remains committed to achieving adjusted EBITDA breakeven by the end of 2023 despite the challenges faced [51][46] Other Important Information - Owlet has reduced corporate spending and aims to keep adjusted operating expenses below $40 million for the full year [14] - The company is actively pursuing FDA clearances for its monitoring platforms, which are expected to unlock further growth opportunities [12][54] Q&A Session Summary Question: Impact of buybuy Baby bankruptcy on sales - Management indicated that buybuy Baby was a key specialty retailer, and its bankruptcy would create short-term headwinds as inventory is liquidated, but they are optimistic about shifting demand to other channels [42][62] Question: Sell-through performance and revenue outlook - Management noted that sell-through was up 36% sequentially, and they expect revenue to improve in Q2 due to upcoming promotional events [64][65]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ 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 incorpor ...

Financial Data and Key Metrics Changes - Gross billings for Q4 2022 were $15.4 million, down from $23.4 million in Q3 2022, with product promotions and discounts of $2 million in Q4 compared to $3.2 million in Q3 [8][37] - Q4 operating expenses were $24.1 million compared to $26.4 million in Q3, with underlying operating expenses at $15.2 million, marking a significant improvement [9][38] - The company reported a Q4 operating loss of $20.7 million and a net loss of $19.5 million, with an adjusted EBITDA loss of $15.2 million [38][39] Business Line Data and Key Metrics Changes - Owlet's Dream portfolio was re-launched in early 2022, achieving full-year product portfolio revenues of $69.2 million, while maintaining strong customer satisfaction [70][72] - The company is focused on achieving gross margins of 40% to 50% in future periods through tighter management of promotional spend and supply chain costs [4][108] Market Data and Key Metrics Changes - Owlet is now the number one selling monitor on Amazon year-to-date in 2023, with a significant improvement in customer satisfaction reflected in the Net Promoter Score (NPS) [3][68] - Sell-through growth quarter-over-quarter reached nearly $20 million in gross revenue in Q4, with inventory and channel normalizing [68][78] Company Strategy and Development Direction - The company aims to position itself for cash flow positive, profitable, and long-term sustainable growth through category-defining products [2][69] - Owlet is actively pursuing regulatory clearances for its products, with significant progress made towards FDA and international applications [6][35][128] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties and emphasized the importance of achieving profitability and improving working capital [10][36] - The company expects sell-through to align with sell-in by the end of Q2 2023, with a forecast for sequential revenue improvement throughout the year [32][39] Other Important Information - The company raised $30 million in additional capital to support its balance sheet and operational goals in 2023 [1][73] - Cash and cash equivalents as of December 31, 2022, were approximately $11.2 million, with accounts receivables at $16 million and inventory at $18.5 million [77] Q&A Session Summary Question: What was the sell-through in the first half of the year? - Management indicated that sell-through was substantial, with significant load-in to get back to previous levels of Smart Sock inventory in retail, but initial sell-through did not start as strongly as previous periods [88][89] Question: How do you view the seasonality of the business in a normalized year? - Management noted that Q1 is generally the lightest quarter, with Q2 expected to pick up due to Mother's Day and Father's Day promotions [97] Question: Can you provide insights on the FDA submission process? - Management confirmed that they are currently working through responses to FDA questions and are confident in their products meeting FDA standards [53][60]

Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $17.4 million, reflecting a challenging macroeconomic environment impacting sell-through and demand [7][30] - Gross billings for Q3 were $23.4 million, up from $22.7 million in Q2, indicating a sequential improvement despite headwinds [27] - Q3 gross margin decreased to 26.6% from 36.1% in Q2, primarily due to increased returns and allowances, and a shift in product mix towards lower-margin camera units [31][33] Business Line Data and Key Metrics Changes - The product mix in Q3 shifted over 35% towards camera units, which have lower margins compared to the Sock product [31] - Q3 product promotions and discounts totaled $3.2 million, up from $2.5 million in Q2, indicating increased promotional activity [28] Market Data and Key Metrics Changes - Owlet was the number one baby monitor brand on Amazon in the U.S. for Q3 based on revenue, showcasing strong brand performance [11] - The company experienced significant distribution expansion with U.S. retailers for 2023 and beyond, positioning itself for holiday season success [8][37] Company Strategy and Development Direction - The company aims to return to gross margins of 45% to 50% through tighter management of promotional spend and supply chain costs [9][33] - Owlet is focused on operational strides towards profitability, targeting breakeven adjusted EBITDA in 2023 [20][42] - The company is pursuing regulatory authorizations for new products, including a prescription monitoring device and a software-as-a-medical device [12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of an uncertain macroeconomic environment on retailer inventory management and consumer demand [8][38] - The company is cautiously optimistic about the upcoming holiday season, having positioned itself well with key retail partners [55][56] - For 2023, Owlet forecasts revenue growth of 13% to 16% and aims to improve market penetration from 0.09% in 2022 to 0.13% [40][68] Other Important Information - The company has implemented significant cost reduction activities and is negotiating to expand access to working capital [21][22] - Owlet has shown operational resilience over the past year and is focused on long-term leadership in pediatric health [23][25] Q&A Session Summary Question: What was the out-of-period inventory adjustment amount? - The out-of-period inventory adjustment was about a third of the margin impact for the quarter [45] Question: How much is left in terms of potential returns? - Retailers have returned what they expect to return, and the company does not anticipate much more from them [46] Question: What were the discrete expenses in Q3? - The discrete expenses included $1.2 million in severance, $850,000 for regulatory submissions, and $1 million in additional marketing expenses [47] Question: What were the drivers of gross margin decline? - The decline was attributed to an out-of-period inventory adjustment, a shift in product mix, and an increase in returns [48][50] Question: How much of the revenue impact is tied to retailer inventory management versus actual demand? - Underlying demand was strong, with one of the best Prime Days ever, but inventory management by retailers was a significant headwind [54] Question: What is the revenue guidance for next year? - The revenue guidance for 2023 is $69 million to $74 million, with gross margins targeted between 45% and 50% [67][68]

