Owlet, Inc.
For the period ended Mar 31, 2026. Filed May 11, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 11, 2026
OWLT$4.17-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001816708-25-000062
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001816708-26-000049
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 97 previous paragraphs and 70 current paragraphs.
30 unchanged; 18 reworded; 22 added; 47 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
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.
Current report
Revenue
Current report
Cost of Revenue
Current report
Revenue
Current report
The decrease in hardware revenue was primarily due to approximately $3,100 impact from a large retail partner tightening weeks of supply on hand as well as timing differences of load-ins to retailers, partially offset by approximately $1,800 decrease in retail discounts due to the timing of promotion load-in dates, and approximately $400 increased direct-to-consumer demand.
Current report
The increase in subscription revenue was due to an increase in subscribers for our Owlet360 service and higher average revenue per user.
Current report
Cost of Revenue, Gross Profit, and Gross Margin
Current report
The decrease in hardware cost of revenue was primarily due to the decrease in product sales. The decrease in hardware gross margin was primarily due to the impact of tariffs, partially offset by favorable product mix and lower direct product and fulfillment costs.
Current report
The increase in subscription cost of revenue was primarily due to increased subscriptions to our Owlet360 service. The increase in subscription gross margin is attributable to efficiencies gained due to a larger subscription base.
Current report
The increase was driven primarily by approximately $1,400 of stock-based compensation, and by approximately $800 in increases of headcount related expenses, including salaries and benefits.
Current report
The increase was driven primarily by approximately $300 in higher marketing personnel and consulting costs, $200 in expanded retail marketing spend, and $100 in increased stock-based compensation, partially offset by $100 in miscellaneous net decreases.
Current report
The increase was driven primarily by approximately $800 in higher personnel costs, $400 in stock-based compensation, and $200 in regulatory testing and geographic expansion costs. These increases were partially offset primarily by approximately $300 in increased capitalized software costs.
Current report
The decrease in interest expense was driven primarily by a decrease in loan commitment amortization related to our current term loan facility due to the last loan commitment period ending in November 2025.
Current report
Fluctuations in our common stock warrant liability adjustment resulted from a decrease in our common stock price, and the related decrease in the fair value of liability-classified common stock warrants.
Current report
Changes in other income (expense) were driven primarily by a gain from insurance proceeds.
Current report
Equity Financings
Current report
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.
Current report
Debt and Other Financing Arrangements
Current report
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.
Current report
During the three months ended March 31, 2026, the WTI Funds sold to an unrelated third-party 310,000 shares of Owlet common stock previously classified in mezzanine equity due to the Redemption Option described in Note 4 within the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report. As redemption rights are not transferable, we reclassified $2,439 of the mezzanine equity balance to Stockholders' Equity Additional Paid-In Capital upon sale.
Current report
As of March 31, 2026 principal outstanding on the loan was $6,259. The net carrying value of the WTI Loan Facility was $5,191, which includes the outstanding principal and accrued PIK interest of $291, net of $1,359 in unamortized debt financing costs.
Current report
As of March 31, 2026, there was $13,353 of outstanding borrowings under the ABL Line of Credit, and the remaining borrowing base availability was $3,944 as of March 31, 2026.
Removed paragraphs (47)
Previous report
Our mission is to empower parents with the right information at the right time, to give them more peace of mind and help them find more joy in the journey of parenting. Our digital parenting platform aims to give parents real-time data and insights to help parents feel calmer and more confident. We believe that every parent deserves peace of mind and the opportunity to feel their well-rested best. We also believe that every child deserves to live a long, happy, and healthy life, and we are working to develop products to help facilitate that belief.
Previous report
Revenues
Previous report
Cost of Revenues
Previous report
Revenues
Previous report
Revenues increased by $9,866, or 44.6%, from $22,122 for the three months ended September 30, 2024 to $31,988 for the three months ended September 30, 2025. Revenues increased by $21,584, or 37.5%, from $57,571 for the nine months ended September 30, 2024 to $79,155 for the nine months ended September 30, 2025. For both the three month and nine month periods ended September 30, 2025, the increase in revenues was primarily due to higher sales of Dream Sock and Dream Duo products, reflecting an increase in consumer demand as compared to the same periods in the prior year. The increase in revenues to a lesser extent was also attributed to the growth in revenue for our Owlet360 subscription service, which launched in January 2025.
