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]

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, 2021 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 - For the full year 2021, the company recorded revenue of $75.8 million, a slight increase of $0.4 million from $75.4 million in 2020, with a significant year-over-year increase of $23.9 million during the first nine months offset by net contra revenue in Q4 2021 [28][30] - Q4 2021 product gross billings before promotions and reserves were approximately $11 million, leading to total net negative revenues of $2.5 million for the quarter due to the halt in sales of Smart Sock products [22][21] - Operating loss for Q4 2021 was $33.3 million, compared to an operating loss of $3.4 million for the same period in 2020, while net loss for Q4 2021 was $24.1 million compared to $5.8 million in Q4 2020 [24][30] Business Line Data and Key Metrics Changes - The company launched the Dream Sock and Dream Duo product lines in January 2022, which are designed to monitor babies' sleep and provide insights to parents [12][13] - International revenue grew by over 100% from 2020 to 2021, with Owlet products now available in 16 countries [14] Market Data and Key Metrics Changes - The company reported that all major US retailers have the Dream product line available online, with many also stocking it in stores by the end of Q1 2022 [34] - The international business had a strong start in Q1 2022, continuing the momentum from a successful expansion year in 2021 [35] Company Strategy and Development Direction - The company aims to increase market penetration in the connected nursery segment, invest in product innovation, and focus on obtaining marketing authorizations in the US and key global markets [32] - Owlet is working on expanding its product ecosystem, including a smart crib and enhancing its sleepwear product line [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in Q4 2021 due to the FDA warning letter but expressed optimism about the long-term opportunities and the successful launch of new products [11][32] - The company is actively managing variable spending and finding ways to mitigate inflationary pressures while maintaining sufficient liquidity [36] Other Important Information - The company received ISO 1345 and MDSAP certifications as part of its efforts to submit medical device applications for the Smart Sock in various international markets [16] - As of December 31, 2021, cash and cash equivalents were approximately $95 million [24] Q&A Session Summary Question: Clarification on Q1 billing expectations - Management provided high-level directional commentary but did not offer specific guidance for Q1 financial expectations, indicating that the new product's market presence is still being evaluated [41] Question: Inquiry about product accessories - Management clarified that new accessories are primarily non-smart items, such as the sleepwear line, which will integrate with the Smart Sock and camera [46][47] Question: Revenue figure excluding contra revenue - Management stated that due to the negative revenue in Q4, they could not provide a separate revenue figure excluding contra revenue [61] Question: International sales growth specifics - Management confirmed over 100% growth in international sales but did not provide specific figures, citing strong momentum going into 2022 [65] Question: Retailer relationships post-FDA actions - Management confirmed that they did not lose any retailers and maintained all existing relationships despite the challenges faced [66] Question: Update on international expansion - Management reported positive adoption rates in new international markets and ongoing efforts to expand into South America and Asia [69] Question: Timeline for FDA approval of OTC stock - Management emphasized that obtaining clearance for the OTC stock is a top priority, with ongoing discussions with the FDA to ensure all necessary information is included in submissions [70] Question: Product development updates - Management shared positive feedback on prototypes for the smart crib, indicating it is in development but did not announce a specific market release date [74]

