Owlet, Inc.

Notes to Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts)

Note 1. Basis of Presentation

As used in these financial statements, unless otherwise stated or the context otherwise requires: “we,” “us,” “our,” “Owlet,” the “Company,” and similar references refer to Owlet, Inc. and its subsidiaries. “Common stock” refers to the Class A common stock of Owlet, Inc.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or "GAAP") for interim financial information and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. The condensed consolidated balance sheet as of December 31, 2025, included herein, was derived from the audited consolidated financial statements as of that date, but does not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for the fair statement of the Company’s financial position, results of operations, and cash flows for the interim periods presented. All dollar amounts, except per share amounts, in the notes are presented in thousands, unless otherwise specified.

Certain prior year amounts have been reclassified to conform to the current period presentation.

Revenue Recognition

The Company generated substantially all of its revenue from the sale of its hardware products, primarily Dream Sock, Dream Sight, and Dream Duo. A growing minority portion of revenue is being generated from subscriptions to its Owlet360 service.

Revenue is recognized when control of goods and services are transferred to customers at the transaction price, an amount that reflects the consideration expected to be received by the Company in exchange for those goods and services. The transaction price is calculated as selling price less the Company’s estimate of variable consideration, including future returns, volume rebates, and sales incentives related to current period sales.

The Company applies the following five-step approach to recognizing revenue:

(1)Identify the contract with a customer

(2)Identify the performance obligations in the contract

(3)Determine the transaction price

(4)Allocate the transaction price to performance obligations in the contract

(5)Recognize revenue when or as a performance obligation is satisfied

Hardware Revenue

From the sale of hardware products, the Company enters into contracts that have multiple performance obligations. Product sales include two performance obligations. The first performance obligation is the delivery of hardware and embedded firmware essential to the functionality of the hardware. Embedded firmware allows the hardware to recognize inputs to the hardware and provide appropriate outputs. The second performance obligation is the implied right to connect the downloadable mobile application, provided at no additional cost to the customer, to the hardware, which enables users to view and access real-time data outputs. The implied right to receive future unspecified application upgrades, added features, firmware updates, and bug fixes, on a when-and-if available basis, are considered part of the embedded firmware, and connection to the downloadable mobile application's performance obligations.

The Company allocates the transaction price to each performance obligation based on a relative standalone selling price (“SSP”). The Company’s process for determining its SSP considers multiple factors, including the expected cost plus a margin method, and varies depending on the facts and circumstances of each performance obligation. Revenue allocated to the delivery of the hardware and embedded firmware essential to the functionality of the hardware represent substantially all of the arrangements consideration and reflect the Company’s best estimate of the selling price if it was sold regularly on a stand-alone basis. SSP for the mobile application is estimated using the expected cost plus a margin method based on fulfillment costs allocated over the expected device useful life, and is recognized ratably over the expected service period.

Revenue is recognized at the time the related performance obligation is satisfied by transferring control of the promised good or service to a customer. Revenue allocated to the hardware and embedded firmware are recognized at the time of product delivery, provided the other conditions for revenue recognition have been met. This generally occurs upon delivery of the product to a third-party carrier. Revenue allocated to the implied right to access the mobile application and the implied right to receive, on a when-and-if-available basis, added features and bug fixes, is recognized on a straight-line basis over the estimated usage period of the underlying hardware product. The usage period is estimated based on historical user activity and ranges from 8 months to 1 year, 8 months.

The Company records revenue net of sales tax and variable consideration such as discounts and customer returns. Payment terms are short-term in nature and, as a result, do not have any significant financing components. The Company records estimated reductions to revenue in the form of variable consideration for customer sales programs, returns, and incentive offerings including rebates, markdowns, promotions, and volume-based incentives.

Consideration payable to a customer, such as cooperative advertising and pricing promotions to retailers and distributors, is recorded as a reduction to revenue. Deferred revenue represents advance payments received from customers prior to performance by the Company. Sales taxes collected from customers which are remitted to governmental authorities are not included in revenue and are reflected as a liability in the accompanying unaudited condensed consolidated balance sheets.

Subscription Revenue

The Company’s Owlet360 premium subscription service provides access to enhanced features beyond the base functionality of the mobile application. The Company makes the Owlet360 subscription available through third-party digital distribution service providers, specifically the Apple App Store and Google Play Store. Customers who purchase subscriptions pay through the respective app stores, which act as the merchant of record and payment processors for these transactions. The Company evaluates these arrangements to determine whether revenue should be reported gross or net of fees retained by the payment processors. The Company has determined it is the principal in the transaction with the end user, as it controls, hosts, and delivers the subscription service; retains primary responsibility for service maintenance, availability, and customer support; and has discretion in establishing subscription pricing. Although the digital platforms serve as the merchant of record and process customer payments, the Company controls the subscription service and the customer's continued access to it. Accordingly, the Company records subscription revenue on a gross basis and records fees paid to third-party payment processors as cost of revenue.

The premium subscription service represents a single performance obligation to provide customers with continuous access to advanced sleep analytics, historical health data storage, and personalized insights over the subscription term. Revenue is recognized ratably on a daily basis over the subscription period, commencing upon a customer's conversion to a paid plan following any free trial period. Subscription fees received in advance of the service period are recorded as deferred revenue and recognized as the performance obligation is satisfied.