Previous report
Cost of Revenues and Gross Margin
Previous report
Cost of revenues increased by $5,212, or 49.3%, from $10,576 for the three months ended September 30, 2024 to $15,788 for the three months ended September 30, 2025. The increase in cost of revenues was primarily due to the increase in product sales. Gross margin decreased from 52.2% for the three months ended September 30, 2024 to 50.6% for the three months ended September 30, 2025. The decrease in gross margin was largely due to tariffs, partially offset by a favorable product mix, improved fixed cost absorption, lower direct product and fulfillment costs, and growth in revenue for our Owlet360 subscription service.
Previous report
Cost of revenues increased by $9,023, or 30.9%, from $29,226 for the nine months ended September 30, 2024 to $38,249 for the nine months ended September 30, 2025. The increase in cost of revenues was primarily due to the increase in product sales. Gross margin increased from 49.2% for the nine months ended September 30, 2024 to 51.7% for the nine months ended September 30, 2025. The increase in gross margin was primarily due to higher revenue, favorable product mix, improved fixed cost absorption, and lower direct product and fulfillment costs. The increase in gross margin to a lesser extent was also attributed to the growth in revenue for our Owlet360 subscription service. These contributions to gross margin expansion were partially offset by tariffs, particularly in the third quarter of 2025.
Previous report
General and administrative expenses decreased by $3,514, or 35.9%, from $9,787 for the three months ended September 30, 2024 to $6,273 for the three months ended September 30, 2025. The decrease in general and administrative expenses was driven primarily by the absence of impairment charges related to intangible assets, an insurance loss recovery, and lower stock-based compensation partially offset by higher compensation expense mostly due to an increase in headcount and bonus accrual, as compared to the same period in the prior year.
Previous report
General and administrative expenses decreased by $1,534, or 6.9%, from $22,127 for the nine months ended September 30, 2024 to $20,593 for the nine months ended September 30, 2025. The decrease in general and administrative expenses was driven primarily by the absence of impairment charges related to intangible assets, lower stock-based compensation, and an insurance loss recovery, partially offset by higher compensation expense mostly due to an increase in headcount and bonus accrual and an increase in litigation settlements as compared to the same period in the prior year.
Previous report
Sales and marketing expenses increased by $904, or 22.5%, from $4,022 for the three months ended September 30, 2024 to $4,926 for the three months ended September 30, 2025. The increase in sales and marketing expenses was driven primarily by higher marketing spend and an increase in compensation expense due to accrued bonuses as compared to the same period in the prior year.
Previous report
Sales and marketing expenses increased by $1,476, or 12.5%, from $11,770 for the nine months ended September 30, 2024 to $13,246 for the nine months ended September 30, 2025. The increase in sales and marketing expenses was driven primarily by higher marketing spend and an increase in compensation expense due to accrued bonuses as compared to the same period in the prior year.
Previous report
Research and development expenses increased by $1,226, or 47.9%, from $2,559 for the three months ended September 30, 2024 to $3,785 for the three months ended September 30, 2025. The increase in research and development expenses was driven primarily by increased investment in research and development and higher compensation expense, including accrued bonuses, as compared to the same period in the prior year.
Previous report
Research and development expenses increased by $3,181, or 43.8%, from $7,260 for the nine months ended September 30, 2024 to $10,441 for the nine months ended September 30, 2025. The increase in research and development expenses was driven primarily by increased investment in research and development and higher compensation expense, including accrued bonuses, as compared to the same period in the prior year.
Previous report
Interest expense increased by $748, from $112 of interest expense for the three months ended September 30, 2024 to $860 of interest expense for the three months ended September 30, 2025. Interest expense increased by $2,577, from $253 for the nine months ended September 30, 2024 to $2,830 for the nine months ended September 30, 2025. For both the three and nine month periods ended September 30, 2025, the increase in interest expense was driven primarily by interest and amortization of issuance costs related to the Company's current term loan facility and asset-based revolving credit facility, which were entered into in September 2024 as well as the absence of a gain on interest for forgiveness of interest accrued related to an arrangement with a significant vendor that was fully settled in September 2024, partially offset by the absence of termination fees related to the SVB term loan.