Revenue Performance - Revenues for the three months ended September 30, 2022, decreased by $14.1 million, or 44.9%, to $17.4 million from $31.5 million in the same period of 2021[130]. - Revenues for the nine months ended September 30, 2022, decreased by $21.1 million, or 26.9%, to $57.2 million from $78.4 million in the same period of 2021[131]. Profitability Metrics - Gross profit for the three months ended September 30, 2022, was $4.6 million, a decrease of $10.3 million, or 69.0%, compared to $14.9 million in the same period of 2021[132]. - Gross margin for the three months ended September 30, 2022, decreased to 26.6% from 47.2% in the same period of 2021[132]. - Operating loss for the three months ended September 30, 2022, was $(21.8) million, compared to $(13.8) million in the same period of 2021[129]. Operating Expenses - Total operating expenses for the three months ended September 30, 2022, were $26.4 million, compared to $28.6 million in the same period of 2021[129]. - General and administrative expenses increased by $0.4 million, or 4.6%, from $9.3 million in Q3 2021 to $9.7 million in Q3 2022[134]. - For the nine months ended September 30, 2022, general and administrative expenses rose by $6.9 million, or 30.8%, from $22.5 million in 2021 to $29.4 million in 2022[135]. - Sales and marketing expenses decreased by $3.4 million, or 25.8%, from $13.1 million in Q3 2021 to $9.7 million in Q3 2022[136]. - For the nine months ended September 30, 2022, sales and marketing expenses increased by $4.3 million, or 16.0%, from $26.8 million in 2021 to $31.0 million in 2022[137]. - Research and development expenses increased by $0.7 million, or 11.8%, from $6.3 million in Q3 2021 to $7.1 million in Q3 2022[139]. - For the nine months ended September 30, 2022, research and development expenses rose by $9.1 million, or 63.9%, from $14.3 million in 2021 to $23.4 million in 2022[140]. Cash Flow and Liquidity - As of September 30, 2022, the company had cash and cash equivalents of $23.2 million[145]. - The company experienced negative cash flows from operations of $71.6 million for the nine months ended September 30, 2022[148]. - For the nine months ended September 30, 2022, net cash used in operating activities was $71.6 million, compared to $34.7 million in the prior year[168]. - Net cash provided by financing activities decreased to $1.1 million for the nine months ended September 30, 2022, from $134.2 million in the prior year[170]. - Net cash used in investing activities decreased to $1.4 million for the nine months ended September 30, 2022, from $1.6 million in the prior year[169]. Debt and Financing - The company had outstanding borrowings of $5.0 million under the SVB Revolver, with an interest rate of 7.50%[158]. - The Term Note had an aggregate principal balance of $9.5 million as of September 30, 2022, with a minimum interest rate of 5.75%[159]. - A refund liability of $6.8 million was accrued as of September 30, 2022, which was reduced by $6.2 million during Q3 2022[152]. - The company recognized $1.2 million of restructuring charges related to its July 2022 restructuring, primarily for severance and related employee benefits[152]. - The company is actively engaged with SVB to restructure financing arrangements, but there are no assurances of reaching an agreement[164]. - A waiver agreement with SVB lowered the minimum liquidity covenant from $30.0 million to $22.5 million[162]. Compliance and Adjustments - The company was in violation of its minimum net revenue requirement for the three months ended September 30, 2022, and does not expect compliance for the third and fourth quarters of 2022[162][163]. - The company recorded out-of-period adjustments totaling a net income impact of $1.3 million during the three months ended September 30, 2022[118]. - The company expects to reduce run-rate operating costs to approximately $15 million to $19 million per quarter exiting the fourth quarter of 2022[117].

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 June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ...

