Owlet(OWLT) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenues for the three months ended September 30, 2024, were $22,122 thousand, a significant increase from$9,182 thousand in the same period of 2023, representing a growth of 141%[19] - Gross profit for the three months ended September 30, 2024, was $11,546 thousand, compared to$3,329 thousand in the same period of 2023, indicating a gross margin improvement[19] - The net loss attributable to common stockholders for the three months ended September 30, 2024, was $(6,756) thousand, compared to$(6,960) thousand in the same period of 2023, showing a slight improvement[19] - Operating expenses for the three months ended September 30, 2024, totaled $16,368 thousand, up from$11,209 thousand in the same period of 2023, representing a 46% increase[19] - Revenues for the nine months ended September 30, 2024, increased by $24.6 million, or 74.4$33.0 million in the same period of 2023 to $57.6 million[155] - The Company recorded an operating loss of$12.8 million for the nine months ended September 30, 2024, compared to an operating loss of $25.6 million for the same period in the prior year[198] Assets and Liabilities - Total current assets increased to$52,281 thousand as of September 30, 2024, from $39,944 thousand as of December 31, 2023, reflecting a growth of 31$65,520 thousand as of September 30, 2024, down from $73,799 thousand as of December 31, 2023, a reduction of approximately 11$21,502 thousand as of September 30, 2024, from $16,557 thousand as of December 31, 2023, an increase of 30$(21,459) thousand as of September 30, 2024, an improvement from $(37,531) thousand as of December 31, 2023[16] - The total stockholders' deficit as of September 30, 2024, was$259,143,000[26] - Cash and cash equivalents at the end of the period were $21,882,000, up from$15,165,000 at the end of September 30, 2023[24] Stock and Financing Activities - Proceeds from the issuance of preferred stock and warrants were $8,856,000 for the nine months ended September 30, 2024[24] - The Company issued common stock for restricted stock units vesting totaling 439,659 shares during the reporting period[26] - The Company issued 3,135,136 shares of common stock in September 2024, generating net proceeds of$9,843, and completed a sale of preferred stock and warrants for net proceeds of $8,856 in February 2024[35] - The Company entered into a loan facility agreement for a term loan of up to$15,000 and an asset-based revolving credit facility with a maximum commitment of $15,000, with an additional$5,000 available in September 2025[36] - The Company issued 750,000 shares of redeemable common stock to WTI as part of the Loan Facility Agreement, with an initial value of $4,308 million[75][76] Expenses and Costs - Research and development expenses for the three months ended September 30, 2024, were$2,559 thousand, slightly up from $2,426 thousand in the same period of 2023[19] - General and administrative expenses increased by$4.3 million, or 79.6%, from $5.4 million for the three months ended September 30, 2023, to$9.8 million for the same period in 2024[159] - Sales and marketing expenses increased by $0.7 million, or 20.6$3.3 million for the three months ended September 30, 2023, to $4.0 million for the same period in 2024[161] - Interest expense decreased by$2.7 million, from $3.0 million for the nine months ended September 30, 2023, to$0.3 million for the same period in 2024[167] Cash Flow and Operating Activities - Cash used in operating activities for the nine months ended September 30, 2024, was $14,530,000, a decrease from$21,951,000 in the prior year[24] - Net cash provided by financing activities was $20.6 million for the nine months ended September 30, 2024, down from$25.9 million in the same period in 2023, primarily due to lower proceeds from stock offerings[200] - The company has not generated sufficient cash flows from operations to meet capital requirements, raising substantial doubt about its ability to continue as a going concern[178][181] Legal and Compliance Issues - The Company has experienced recurring operating losses and negative cash flows from operations since inception, raising substantial doubt about its ability to continue as a going concern[39] - As of September 30, 2024, the company concluded that its disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting[204] - The company identified deficiencies in maintaining an effective control environment, including insufficient personnel with appropriate accounting knowledge[207] - Material weaknesses included ineffective controls over the segregation of duties related to journal entries, which did not result in adjustments to the consolidated financial statements[207] Shareholder and Stockholder Information - The weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders increased to 11,042,602 for the three months ended September 30, 2024, compared to 8,310,965 for the same period in 2023[19] - The Company reported a basic and diluted net loss per share attributable to common stockholders of $(0.57) for the three months ended September 30, 2024, compared to$(0.61) for the same period in 2023[134] - The total number of common stock warrants increased to 11,099,708 as of September 30, 2024, from 9,175,282 as of September 30, 2023[137]