Previous report
For the three months ended September 30, 2025, we recognized a gain of $4,266 as compared to a loss of $673 for the same period in the prior year resulting from a decrease in the fair value of common stock warrants outstanding for the three months ended September 30, 2025, as compared to an increase in the fair value of common stock warrants outstanding for the same period in the prior year.
Previous report
For the nine months ended September 30, 2025, we recognized a loss of $23,800 as compared to a gain of $9,534 for the same period in the prior year resulting from an increase in the fair value of common stock warrants outstanding for the nine months ended
Previous report
September 30, 2025, as compared to a decrease in the fair value of common stock warrants outstanding for the same period in the prior year. Additionally, the loss recognized for the nine months ended September 30, 2025 included the increase in fair value of the Series B Warrants that were issued in February 2024, which were not outstanding for the full period in the prior year.
Previous report
Other income (expense) increased by $475, from $4 of other expense for the three months ended September 30, 2024 to $479 of other expense for the three months ended September 30, 2025. Other income (expense) increased by $499, from $69 of income for the nine months ended September 30, 2024 to $430 of expense for the nine months ended September 30, 2025. For both the three and nine month periods ended September 30, 2025, the increase in expense was driven primarily by transaction costs related to the Warrant Exchange as discussed in Note 7. Common Stock Issuance, Redeemable Common Stock, Common Stock Warrants, and Convertible Preferred Stock and Note 12. Subsequent Events, within the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report.
Previous report
On February 17, 2023 we entered into private placement investment agreements with certain investors, pursuant to which we issued and sold to the investors (i) an aggregate of 30,000 shares of our Series A convertible preferred stock, par value $0.0001 per share and (ii) warrants to purchase an aggregate of 7,871,712 shares of our common stock, par value $0.0001 per share, (“Series A Warrants”) for an aggregate purchase price of $30,000.
Previous report
As of September 30, 2025, 390,378 of the Series A Warrants have been exercised. The Series A Warrants that were exercised were marked to market based on the liability classification of the warrants, and we subsequently received $1,822 of cash proceeds during the nine months ended September 30, 2025 from the exercise of the Series A Warrants.
Previous report
On February 25, 2024 we entered into a private placement investment agreement with certain investors, pursuant to which we issued and sold to the investors (i) an aggregate of 9,250 shares of our Series B convertible preferred stock, par value $0.0001 per share and (ii) warrants to purchase an aggregate of 1,799,021 shares of our common stock, par value $0.0001 per share (the “Series B Warrants”), for an aggregate gross purchase price of $9,250.
Previous report
As of September 30, 2025, 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, 2025. None of the Series B Warrants have been exercised as of September 30, 2025.
Previous report
On August 7, 2025, we entered into a privately negotiated Exchange Agreement with certain Holders of our Series A Warrants and Series B Warrants, in which the Holders agreed to exchange with us 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 of newly issued shares of common stock. We consummated the Exchanges and the issuance of the Exchange Shares on October 10, 2025. See Note 7. Common Stock Issuance, Redeemable Common Stock, Common Stock Warrants, and Convertible Preferred Stock and Note 12. Subsequent Events, within the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report, for additional details regarding this agreement.
Previous report
On September 11, 2024, we entered into an underwriting agreement and issued 3,135,136 shares of our common stock at a price to the public of $3.70 per share, less underwriting discounts and commissions. The net proceeds we received were $10,590. The shares were issued pursuant to our registration statement on Form S-3 (File No. 333-281556), filed by us with the SEC on August 14, 2024, which was declared effective on August 23, 2024. We provided the underwriter a discount of 7% off the offering price.
Previous report
In addition to the underwriter discount, the offering expenses with third parties were $863, of which $0 in issuance costs that were unpaid as of September 30, 2025. We also reimbursed the underwriters for $198 in fees and expenses, including legal expenses, out-of-pocket expenses, and clearing expenses. The issuance costs associated with the September 2024 Offering were recorded as a reduction to additional paid-in capital on the unaudited condensed consolidated balance sheets.
Previous report
Pursuant to the underwriting agreement, we also issued, as a portion of the underwriting compensation payable to the underwriter, a warrant to purchase up to 125,405 shares of our common stock (which was subsequently transferred to certain affiliates of the underwriter, the “Titan Warrants”).