The Company offers monthly and annual subscription plans, including introductory pricing for new subscribers. Introductory discounts are treated as price concessions that reduce the transaction price at the point of sale rather than as separate performance obligations. Refunds, which are administered by the digital platforms, are recorded as a reduction to revenue in the period processed and have historically been immaterial.

Cost of Revenue

Hardware cost of revenue consists of product costs, including contract manufacturing, shipping and handling, depreciation and amortization relating to tooling and manufacturing equipment and software, warranty replacement, fulfillment costs, warehousing, hosting and platform costs, and reserves for excess and obsolete inventory.

Subscription cost of revenue primarily consists of distribution fees paid to digital application platforms and the amortization of capitalized internal-use software costs associated with the Owlet360 service.

Risks and Uncertainties

In accordance with ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements included in this quarterly report on Form 10-Q are issued.

The Company has historically experienced recurring operating losses, with the exception of the third quarter of 2025, and has generated negative cash flows from operations. The Company had an accumulated deficit of $311,071 as of June 30, 2026, and during the six months ended June 30, 2026 and 2025, the Company had negative cash flows from operations of $5,141 and $8,170, respectively. As of June 30, 2026, the Company had $30,948 of cash on hand.

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

•As described in Note 4, Debt and Other Financing Arrangements, on June 26, 2026, the Company entered into a new debt financing arrangement with Wells Fargo Bank, National Association (“Wells Fargo”) for an asset-based revolving credit facility (the “Revolving Facility”) in a maximum principal amount of up to $25,000. The Revolving Commitment may be increased by agreement of the parties from up to $25,000 to up to $35,000 (in minimum increments of at least $5,000). On June 26, 2026, in connection with its entry into the Revolving Facility, the Company repaid all outstanding borrowings under the WTI Loan Facility using proceeds from borrowings under the Revolving Facility, and terminated both the WTI Loan Facility and ABL Line of Credit, resulting in extinguishment of the associated debt and other debt-related balance sheet amounts. As of June 30, 2026, the Company has borrowings of $17,063 under the Revolving Facility.

•As described in Note 7 Common Stock Issuance, Redeemable Common Stock, Common Stock Warrants, and Convertible Preferred Stock, in October 2025 the Company completed an offering for the sale of 4,825,400 shares of its common stock at an offering price to the public of $7.15 per share. From this offering, the Company received net proceeds of $32,109 after deducting underwriting discounts and commissions.

•As described further in Note 7, Common Stock Issuance, Redeemable Common Stock, Common Stock Warrants, and Convertible Preferred Stock, in September 2024, the Company issued 3,135,136 shares of its common stock and received net proceeds of $10,590 and in February 2024, the Company consummated a sale of preferred stock and warrants to purchase its common stock for a gross purchase price of $9,250.

The Company believes its existing cash and cash equivalent balances, cash flows from operations, and borrowing capacity under the Revolving Facility will be sufficient to meet its working capital and capital expenditure needs for at least the next 12 months from the date of issuance of the June 30, 2026 unaudited condensed consolidated financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis and accordingly, do not include any adjustments relating to the recoverability and classification of asset carrying amounts, or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

There can be no assurance that the Company will generate sufficient future cash flows from operations due to potential factors, including but not limited to inflation, recession, or reduced demand for the Company’s products. If revenue decreases from current levels, the Company may be unable to further reduce costs, or such reductions may limit its ability to pursue strategic initiatives and grow revenue in the future.

The Company maintains its cash in bank deposit accounts which, at times, exceed federally insured limits. As of June 30, 2026, substantially all of the Company’s cash was held with Silicon Valley Bank and Citibank, and exceeded federally insured limits.

Although the Company’s sales and accounts receivable are derived from sales contracts with a large number of customers, its top several customers account for a significant amount of its total sales and make up a correspondingly large portion of its accounts receivable. During the three months ended June 30, 2026, there were two customers who individually represented 10% or more of total net revenue, accounting for 49% and 11% of total net revenue, with no other customers exceeding 10% of total net revenue during that period. These same customers accounted for 61% and 13% of the accounts receivable, net balance, respectively, as of June 30, 2026. During the six months ended June 30, 2026, the same two customers individually exceeded 10% of total net revenue during the period at 41% and 11% of total net revenue. During the three and six months ended June 30, 2025, one customer accounted for 64% and 51% of net revenues respectively, with no other customers exceeding 10% of revenues during those periods.

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

Revisions to Previously Issued Financial Statements and Financial Information

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

The Company assessed the materiality of the errors on prior period interim and annual consolidated financial statements in accordance with the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99, “Materiality,” and No. 108, codified in ASC 250, Accounting Changes and Error Corrections (“ASC 250”). Based on this assessment, in consideration of both quantitative and qualitative factors, the Company determined that the related impacts were not material, individually or in the aggregate, to any previously issued interim or annual financial statements. However, if the corrections were recorded in the three months ended June 30, 2026, they would be material to that period. As such, the Company revised the previously issued consolidated financial statements for the three-month period ended March 31, 2026, for the quarterly and year-to-date periods for 2025, and for the years ended December 31, 2025 and 2024. In conjunction with the revision, the Company also corrected certain other errors that were previously identified and disclosed and concluded to be immaterial, individually and in the aggregate, to the Company’s consolidated financial statements as of and for the relevant periods. The applicable notes to the accompanying financial statements have also been corrected to reflect the impact of the revisions of the previously filed consolidated interim financial statements and consolidated annual financial statements.

