Leases

12 Months Ended

Dec. 31, 2024

Leases [Abstract]

Leases

Leases

Leases are determined at inception by assessing whether the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Owlet's leases consist of leases for corporate offices and have remaining lease terms of 0.1 to 2.3 years with options for renewal. Renewal and termination options have not been included in the lease terms, as it is not reasonably certain that such options will be exercised. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Leases typically contain rent escalations over the lease term. The Company recognizes expense for these leases on a straight-line basis over the lease term. Certain leases require the Company to pay taxes, insurance, maintenance and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the ROU assets and lease liabilities to the extent they are variable in nature. These variable lease costs are recognized as a variable lease expense when incurred.

ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Owlet uses its incremental borrowing rate, based on the information available at the lease commencement date, to determine the present value of lease payments. There were no finance leases during the years ended December 31, 2023 and December 31, 2024.

Income from subleased properties is recognized on a straight-line basis and presented as a reduction of costs, allocated among operating expense line items in the Company’s consolidated statements of operations and comprehensive income (loss). In addition to sublease rent, variable non-lease costs such as common area maintenance and utilities are charged to subtenants over the duration of the lease for their proportionate share of these costs. These variable non-lease income receipts are recognized in operating expenses as a reduction to costs incurred by the Company in relation to the head lease.

The following table summarizes the Company's right-of-use assets, liabilities, and other information about our leases (dollars in thousands):

	December 31,
	2024		2023
Right of use assets, net	$	138	$	937
Accrued and other expenses	$	83	$	1,169
Other long-term liabilities	87		22
Total lease liabilities, net	$	170	$	1,191
Weighted average remaining lease term	2.1 years		0.7 years
Weighted average discount rate	13.5%		6.3%

Operating lease costs are recognized on a straight-line basis over the lease term. Total operating lease costs were $998 and $1,537 for the years ended December 31, 2024 and 2023, respectively, which included immaterial amounts related to short-term and variable lease costs.

Supplemental cash flow information related to leases was as follows (in thousands):

	Year Ended December 31,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities	$	1,178	$	2,257
Right of use assets obtained in exchange for new operating lease liabilities	$	130	$	45

The following table shows the future maturities of lease liabilities for leases in effect as of December 31, 2024 (in thousands):

Year Ended December 31,	Amount
2025	$	82
2026	71
2027	24
Total lease payments	177
Less: imputed interest	(7)
Total	$	170

As of December 31, 2024, the Company had no sublease arrangements, as all sublease agreements ended in 2024. The Company recognized sublease income of $765 and $1,292 for the years ended December 31, 2024 and 2023, respectively.

Leases

Leases

Leases are determined at inception by assessing whether the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Owlet's leases consist of leases for corporate offices and have remaining lease terms of 0.1 to 2.3 years with options for renewal. Renewal and termination options have not been included in the lease terms, as it is not reasonably certain that such options will be exercised. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Leases typically contain rent escalations over the lease term. The Company recognizes expense for these leases on a straight-line basis over the lease term. Certain leases require the Company to pay taxes, insurance, maintenance and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the ROU assets and lease liabilities to the extent they are variable in nature. These variable lease costs are recognized as a variable lease expense when incurred.

ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Owlet uses its incremental borrowing rate, based on the information available at the lease commencement date, to determine the present value of lease payments. There were no finance leases during the years ended December 31, 2023 and December 31, 2024.

Income from subleased properties is recognized on a straight-line basis and presented as a reduction of costs, allocated among operating expense line items in the Company’s consolidated statements of operations and comprehensive income (loss). In addition to sublease rent, variable non-lease costs such as common area maintenance and utilities are charged to subtenants over the duration of the lease for their proportionate share of these costs. These variable non-lease income receipts are recognized in operating expenses as a reduction to costs incurred by the Company in relation to the head lease.

The following table summarizes the Company's right-of-use assets, liabilities, and other information about our leases (dollars in thousands):

	December 31,
	2024		2023
Right of use assets, net	$	138	$	937
Accrued and other expenses	$	83	$	1,169
Other long-term liabilities	87		22
Total lease liabilities, net	$	170	$	1,191
Weighted average remaining lease term	2.1 years		0.7 years
Weighted average discount rate	13.5%		6.3%

Operating lease costs are recognized on a straight-line basis over the lease term. Total operating lease costs were $998 and $1,537 for the years ended December 31, 2024 and 2023, respectively, which included immaterial amounts related to short-term and variable lease costs.

Supplemental cash flow information related to leases was as follows (in thousands):

	Year Ended December 31,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities	$	1,178	$	2,257
Right of use assets obtained in exchange for new operating lease liabilities	$	130	$	45

The following table shows the future maturities of lease liabilities for leases in effect as of December 31, 2024 (in thousands):

Year Ended December 31,	Amount
2025	$	82
2026	71
2027	24
Total lease payments	177
Less: imputed interest	(7)
Total	$	170

As of December 31, 2024, the Company had no sublease arrangements, as all sublease agreements ended in 2024. The Company recognized sublease income of $765 and $1,292 for the years ended December 31, 2024 and 2023, respectively.