Previous report
The Titan Warrants are initially 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, 2025, 25,081 of the Titan Warrants have been exercised.
Previous report
On October 21, 2025, the Company entered into an underwriting agreement and, on October 23, 2025, the Company completed an offering for the sale of 4,196,000 shares of its common stock at an offering price to the public of $7.15 per share, less underwriting discounts and commissions. 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 shares were issued pursuant to the Company’s registration statement on Form S-3 (File No. 333-281556) filed by the Company with the SEC on August 14, 2024, which was declared effective on August 23, 2024. A final prospectus relating to the offering was filed with the SEC on October 22, 2025.
Previous report
On September 11, 2024,(the “Effective Date”), we, as guarantor, and our wholly-owned subsidiary, Owlet Baby Care, Inc., a Delaware corporation (“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”).
Previous report
We initiated our first drawdown under the WTI Loan Facility of $7,500 (the “Initial Loan”) shortly after finalizing the Loan Facility Agreement in September 2024. We agreed with WTI to extend the remaining $2,500 of the First Tranche Commitment to March 31, 2025. We ultimately elected not to draw on the remainder of the first tranche and, as a result, 62,500 unvested shares of redeemable common stock were forfeited on March 31, 2025. Once repaid, we cannot reborrow from the WTI Loan Facility.
Previous report
The interest rate on the outstanding principal amounts of any borrowing under the WTI Loan Facility for the three months ended September 30, 2025 was 12%. Accrued coupon interest and accrued payment-in-kind interest (“PIK interest”) are recorded within accrued and other expenses and within long-term debt, net respectively on the unaudited condensed consolidated balance sheets. Accrued PIK interest was $201 as of September 30, 2025.
Previous report
As partial consideration for the availability and funding of the WTI Loan Facility, we 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, we issued to the WTI Funds an aggregate of 750,000 shares of redeemable common stock on the Effective Date, of which 62,500 shares of the redeemable common stock have been forfeited and the remaining 125,000 of unvested redeemable common stock are subject to forfeiture in the event that we do not draw on the remaining portion of the outstanding Loan Commitment. To the extent we do exercise our option under the Loan Commitments to issue additional debt, a number of forfeitable shares will 'vest' and no longer be subject to forfeiture based on the pro rata portion of the outstanding Loan Commitments drawn against.
Previous report
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 us to redeem the shares that are no longer subject to forfeiture for a price of $8.40 per share. The Redemption Option may be exercised in whole or in part, at any time, from time to time, during the period commencing on the first trading day following the fifth anniversary of the Effective Date and continuing through the date which is 10 years after the Effective Date, subject to certain acceleration provisions set forth in the WTI Stock Issuance Agreement. Because the shares are redeemable at the option of the WTI Funds, the shares are recorded in mezzanine equity on the unaudited condensed consolidated balance sheets. The redeemable common shares were initially recorded at their fair value of $7.66 per share, which was an aggregate value of $4,308. The value of the redeemable common shares was determined using a combination of the value of our stock on the date of issuance and the theoretical value of a stand-alone put option valued using a Black-Scholes put option model discounted by a present value factor that considers the credit spread between an estimated Company specific discount rate and the risk-free rate of return. Because the shares are required to be redeemed at the option of WTI, based solely on the passage of time, and provided WTI did not elect to otherwise sell or transfer the shares beforehand, the carrying value of the shares will accrete to their redemption value of $8.40 per share from the issuance date through September 11, 2029, the date the Redemption Option first becomes exercisable.
Previous report
We allocated the lender fees (including the fair value of the vested shares) and third-party debt financing costs between the Initial Loan and the remaining, undrawn Loan Commitments. The costs allocated to the Initial Loan are accounted for as a discount and will be amortized across the term of the Initial Loan using the effective interest method. The costs allocated to the remaining, undrawn Loan Commitments are accounted for as loan commitment assets, which are being amortized to interest expense using the straight-line method over the commitment periods, due to uncertainty about our intent to access the Loan Commitment. The unamortized portion of the loan commitment assets was $47 as of September 30, 2025 and is recorded within Other assets on the unaudited condensed consolidated balance sheets.
Previous report
We recognized $293 and $43 of interest expense related to the amortization of debt financing costs of the WTI Loan Facility and $95 and $136 of interest expense related to the amortization of the loan commitment assets during the three months ended September 30, 2025 and September 30, 2024, respectively.