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

Recently Adopted Accounting Pronouncements

In July 2025, the FASB issued ASU 2025-05, which amended the guidance in ASC 326 to simplify the estimation of credit losses on accounts receivable and contract assets from revenue transactions. The amended guidance allows companies to elect a practical expedient to assume that conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when estimating the expected credit losses of the asset. This update is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods. The Company adopted this standard prospectively and the adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Guidance

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. The standard is intended to require more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impact this standard will have on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amended guidance modernizes the accounting for costs related to internal-use software to more closely align with current software development methods. The guidance removes references to project stages and clarifies when we are required to start capitalizing eligible costs. The new guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is currently assessing the impact this amended guidance will have on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.

Recent Tax Legislation

The One Big Beautiful Bill Act of 2025 (the “OBBBA”) was signed into law on July 4, 2025. The OBBBA makes changes to the U.S. corporate income tax, including reinstating the option to claim 100% accelerated depreciation deductions on qualified property, with retroactive application beginning January 20, 2025, and immediate expensing of domestic research and development costs, with retroactive application beginning January 1, 2025. The Company determined that the OBBBA did not have a material impact on the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026. The Act includes multiple effective dates, with certain provisions effective in 2026 and 2027. The Company will continue to evaluate the impact of these provisions on our 2026 and subsequent financial statements.

Note 2. Certain Balance Sheet Accounts

Restricted Cash

The Company’s restricted cash includes cash held in escrow accounts related to litigation settlements. Under the terms of the Butala action settlement agreement (see Note 5), the Company deposited funds into a dedicated escrow account pending final court approval of the settlement and the completion of the claims administration process. The Company's restricted cash also includes cash collateral to secure its current credit card borrowings as well as a good faith deposit in connection with the Revolving Facility. Cash as reported on the unaudited condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted cash as shown on the unaudited condensed consolidated balance sheets and consists of the following:

Allowance for Credit and Other Losses

The Company records its accounts receivable at sales value and maintains an allowance for its current estimate of expected credit losses from customers. Provisions for expected credit losses are estimated based on historical experience, assessment of specific risk, review of outstanding invoices, and forecasts about the future. The Company establishes specific reserves for customers in an adverse financial condition and adjusts for its expectations of changes in conditions that may impact the collectability of outstanding receivables.

Changes in the Company's allowance for credit and other losses were as follows:

Inventory

Details of inventory were as follows:

Prepaid expenses and other current assets

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

Property and Equipment, net

Property and equipment consisted of the following:

Depreciation and amortization expense on property and equipment was $48 and $21 for the three months ended June 30, 2026 and 2025, respectively. For the three months ended June 30, 2026 and 2025, the Company allocated $17 and $15, respectively, of depreciation and amortization expense related to tooling and manufacturing equipment within cost of revenue on the unaudited condensed consolidated statements of operations and comprehensive income (loss). The remaining depreciation and amortization expense related to property and equipment was recorded within general and administrative expenses.

Depreciation and amortization expense on property and equipment was $89 and $54 for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026 and 2025, the Company allocated $28 and $44, respectively, of depreciation and amortization expense related to tooling and manufacturing equipment within cost of revenue on the unaudited condensed consolidated statements of operations and comprehensive income (loss). The remaining depreciation and amortization expense related to property and equipment was recorded within general and administrative expenses.

Intangible Assets, net

The carrying amounts of intangible assets consisted of the following:

Amortization expense of intangible assets was $163 and $88 for the three months ended June 30, 2026 and 2025, respectively. For the three months ended June 30, 2026 and 2025, the Company recorded $142 and $71, respectively, of amortization expense related to internally developed software within cost of revenue on the unaudited condensed consolidated statements of operations and comprehensive income (loss). The remaining amortization expense related to trademarks and patents was recorded within general and administrative expenses.

Amortization expense of intangible assets was $307 and $174 for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026 and 2025, the Company recorded $262 and $136, respectively, of amortization expense related to internally developed software within cost of revenue on the unaudited condensed consolidated statements of operations and comprehensive income (loss). The remaining amortization expense related to trademarks and patents was recorded within general and administrative expenses.

As of June 30, 2026, the estimated future amortization expenses and reconciliation to total intangible assets consisted of the following:

Accrued and Other Expenses

Accrued and other expenses consisted of the following:

Changes in accrued warranty were as follows:

Note 3. Deferred Revenue

Deferred revenue relates to performance obligations for which payments are received from customers prior to the satisfaction of the Company’s obligations to its customers. Deferred revenue primarily consists of amounts allocated to the mobile application, unspecified upgrade rights, added features, bug fixes, content, and subscription services and are recognized over the service period of the performance obligations, which ranges from 1 to 20 months.

The Company recognized $1,127 and $570 of revenue during the three months ended June 30, 2026 and 2025, respectively, that was included in the deferred revenue balance at the beginning of the respective period.

The Company recognized $1,612 and $932 of revenue during the six months ended June 30, 2026 and 2025, respectively, that was included in the deferred revenue balance at the beginning of the respective period. Revenue for the six months ended June 30, 2025 included a reduction of revenue of $451 relating to the correction of immaterial misstatements from previous periods.