Financial Data and Key Metrics Changes - Owlet generated net revenues of $18.3 million for Q2 2022, which fell short of previous guidance and was impacted by lower gross billings of $22.7 million [8][28] - Gross margin for Q2 2022 was 36.1%, a significant decrease from 54.2% in the prior year, primarily due to macro inflationary pressures and product costs [30] - Operating loss for Q2 2022 was $20.4 million, compared to a loss of $5.9 million in the same period in 2021 [33] Business Line Data and Key Metrics Changes - The sell-through rate for Owlet's Dream products grew over 40% from Q1 to Q2 2022, but was slower than expected, leading to lower gross billings [10][11] - Product promotions and discounts in Q2 amounted to $2.5 million, consistent with the prior year, including $2.3 million related to Amazon Prime Day [29] Market Data and Key Metrics Changes - International gross billings increased over 60% year-to-date, with significant progress in launching products in Asia, particularly South Korea [16] - Retailers began to reduce inventory levels in response to macroeconomic headwinds, impacting Owlet's sell-in and sell-through dynamics [11][36] Company Strategy and Development Direction - The company is focusing on three primary areas: achieving strong sell-through of core products, advancing medical device submissions, and managing expenses to reach breakeven adjusted EBITDA by 2023 [12][36] - A restructuring program was implemented to streamline operations and reduce costs, including a workforce reduction of approximately 74 employees [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding consumer spending and retailer inventory management in the current macroeconomic environment, while remaining optimistic about the product portfolio [43][36] - The company is not providing revenue guidance for Q3 due to reduced forecasting visibility but expects lower operating expenses sequentially [37] Other Important Information - The company plans to submit its 510(k) application to the FDA for the BabySat device, aimed at providing care for sick babies [18] - The resignation of Mike Abbott, President and Board member, was announced, marking a significant change in leadership [25] Q&A Session Summary Question: Guidance on the back half of the year - Management acknowledged caution on consumer spending and macro conditions affecting retailer inventory management [40][43] Question: Demand trends and inventory management - Management noted that while sell-through improved from Q1 to Q2, retailers began pulling back on inventory forecasts in June [46][48] Question: Breakeven timeline and impact on growth - Management indicated a target for breakeven adjusted EBITDA by the end of 2023, with a focus on reducing operating expenses in the second half of the year [52][61]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ____________________________________________________________________________ FORM 10-Q ____________________________________________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ t ...

Financial Data and Key Metrics Changes - Q1 gross billings before promotions and reserves were approximately $26 million, a 5% year-over-year increase from $25 million [25] - Q1 net revenues were $21.5 million, relatively flat compared to $21.9 million in Q1 2021 [26] - Q1 gross margin was 40.7%, impacted by macro inflationary pressures and higher return adjustments [26][27] - Operating expenses for Q1 2022 were $30.5 million, up from $15.5 million in the same period in 2021 [27] - Q1 operating loss was approximately $22 million, and net loss was $29 million, compared to $3 million operating loss and $8 million net loss in Q1 2021 [27] Business Line Data and Key Metrics Changes - The Dream Sock and Duo products saw double-digit month-over-month sell-through growth for the past three months [12] - Return adjustments for Q1 2022 were $3 million, 11.7% of gross billings, compared to $1.2 million, 4.8% of gross billings in Q1 2021 [25][26] - Customer satisfaction metrics improved, with 93% of parents reporting peace of mind with the Dream Sock [13] Market Data and Key Metrics Changes - International revenue grew over 100% year-over-year, accounting for 13% of total revenue in Q1 2022 [19][26] - The company expanded its retail footprint significantly in the UK, including partnerships with Harrods and John Lewis [19] Company Strategy and Development Direction - The company is focused on building a connected nursery ecosystem, with investments in new products like smart cribs and a membership program [9][11] - Plans to obtain medical device regulatory clearances to accelerate market adoption [11][18] - The company aims to expand its international presence and increase penetration in existing markets [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased inflationary cost pressures and ongoing pandemic uncertainties affecting operations [30] - For Q2, the company anticipates revenues in the range of $23 million to $25 million, with continued headwinds from inflation and inventory rework [31][32] Other Important Information - The company is working towards FDA submissions for both prescription and over-the-counter versions of its products [18][58] - The company has made significant charitable contributions, including donating 650 monitors to Ukrainian refugees [20] Q&A Session Summary Question: Clarification on inventory rework - Management confirmed that the $3 million mentioned refers to return reserves related to new product launches, with expectations of stabilization in return rates [36][48] Question: Competitive landscape - Management noted increased competition in the camera segment but emphasized Owlet's leadership in sleep tracking technology [41][42] Question: Impact of return rates on revenue - Management explained that higher return rates were due to initial consumer confusion with new product launches, which have since improved [47][48] Question: Revenue guidance visibility - Management indicated that Q2 revenue expectations are based on sell-through activities correlating with promotional opportunities [52] Question: International market impact from geopolitical events - Management reported strong growth in Europe despite some softness due to the Russia-Ukraine crisis, with overall strong consumer demand [54]