Previous report
We recognized $773 and $43 of interest expense related to the amortization of debt financing costs of the WTI Loan Facility and $762 and $136 of interest expense related to the amortization of the loan commitment assets during the nine months ended September 30, 2025 and September 30, 2024, respectively.
Previous report
On September 11, 2024, we, as guarantor, and our wholly-owned subsidiary, OBCI, as borrower, entered into a Credit and Security Agreement (the “Credit Agreement”) with the financial institutions party thereto from time to time as lenders (collectively the “Lenders”) and ABL OPCO LLC, a Delaware limited liability company, in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).
Previous report
On September 30, 2025, there was $18,616 of outstanding borrowings, which is recorded as a current liability on the unaudited condensed consolidated balance sheets based on our intent and ability to repay the outstanding borrowings in the near term. The remaining borrowing base availability under the Credit Agreement was $725 as of September 30, 2025.
Previous report
On June 11, 2025, we entered into a First Amendment to Credit and Security Agreement (the “First Amendment”) with 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 First Amendment amends the Credit and Security Agreement, dated September 11, 2024, that was entered into by the Loan Parties, the Lenders and the Administrative Agent, to (among other things) (i) modify certain financial covenants ,including EBITDA covenants (these may be calculated differently from EBITDA as disclosed in Item 2 "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q), required to be maintained by us (ii) increase the amount of capital expenditures that may be incurred by the us during certain fiscal years, and (iii) expand the eligibility of certain accounts receivable that we can borrow against. Apart from the aforementioned changes, no modifications were made to other covenants, including the liquidity covenant as fully described in Part II, Item 8 “Financial Statements and Supplementary Data - Note 6 to the Consolidated Financial Statements - Debt and Other Financing Arrangements” in its 2024 Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2024.
Showing the first 40 of 47 passages. Open the source sections for the rest.
Reworded paragraphs (18)
Previous wording
We recognize revenue primarily from products and the associated mobile applications. Revenues are 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. Substantially all of our revenues were derived from product sales, with a growing minority portion of revenues being generated by our Owlet360 subscription service.
Current wording
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.
Previous wording
Cost of revenues 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.
Current wording
Cost of revenue consists of product costs, including contract manufacturing, shipping and handling, depreciation and amortization relating to tooling and manufacturing equipment and software, warranty replacement, fulfillment costs, warehousing, hosting and platform costs, and reserves for excess and obsolete inventory. Cost of revenue associated with Owlet360 mainly consists of app store distribution fees.
Previous wording
General and Administrative. General and administrative expenses consist primarily of salaries, benefits, stock-based compensation, and bonuses for finance and accounting, legal, human resources, operations, quality and administrative executives and employees; third-party legal, accounting, customer service, software, and other professional services; corporate travel and entertainment; depreciation and amortization of property and equipment, asset impairment charges, legal settlements, insurance loss recovery, and facilities rent.
Current wording
General and Administrative. General and administrative expenses consist primarily of salaries, benefits, stock-based compensation, and bonuses for finance and accounting, legal, human resources, operations, quality and administrative executives and employees; third-party legal, accounting, customer service, software, and other professional services; corporate travel and entertainment; depreciation and amortization of property and equipment, asset impairment charges, litigation settlement costs, insurance loss recovery, and facilities rent.
Previous wording
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 and platforms, including clinical testing.
Current wording
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.
Previous wording
Interest Income (Expense), Net. Interest income (expense), net consists of interest incurred on our outstanding borrowings and amortization of issuance costs. Interest income consists of interest earned on our money market account.
Current wording
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.
Previous wording
To supplement our unaudited 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.
Current wording
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.
Previous wording
Adjusted EBITDA is defined as net income (loss) adjusted for income tax provision, interest expense, net, depreciation and amortization, impairment of intangible assets, common stock warrant liability adjustment, stock-based compensation, transaction costs, insurance loss recovery related to certain legal matters, net of charges related to certain legal matters, and restructuring costs.
Current wording
Adjusted EBITDA is defined as net income (loss) adjusted for income tax provision, interest expense, net, depreciation and amortization, impairment of intangible assets, common stock warrant liability adjustment, stock-based compensation, and charges related to certain legal matters.