Note 4. Debt and Other Financing Arrangements

The Company’s indebtedness consisted of the following:

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

Wells Fargo Line of Credit

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

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

The Credit Agreement provides for an asset-based revolving credit facility (the “Revolving Facility”) in a maximum principal amount of up to $25,000 (the “Revolving Commitment”). The Revolving Commitment may be expanded by agreement of the parties from up to $25,000 to up to $35,000 (in minimum increments of at least $5,000). Loans and other obligations of the Borrower bear interest at a rate per annum equal to the daily Secured Overnight Financing Rate plus a margin of 2.00% or 2.25% depending on the Borrower’s monthly average excess availability under the Revolving Facility. The weighted average interest rate on the outstanding borrowings under the Revolving Facility was 5.87% for the period from June 26, 2026 through June 30, 2026. The Revolving Facility matures in June 2029.

On June 30, 2026, there were $17,063 of outstanding borrowings under the Revolving Facility, which are recorded as a current liability on the unaudited condensed consolidated balance sheet based on the Company's intent and ability to repay the outstanding borrowings in the near term. The outstanding borrowings as of June 30, 2026 were repaid to Wells Fargo in July 2026. The remaining borrowing base availability under the Revolving Facility was $7,531 as of June 30, 2026.

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

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

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

WTI Loan Facility

On September 11, 2024, (the "Effective Date"), OBCI, as the borrower, entered into a Loan Facility Agreement (the “Loan Facility Agreement”) with WTI Fund X, Inc. and WTI Fund XI, Inc. (collectively, “WTI”) for a term loan facility of up to $15,000 (the “WTI

Loan Facility”). The Company initiated its first drawdown under the WTI Loan Facility of $7,500 (the “Initial Loan”) shortly after finalizing the Loan Facility Agreement in September 2024.

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

Interest on the outstanding principal amounts under the WTI Loan Facility accrued at a rate per annum equal to the sum of the prime rate plus 3.5%, with a floor of 12%. The interest rate on the outstanding principal amounts under the WTI Loan Facility was 12% for the period from April 1, 2026 through June 26, 2026. Loans under the WTI Loan Facility also accrued 2.5% in payment-in-kind interest ("PIK interest") compounded monthly. All outstanding principal, accrued coupon interest, and accrued PIK interest were repaid in full upon extinguishment on June 26, 2026.

As partial consideration for the availability and funding of the WTI Loan Facility, the Company and WTI Fund X, LLC (“Fund X”) and WTI Fund XI, LLC (“Fund XI”, and together with Fund X, the “WTI Funds”) entered into a Stock Issuance Agreement (the “WTI Stock Issuance Agreement”), dated as of the Effective Date. Pursuant to the WTI Stock Issuance Agreement, the Company issued to the WTI Funds an aggregate of 750,000 shares of redeemable common stock on the Effective Date, of which 187,500 shares of the redeemable common stock have been forfeited and 310,000 shares of redeemable common stock were sold by WTI to an unrelated third-party. As redemption rights are not transferable, $2,439 of the mezzanine equity balance was reclassified to permanent equity upon transfer of the common shares outside of the WTI funds during the three months ended March 31, 2026. There were 252,500 redeemable common shares remaining pursuant to the Redemption Option at June 30, 2026.

The shares issued to WTI pursuant to the WTI Stock Issuance Agreement contain an embedded redemption option (the “Redemption Option”) such that WTI may elect to force the Company to redeem the shares that are no longer subject to forfeiture for a price of $8.40 per share. The Redemption Option may be exercised in whole or in part, at any time, from time to time, during the period commencing on the first trading day following the fifth anniversary of the Effective Date and continuing through the date which is 10 years after the Effective Date, subject to certain acceleration provisions set forth in the WTI Stock Issuance Agreement. Because the shares are redeemable at the option of the WTI Funds, the shares are recorded in mezzanine equity on the unaudited condensed consolidated balance sheets. The redeemable common shares were initially recorded at their fair value of $7.66 per share, which was an aggregate value of $4,308. Because the shares are required to be redeemed at the option of WTI, based solely on the passage of time, and provided WTI did not elect to otherwise sell or transfer the shares beforehand, the carrying value of the shares will accrete to their redemption value of $8.40 per share from the issuance date through September 11, 2029, the date the Redemption Option first becomes exercisable.

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

The Company recognized $261 and $258 of interest expense related to the amortization of debt financing costs of the WTI Loan Facility and $0 and $282 of interest expense related to the amortization of the loan commitment assets during the three months ended June 30, 2026 and 2025, respectively.

The Company recognized $555 and $480 of interest expense related to the amortization of debt financing costs of the WTI Loan Facility and $0 and $667 of interest expense related to the amortization of the loan commitment assets during the six months ended June 30, 2026 and 2025, respectively.

ABL Line of Credit

On September 11, 2024, the Company, as guarantor, and its wholly-owned subsidiary, Owlet Baby Care, Inc. ("OBCI"), as borrower, entered into a credit and security agreement (the "ABL Credit Agreement") with the financial institutions party thereto from time to time as lenders (collectively the “Lenders”) and ABL OPCO LLC, a Delaware limited liability company, in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

The ABL Credit Agreement provided for an asset-based revolving credit line (the "ABL Line of Credit") with a maximum principal amount of up to $20,000. The ABL Line of Credit was collateralized by substantially all of the Company's assets. Loans and other obligations under the ABL Credit Agreement bore interest at a rate per annum equal to the 1-month Secured Overnight Financing Rate (subject to a floor of 3.5%) plus a margin, which varied between 7.5% and 8.5% depending on the Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”), provided that the interest rate shall not exceed the maximum rate permitted under applicable law.