Financial Performance - As of September 30, 2021, the company had an accumulated deficit of $119.4 million, up from $71.7 million as of December 31, 2020[135]. - The company reported a net loss of $34.5 million for the three months ended September 30, 2021, compared to a net loss of $1.5 million for the same period in 2020[154]. - Adjusted EBITDA for the nine months ended September 30, 2021, was $(13.9) million, with an Adjusted EBITDA margin of (17.7)%[154]. - Revenues for the three months ended September 30, 2021, increased by $10.3 million, or 48.8%, to $31.5 million compared to $21.2 million for the same period in 2020, driven by a 54% increase in sales volume[168]. - Revenues for the nine months ended September 30, 2021, increased by $23.9 million, or 44.0%, to $78.4 million compared to $54.4 million for the same period in 2020, primarily due to a 47% increase in sales volume[170]. - Gross profit for the three months ended September 30, 2021, was $14.9 million, representing a 51.5% increase from $9.8 million for the same period in 2020[171]. - Gross margin for the three months ended September 30, 2021, improved to 47.2% from 46.4% for the same period in 2020[171]. Expenses - General and administrative expenses for the three months ended September 30, 2021, increased by $6.1 million, or 191.5%, to $9.3 million compared to $3.2 million for the same period in 2020[173]. - Sales and marketing expenses for the three months ended September 30, 2021, increased by $8.0 million, or 159.3%, to $13.1 million compared to $5.0 million for the same period in 2020[176]. - Research and development expenses are expected to increase significantly as the company invests in the development of its monitoring pipeline, including Smart Sock variants[162]. - Sales and Marketing expense increased by $13.7 million, or 104.3%, from $13.1 million for the nine months ended September 30, 2020 to $26.8 million for the nine months ended September 30, 2021, representing 34.2% of revenues[177]. - Research and Development expense increased by $3.6 million, or 131.5%, from $2.7 million for the three months ended September 30, 2020 to $6.3 million for the three months ended September 30, 2021, accounting for 20.1% of revenue[178]. - For the nine months ended September 30, 2021, Research and Development expenses increased by $6.6 million, or 86.9%, from $7.6 million in the same period of 2020, representing 18.2% of revenue[179]. Cash Flow and Financing - The company generated net cash used in operating activities of $34.7 million for the nine months ended September 30, 2021, primarily due to a net loss of $47.6 million[201]. - Net cash used in investing activities increased to $1.6 million for the nine months ended September 30, 2021, up from $0.9 million in the same period of 2020[203]. - For the nine months ended September 30, 2021, net cash provided by financing activities was $134.2 million, compared to $2.9 million for the same period in 2020[204][206]. - The financing activities in 2021 included gross draws of $8.2 million on the line of credit and the issuance of $5.0 million in additional long-term debt[204]. - As of September 30, 2021, the company had cash and cash equivalents of $114.9 million[187]. - The company had an amended loan and security agreement with Silicon Valley Bank, with a borrowing capacity under the SVB Revolver of $17.5 million as of September 30, 2021[191]. Regulatory and Market Expansion - The company suspended distribution of the Owlet Smart Sock in the U.S. as of October 2021 in response to a Warning Letter from the FDA, impacting sales and operations[140]. - The company plans to develop a new sleep monitoring sock, the Owlet Dream Sock, which is expected to avoid the regulatory concerns raised by the FDA regarding the Owlet Smart Sock[144]. - The company is developing two variations of the Owlet Smart Sock as medical devices, which will require FDA marketing authorization[145]. - The company aims to expand its market presence internationally, focusing on Europe, Asia, and Latin America, while investing in its supply chain to support this expansion[147]. - International revenues for the three months ended September 30, 2021, increased by $2.1 million, or 170.4%, to $3.3 million compared to $1.2 million for the same period in 2020[169]. Company Classification and Risks - The company qualifies as an emerging growth company (EGC) under the JOBS Act, allowing for an extended transition period to comply with new accounting standards[211]. - The company anticipates remaining an EGC until at least December 31, 2025, or until certain revenue thresholds are met[213]. - The company is classified as a "smaller reporting company," allowing for reduced disclosure obligations[214]. - The company is exposed to market risks primarily due to interest rate fluctuations and credit risk[215]. - The interest rate on the Term Note was the greater of the prime rate plus 3.5% or 6.5% as of September 30, 2021, with no material risk from interest rate fluctuations[217]. - Substantially all cash and cash equivalents are deposited in one financial institution, minimizing credit risk[218]. - The company has experienced significant credit losses primarily from a national retailer's bankruptcy in September 2017, but maintains an allowance for doubtful accounts[220].

Owlet, Inc. (NYSE:OWLT) Q3 2021 Results Conference Call November 10, 2021 4:30 PM ET Company Participants Mike Cavanaugh - Investor Relations Kurt Workman - Co-Founder and Chief Executive Officer Kate Scolnick - Chief Financial Officer Conference Call Participants Charles Rhyee - Cowen & Co John Babcock - Bank of America Jim Suva - Citigroup Operator Hello everyone and welcome to Owlet Q3 2021 Earnings Call. My name is [Nadia] and I will be coordinating your call today. [Operator Instructions] I will now ha ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission File No. 001-39516 OWLET, INC. (Exact name of registrant as specified in its charter) (State or other jurisdict ...