Previous wording
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 the Company’s 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):
Current wording
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):
Previous wording
We fund our operations primarily with proceeds from issuances of our convertible preferred stock, issuances of our common stock, borrowings under our loan facilities, issuances of convertible promissory notes, and sales of our products and services. As of September 30, 2025, we had cash and cash equivalents of $23,760.
Current wording
We fund our operations primarily with proceeds from issuances of our equity securities, borrowings under our loan facilities, and sales of our products and services. As of March 31, 2026, we had cash and cash equivalents of $35,459, and additional availability of $3,944 on our line of credit. We believe our existing cash and cash equivalent balances, cash flows from operations, and committed credit lines will be sufficient to meet our long-term working capital and capital expenditure needs for at least the next 12 months. The accompanying condensed consolidated financial statements have been prepared on a going concern basis and accordingly, do not include any adjustments relating to the recoverability and classification of asset carrying amounts, or the amount and classification of liabilities that might result should we be unable to continue as a going concern. There can be no assurance that we will generate sufficient future cash flows from operations due to potential factors, including but not limited to inflation, recession, or reduced demand for our products. If revenue decreases from current levels, we may be unable to further reduce costs, or such reductions may limit our ability to pursue strategic initiatives and grow revenue in the future. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other business initiatives, our planned sales and marketing activities, the timing of new product introductions, market acceptance of our products, and overall economic conditions. To the extent that current and anticipated sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in increased dilution to our stockholders. If we were to incur additional debt financing, it would result in increased debt service obligations and the instruments governing such debt could require additional operating and financing covenants that would restrict our operations.
Previous wording
Tariffs announced in 2025 have adversely impacted our cost of good sold and gross margins and may continue to affect cash flows if elevated tariff rates persist.
Current wording
Tariffs announced in 2025 have adversely impacted our cost of goods sold and gross margins and may continue to affect cash flows if elevated tariff rates persist. On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under IEEPA. This ruling could result in tariff relief and may allow for the recovery of amounts previously paid, which we believe could be material. We are currently evaluating the potential effects of this decision on our financial condition and liquidity. The process for recovering previously paid duties/tariffs remains subject to ongoing proceedings with the U.S. Court of International Trade and U.S. Customs and Border Protection. We are actively monitoring these developments and are taking steps to preserve our rights with respect to any potential refunds.
Previous wording
The WTI Loan Facility consists of two tranches. The first tranche of $10,000 was available at closing and through September 30, 2024, with $2,500 of the first tranche availability extendable until December 31, 2024 (the “First Tranche Commitment”). The second tranche of $5,000 (the “Second Tranche Commitment,” or together with the First Tranche Commitment, the “Loan Commitments”) per the initial Loan Facility Agreement would be available through August 15, 2025 and upon achievement of (a) at least $48,600 in revenue for the period that commenced October 1, 2024 and ending June 30, 2025 (the “Second Tranche Condition Period”), (b) total cash burn during the Second Tranche Condition Period not to exceed $600 for such period, (c) receipt by us of at least $6,000 of net proceeds from an equity financing during a period commencing on the closing date and ending on the second tranche borrowing date, and (d) receipt by WTI of the our then-current, board-approved operating and financing plan to WTI's satisfaction, as well as compliance with certain reporting conditions. In July 2025, WTI granted a 90-day extension, making the Second Tranche Commitment available through November 13, 2025. The terms of the Loan Facility Agreement were otherwise not modified in tandem with the extension. As of September 30, 2025, we were in compliance with all covenants under the WTI Loan Facility.
Current wording
As of March 31, 2026, we were in compliance with all covenants under the WTI Loan Facility.
Previous wording
The Credit Agreement provides for an asset-based revolving credit facility (the “ABL Line of Credit”) in a maximum principal amount of up to $15,000, which increased to $20,000 on September 11, 2025 (the “Revolving Commitment”). The ABL Line of Credit is collateralized by substantially all of our assets.
Current wording
We, as guarantor, and our wholly-owned subsidiary, OBCI, as borrower, maintain an asset-based revolving credit facility (the “ABL Line of Credit”) with a maximum principal amount of up to $20,000 (the “Revolving Commitment”). The ABL Line of Credit is collateralized by substantially all of our assets.