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

The Company recognized $74 and $59 of interest expense related to the amortization of the loan commitment assets during the three months ended June 30, 2026 and 2025, respectively.

The Company recognized $151 and $112 of interest expense related to the amortization of the loan commitment assets during the six months ended June 30, 2026 and 2025, respectively.

Financed Insurance Premiums

In 2025, the Company renewed a number of its insurance policies and entered into several new short-term commercial premium finance agreements with premium finance companies to be paid within one year. As of June 30, 2026, there wasno remaining balance outstanding related to these agreements.

Note 5. Commitments and Contingencies

Purchase and Other Obligations

The Company entered into a services and license agreement for cloud platform services in June 2024. The Company has a purchase obligation of $6,739 to be paid over a 48-month period beginning in June 2024 and $1,239 remains to be paid at June 30, 2026.

Tariffs

In February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA). As a result of this ruling, the Company was eligible for a refund of tariffs previously paid on imported goods. During the three months ended June 30, 2026, the Company received $3,960 in IEEPA tariff refunds. Of this amount, $3,526 was recorded as a reduction to cost of goods sold for inventory sold, $205 was recorded as a reduction in the carrying value of inventory, and $229 was recorded as a component of other income (expense), net on the unaudited condensed consolidated statement of operations and comprehensive income (loss). The Company will continue to monitor developments in this area and their potential impact on the results of operations.

Litigation

The Company is involved in legal proceedings from time to time arising in the normal course of business. While any outcome related to such legal proceedings cannot be predicted with certainty, other than the matters discussed below, the Company believes that the outcome of these proceedings will not have a material impact on the Company’s financial position, results of operations, or liquidity.

In November 2021, two putative class action complaints were filed against the Company in the U.S. District Court for the Central District of California, captioned Butala v. Owlet, Inc., Case No. 2:21-cv-09016-FLA-SSC, and Cherian v. Owlet, Inc., Case No. 2:21-cv-09293. Both complaints alleged violations of the Securities Exchange Act of 1934 (“Exchange Act”) against the Company and certain of its officers and directors on behalf of a putative class of investors who: (a) purchased the Company’s common stock between March 31, 2021 and October 4, 2021 (“Section 10(b) Claims”); or (b) held common stock in Sandbridge Acquisition Corporation (“SBG”) as of June 1, 2021, and were eligible to vote at SBG's special meeting held on July 14, 2021 (“Section 14(a) Claims”).

On September 8, 2023, the Court ruled that while the Butala and Cherian cases were consolidated, there would betwo distinct and separate classes to represent the Section 10(b) Claims and Section 14(a) Claims, respectively, and appointed lead plaintiffs and lead counsel for each class. Following motions to dismiss and reconsiderations rulings, the parties reached agreements in principle to settle both the Section 10(b) Claims and the Section 14(a) Claims. The Section 10(b) Claims were resolved for $3,500 and the Section 14(a) Claims were resolved for $1,750. In accordance with ASC 450, the Company recognized $5,250 of general and administrative expense on the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2024. In October 2025, the Company caused $3,500 to be paid into escrow for the settlement of the Section 10(b) Claims and, with the directors' and officers' insurance provider, caused $1,750 to be paid into escrow for the settlement of the Section 14(a) Claims. On August 3, 2026, the Court entered final orders approving the settlement amounts and the plan of allocation for the settlements of the Section 10(b) Claims and the Section 14(a) Claims as well as final orders of dismissal for each, fully resolving both actions.

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

The parties reached a settlement in the derivative action under which the Company agreed to adopt, implement, and maintain certain corporate governance, oversight, and internal controls reforms, and agreed not to oppose an application for $675 in attorneys’ fees and expenses. In accordance with ASC 450, the Company recorded $675 of general and administrative expense on the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2025. On August 3, 2026, the Court entered an order granting final approval of the settlement, approving the $675 fee and expense amount, entering final judgment, and dismissing the action with prejudice.

Indemnification

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless, and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company currently has directors’ and officers’ insurance coverage that may reduce its exposure and enables the Company to recover a portion of any future amounts paid.

Note 6. Stock-based Compensation

The Company has various stock compensation plans, which are more fully described in Part II, Item 8 “Financial Statements and Supplementary Data - Note 8 to the Consolidated Financial Statements - Stock-based Compensation” in its 2025 Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2025.

Stock-based Compensation Expense

Total stock-based compensation was recognized as follows:

The Company capitalized stock-based compensation attributable to internally developed software of $62 and $0 for the three months ended June 30, 2026, and 2025.

The Company capitalized stock-based compensation attributable to internally developed software of $114 and $27 for the six months ended June 30, 2026, and 2025.

As of June 30, 2026, the Company had $7,572 of unrecognized stock-based compensation costs related to unvested RSUs that will be recognized over a weighted-average period of 1.5 years.

Equity Incentive Plan

Under the 2021 Incentive Award Plan, the Company has the ability to grant options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance stock units (“PSUs”), dividend equivalents, or other stock or cash-based awards to employees, directors, or consultants. Option awards are generally granted with an exercise price equal to the fair value of the Company’s common stock at the date of grant. Options and PSU awards generally vest over a period offour years. RSUs are generally subject to afour year vesting term with 25% vesting afterone year and quarterly thereafter, or on atwo year vesting term with 50% afterone year and the remaining after the second year, or aone year vesting term with 100% after one year, depending on grant reason. RSU grants to directors typically vest at the earlier ofone year from the date of grant or the next annual shareholder meeting and, in certain circumstances, vest immediately. RSAs generally vest over less thanone year.