Previous wording
The ABL Line of Credit matures on September 10, 2027 (the “Maturity Date”). The Credit Agreement contains representations, warranties, covenants, and events of default customary for agreements of this type. As of September 30, 2025, we were in compliance with all covenants under the Credit Agreement.
Current wording
As of March 31, 2026, we were in compliance with all covenants under the Credit Agreement.
Previous wording
In 2024 and 2025, we financed a number of our insurance policies through short-term commercial premium finance agreements with First Insurance Funding totaling $1,064 to be paid within one year, accruing interest at a weighted average rate of 8.6%. As of September 30, 2025, the remaining principal balance on the combined financed insurance premiums was $596.
Current wording
In 2025, we renewed a number of our insurance policies and entered into several new short-term commercial premium finance agreements with premium finance companies totaling $739 to be paid within one year, accruing interest at a weighted average rate of 8.0%. As of March 31, 2026, the remaining principal balance on the combined financed insurance premiums was $224.
Previous wording
For the nine months ended September 30, 2025, net cash used in operating activities was $10,340 as compared to net cash used in operating activities of $14,215 in the prior year. The change in operating cash flows was primarily driven by an increase in accrual net loss adjusted for non-cash items (adjustments to reconcile net loss to net cash used in operating activities.)
Current wording
For the three months ended March 31, 2026, net cash used in operating activities was $5,049 as compared to net cash used in operating activities of $5,925 in the prior year. The positive change in operating cash flows was primarily driven by changes in assets and liabilities, particularly related to accounts receivable, inventory and accounts payable, as well as smaller common stock warrant liability adjustment compared to the prior year. These positive changes were partially offset by the $3,336 net loss recognized for the three months ended March 31, 2026, compared to the $3,025 net income recognized in the comparative prior year period.
Previous wording
For both the nine months ended September 30, 2025 and September 30, 2024, we used $454 and $587 respectively, to invest in various projects, primarily for the development and enhancement of our new subscription app.
Current wording
For both the three months ended March 31, 2026 and March 31, 2025, we used $415 and $110 respectively, to invest in various projects, primarily for the development and enhancement of our new subscription app.
Previous wording
For the nine months ended September 30, 2025 and 2024, net cash provided by financing activities was $14,223 and $20,127, respectively. The decrease is primarily driven by the fact that we received less from the net proceeds from short-term borrowings and proceeds from exercise of common stock warrants in the current period than the proceeds for the following in the prior period: net proceeds from issuance of common stock, preferred stock and warrants as well as proceeds from long-term borrowings and issuance of redeemable common stock, net of payments.
Current wording
For the three months ended March 31, 2026 and March 31, 2025, net cash provided by financing activities was $5,462 and $2,014, respectively. The increase is primarily driven by higher net proceeds from short-term borrowings in the current period compared to the prior period.
Previous wording
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. We are evaluating its impacts, including any potential impact in the period of enactment. See Note 1. Basis of Presentation, within the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report for additional information.
Current wording
The One Big Beautiful Bill Act of 2025 (the “OBBBA”) was signed into law on July 4, 2025. The OBBBA makes changes to the U.S. corporate income tax, including reinstating the option to claim 100% accelerated depreciation deductions on qualified property, with retroactive application beginning January 20, 2025, and immediate expensing of domestic research and development costs, with retroactive application beginning January 1, 2025. The Company determined that the OBBBA did not have a material impact on the unaudited condensed consolidated financial statements for the three months ended March 31, 2026. The Act includes multiple effective dates, with certain provisions effective in 2026 and 2027. The Company will continue to evaluate the impact of these provisions on our 2026 and subsequent financial statements.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Notwithstanding the financings obtained as described further in “--Liquidity and Capital Resources” above, our historical operating and cash flow results, as well as our September 30, 2025 cash balance in relation to our obligations are considerations which raise substantial doubt about our ability to continue as a going concern within one year after the date that the accompanying unaudited condensed consolidated financial statements are issued. 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.
Previous report — wording carried elsewhere
We have not generated sufficient cash flows from operations to satisfy our capital requirements. There can be no assurance that we will generate sufficient future cash flows from operations to fund our ongoing operations due to potential factors, including but not limited to inflation, recession, or reduced demand for our products. If revenues decrease from current levels, we may be unable to further reduce costs, or such reductions may limit our ability to pursue strategic initiatives and grow revenues in the future.