RSU activity was as follows:

During the three months ended June 30, 2026,208,334 PSUs vested and the Company recognized $788 of stock-based compensation cost related to PSUs. During the six months ended June 30, 2026,270,833 PSUs vested and the Company recognized $1,216 of stock-based compensation expense related to PSUs. As of June 30, 2026,104,165 unvested PSUs were outstanding with a weighted-average grant date fair value of $11.96. Related to these unvested PSUs, there was $892 of unrecognized stock-based compensation costs that as of June 30, 2026 was estimated to be recognized over a weighted-average period of 1.76 years.

In connection with Jonathan Harris' separation from the Company in April 2026, the Company accelerated vesting on his outstanding 196,430 RSUs and 208,334 PSUs that would have otherwise been forfeited, and recognized $349 and $643 of stock-based compensation expense, respectively, during the three months ended June 30, 2026.

Note 7. Common Stock Issuance, Redeemable Common Stock, Common Stock Warrants, and Convertible Preferred Stock

October 2025 Offering

On October 23, 2025, the Company completed an underwritten public offering in which it issued and sold 4,196,000 shares of its common stock at a price of $7.15 per share. Subsequently, the underwriters exercised their over-allotment option for an additional 629,400 shares, which settled after the initial closing and increased the total shares issued in the offering to 4,825,400. From this offering, the Company received net proceeds of $32,109 after deducting underwriting discounts and commissions.

The offering expenses with third parties were $639, of which $0 in issuance costs were unpaid as of June 30, 2026. The issuance costs associated with the October 2025 Offering were recorded as a reduction to additional paid-in capital on the unaudited condensed consolidated balance sheets.

September 2024 Offering

On September 11, 2024, the Company completed an underwritten public offering in which it issued and sold 3,135,136 shares of its common stock at a price of $3.70 per share. The net proceeds received by the Company were $10,590 after deducting underwriting discounts and commissions.

The Company also issued, as a portion of the underwriting compensation payable to the underwriter, a warrant to purchase up to 125,405 shares of common stock (which was subsequently transferred to certain affiliates of the underwriter, the “Titan Warrants”). The Titan Warrants are accounted as a nonemployee stock-based award as it represents compensation for underwriter services. The compensation cost associated with the Titan Warrants was $382, and was recorded as a direct and incremental issuance cost of the associated common stock offering that was earned upon the closing and issuance of the common stock. The Titan Warrants are classified as equity and included within additional paid-in capital on the unaudited condensed consolidated balance sheets.

The Titan Warrants became exercisable on March 13, 2025 at an exercise price of $4.63 and have a term offive years from such initial exercise date. As of June 30, 2026,30,097 of the Titan Warrants have been exercised.

Redeemable Common Stock

As discussed in Note 4, in September 2024 as partial consideration for the availability and funding of the WTI Loan Facility, the Company issued to the WTI Funds an aggregate of 750,000 shares of common stock. The Company also granted the WTI Funds the Redemption Option discussed in Note 4. The vested shares are recorded in mezzanine equity on the unaudited condensed consolidated balance sheets and are being accreted to the redemption value at the date the redemption feature first becomes exercisable.62,500 unvested shares of redeemable common stock were forfeited on March 31, 2025, and 125,000 unvested shares of redeemable common stock were forfeited on November 13, 2025.

During the three months ended March 31, 2026, WTI elected to sell to an unrelated third-party 310,000 shares of redeemable common stock. There were 252,500 redeemable common shares remaining pursuant to the Redemption Option at June 30, 2026.

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

August 2024 Exchange

On August 20, 2024, holders of the Series A convertible preferred stock (“Series A Preferred Stock”) of the Company elected to convert an aggregate of 15,721 shares of Series A Preferred Stock in exchange for an aggregate of 2,291,686 shares of the Company’s common stock, all as in accordance with the terms of the Certificate of Designation relating to the Series A Preferred Stock. As of June 30, 2026, the redemption value for the remaining shares of Series A convertible preferred stock is $11,479.

February 2024 Offering

On February 25, 2024, the Company entered into a private placement investment agreement with certain investors, pursuant to which the Company issued and sold to the investors (i) an aggregate of 9,250 shares of the Company’s Series B convertible preferred stock, par value $0.0001 per share and (ii) warrants to purchase an aggregate of 1,799,021 shares of the Company's common stock, par value $0.0001 per share (the “Series B Warrants”), for an aggregate gross purchase price of $9,250.

As of June 30, 2026, the redemption value for Series B convertible preferred stock is $9,250. None of the Series B convertible preferred stock had been converted as of June 30, 2026.

The Series B convertible stock is accreting to its redemption value, starting from the issuance date to the date at which the shares become redeemable on March 1, 2029. Accretion was recorded as a deemed dividend. There areno outstanding Series B Warrants as of June 30, 2026, as they have all been exchanged for newly issued shares of the Company's common stock, see Exchange Agreement - Series A and Series B Warrants below.

February 2023 Offering

On February 17, 2023 the Company entered into private placement investment agreements with certain investors, pursuant to which the Company issued and sold to the investors (i) an aggregate of 30,000 shares of the Company’s Series A convertible preferred stock, par value $0.0001 per share and (ii) warrants to purchase an aggregate of 7,871,712 shares of the Company’s common stock (“Series A Warrants”) for an aggregate purchase price of $30,000.

Each of the Series A Warrants sold in the private placement offering is exercisable for one share of common stock at an exercise price of $4.66 per share, is immediately exercisable, and will expire on February 17, 2028. As the Series A Warrants could require cash settlement in certain scenarios, the warrants were classified as liabilities upon issuance and were initially recorded at an aggregate estimated fair value of $26,133. The total proceeds from the offering were first allocated to the liability classified warrants, based on their fair values, with the residual $3,867 allocated to the Series A convertible preferred stock.

The Series A convertible stock is accreting to its redemption value, starting from the issuance date to the date at which the shares become redeemable on February 17, 2028. Accretion will be recorded as a deemed dividend. There are 265,597 outstanding Series A Warrants as of June 30, 2026, as the majority of the previously outstanding Series A Warrants have been exchanged for newly issued shares of the Company's common stock, See Exchange Agreement - Series A and Series B Warrants below.

SBG Common Stock Warrants

As a result of the merger completed with SBG on July 15, 2021 (the “Merger”), the Company continues to record liabilities for warrants issued by SBG prior to the Merger.

Pursuant to the SBG initial public offering, SBG sold warrants to purchase an aggregate of 821,428 shares of the Company’s common stock at a price of $161.00 per share (“SBG Public Warrants”). Following the closing of the Initial Public Offering on September 17, 2020, the Company completed the sale of warrants to purchase an aggregate of 471,428 shares of the Company’s common stock at a price of $161.00 per share in a private placement to Sandbridge Acquisition Holdings LLC (the “SBG Private Placement Warrants”). Together, the SBG Public Warrants and SBG Private Placement Warrants are referred to as the “SBG Common Stock Warrants.” The SBG Public Warrants became exercisable 12 months from the closing of the Initial Public Offering. The SBG Common Stock Warrants will expire five years after the completion of the Merger or earlier upon redemption or liquidation. None of the SBG Common Stock Warrants have been exercised as of June 30, 2026.

Subsequently, the SBG Common Stock Warrants that were recorded at a fair value of $0 as of June 30, 2026, expired unexercised on July 15, 2026, five years after the completion of the Merger. The expiration of these warrants did not have a material impact on the Company's consolidated financial statements.

SVB Warrants

In March 2023, the Company granted Silicon Valley Bank, now a division of First Citizens Bank and Trust Company (“SVB”) a warrant to purchase 10,714 shares of the Company’s common stock at a price of $5.32 per share, expiring on March 27, 2035 (the “SVB Warrants”) in connection with the first amendment to the Third Amended and Restated Loan and Security Agreement (as amended) between the Company and SVB (as amended, the “LSA”). On September 11, 2024, the LSA was terminated with no obligations outstanding thereunder. The SVB Warrants, which were valued at $43, are classified as equity and included within additional paid-in capital on the unaudited condensed consolidated balance sheets. None of the SVB Warrants have been exercised as of June 30, 2026.

Common Stock Warrants

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

Exchange Agreement - Series A and Series B Warrants

As of March 31, 2025,7,871,712 Series A and 1,799,021 Series B Warrants were outstanding and were adjusted to fair value during the three months ended March 31, 2025. On August 7, 2025, the Company and certain holders (the “Holders”) of the Company’s Series A Warrants and Series B Warrants entered into an Exchange Agreement, in which the Holders agreed to exchange with the Company their Series A Warrants relating to an aggregate of 7,215,737 shares of common stock and, if applicable, their Series B Warrants relating to an aggregate of 1,799,021 shares of common stock, for an aggregate of 5,426,429 newly issued shares (collectively, the “Exchange Shares”) of common stock (collectively, the “Exchanges”). On October 10, 2025 the Company consummated the Exchange Agreement and the issuance of the Exchange Shares. During the year, the Company made mark to market adjustments to adjust the Series A and Series B warrants subject to the exchange to their fair value through the modification date on August 7, 2025. On the modification date, the fair value of the warrants were adjusted to reflect the fair value of the Exchange Shares, and were subsequently marked to their fair value up to the exchange date. This resulted in a year-to-date fair value adjustment of $23,278 for the year ended December 31, 2025 within common stock warrant liability adjustment on the consolidated statement of operations and comprehensive income (loss). Upon completing the Exchange, the Company recorded a decrease in the common stock warrant liabilities of $46,884, and issued 5,426,429 shares of common stock at a fair value of $46,884.

Apart from the aggregate 4,412,930 common shares issued to Series A Warrant holders as part of the Exchange Agreement, as of June 30, 2026 there were 265,597 Series A Warrants that were not subject to the terms of the Exchange Agreement and, as of June 30, 2026, represented 265,597 shares of issuable common stock according to the original terms of the Series A Warrants. Refer to Note 8, Fair Value Measurements, for further discussion on fair value considerations.

Earnout Shares

Following the Merger,200,536, shares of common stock held by certain former equity holders of SBG are subject to vesting and forfeiture conditions (the "Earnout Shares"). Of the 200,536 earnout shares,100,268 shares will vest at such time as a $175.00 stock price level is achieved and 100,268 will vest at such time as a $210.00 stock price level is achieved, in each case, on or before the fifth anniversary of the Closing of the Merger. The earnout shares are classified as equity. As the vesting event has not yet been achieved, these shares of Owlet common stock, which are issued and outstanding, are treated as contingently recallable and have been excluded from the denominator for the purposes of calculating basic and diluted net loss per share. See Note 9 for further discussion on the calculation of basic and diluted net loss per share.

Subsequently, as neither the $175.00 nor the $210.00 stock price level was achieved on or before July 15, 2026, the fifth anniversary of the Closing of the Merger, all 200,536 Earnout Shares were forfeited and canceled for no consideration, with no impact to the Company's consolidated financial statements.

Note 8. Fair Value Measurements

The Company’s assets and liabilities measured and reported in the financial statements at fair value on a recurring basis were as follows:

Money market funds are included within Level 1 of the fair value hierarchy because they are valued using quoted market prices.

The SBG Public Warrants and SBG Private Placement Warrants as of June 30, 2026 are presented as Level 3 measurements, relying on unobservable inputs reflecting the Company’s own assumptions. Level 3 measurements, which are not based on quoted prices in active markets, introduce a higher degree of subjectivity and may be more sensitive to fluctuations in stock price, volatility rates, and U.S. Treasury Bond rates.

The Company measured the fair value of both the SBG Public Warrants and the SBG Private Placement Warrants as of June 30, 2026 and December 31, 2025 using the Black-Scholes option pricing model with the following assumptions:

The Series A Warrants presented as Level 3 measurements rely on unobservable inputs reflecting the Company’s own assumptions.

The Company measured the fair value of the Series A Warrants as of June 30, 2026 and December 31, 2025, using the Black-Scholes option pricing model with the following assumptions:

The following table presents a reconciliation of the Company’s SBG Public Warrants, SBG Private Placement Warrants, and Series A Warrants (together, the “Level 3 Warrants”) measured at fair value on a recurring basis as of June 30, 2026:

There were no transfers between Level 1 and Level 2 in the periods reported. The SBG Public Warrants and SBG Private Placement Warrants were transferred into Level 3 in 2023.

Equity-Classified Warrants

The fair value of the Titan Warrants on September 11, 2024 was $382. The Company measured the fair value of the Titan Warrants at issuance on September 11, 2024, using the Black-Scholes option pricing model with the following assumptions:

Mezzanine-Classified Redeemable Common Stock

The vested shares issued to WTI are contingently redeemable at the option of the holder during the put period and are recorded in mezzanine equity on the unaudited condensed consolidated balance sheets. The vested redeemable common shares were recorded at their fair value of $7.66 per share, which was an aggregate value of $4,308. The value of the redeemable common shares was determined using a combination of the value of the Company's stock on the date of issuance and the theoretical value of a stand-alone put option valued using a Black-Scholes put option model discounted by a present value factor that considers the credit spread between an estimated Company specific discount rate and the risk-free rate of return. The valuation model used the following assumptions:

Note 9. Net Loss Per Share

Basic and diluted net loss per share of common stock and redeemable common stock is presented in conformity with the two-class method required for participating securities. Under the two-class method, net loss is allocated to each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires net income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Losses are shared pro rata between redeemable and non-redeemable common stock based on their respective weighted average shares outstanding.

The Company considers its convertible preferred stock to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the holders of the Company’s convertible preferred stock do not have a contractual obligation to share in the Company’s losses.

The following tables present the calculation of basic and diluted net loss per share (in thousands, except share and per share amounts):

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

The Company’s 200,536 unvested earnout shares were excluded from the calculation of basic and diluted per share calculations as the vesting conditions have not yet been met as of June 30, 2026.

Note 10. Segments

The Company operates as a single operating segment. The Company’s Chief Operating Decision Maker ("CODM") is its Chief Executive Officer. All significant operating decisions are based upon analysis of the Company asone operating segment, which is the same as its reporting segment to allocate resources, make operating decisions, and evaluate financial performance.

The CODM considers consolidated net income (loss) to be the financial measure of segment profit and loss for monitoring budget versus actual results, perform variance analysis, and forecast future performance.

The CODM considers the impact of the significant segment expenses on net income (loss), which are the same expenses presented on the unaudited condensed consolidated statements of operations and comprehensive income (loss), with the impact of stock-based compensation removed from the operating expense categories and presented separately when making operating decisions.

The measure of segment assets is reported on the unaudited condensed consolidated balance sheets as total assets. The CODM does not review segment assets at a level other than that presented in the Company's unaudited condensed consolidated balance sheets.

Revenue by geographic area is based on the delivery address of the customer and is summarized as follows:

Other than the United States, no individual country exceeded 10% of total revenue for the three or six months ended June 30, 2026 and June 30, 2025.

The Company’s long-lived assets are composed of property and equipment and right of use assets, net, and are summarized by geographic area as follows:

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

The consolidated financial statements for the years ended December 31, 2024 and December 31, 2025 as well as the unaudited condensed consolidated financial statements for the interim periods ended March 31, 2025, June 30, 2025, September 30, 2025, and March 31, 2026 have been revised to correct for prior period errors as discussed in Note 1. Basis of Presentation. The following tables reflect the impact of the revision to the specific line items presented in our previously reported financial information for the periods impacted by the revision. The Company intends to reflect the revisions to the interim and annual periods in its 2026 quarterly reports to be filed on Form 10-Q and annual report to be filed on Form 10-K, as applicable. There is no impact to net cash provided by/used in operating activities, investing activities, or financing activities in the consolidated statements of cash flows for the applicable periods.

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

Impacts to Consolidated Balance Sheets

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