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Debt and Other Financing Arrangements
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Debt and Other Financing Arrangements Debt and Other Financing Arrangements
The Company’s indebtedness consisted of the following:
December 31,
20252024
Term loan facility payable to WTI, net$5,609 $4,819 
Line of credit6,9326,263
Financed insurance premium489 615 
Total debt13,030 11,697 
Less: current portion(10,567)(7,366)
Total long-term debt, net$2,463 $4,331 

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

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 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 was 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 ended 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 the Company 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 Company’s then-current, board-approved operating and financing plan to WTI's satisfaction, as well as compliance with certain reporting conditions. As of December 31, 2025, the Company was in compliance with all covenants under 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. WTI and the Company agreed to extend the remaining $2,500 of the First Tranche Commitment until March 31, 2025. The Company ultimately elected not to draw on the remainder of the First Tranche Commitment and, as a result, 62,500 unvested shares of the redeemable common stock described below were forfeited on March 31, 2025. In July 2025, WTI granted a 90-day extension to make the Second Tranche Commitment available through November 13, 2025. The terms of the Loan Facility Agreement were otherwise not modified in connection with the extension. The Company ultimately elected not to draw on the Second Tranche Commitment and, as a result, 125,000 unvested shares of redeemable common stock were forfeited on November 13, 2025.

Interest on the outstanding principal amounts under the WTI Loan Facility accrues at a rate per annum equal to the sum of the prime rate plus 3.5%, with a floor of 12%. Commencing on November 1, 2025 through maturity on January 1, 2028, the Company is required to make monthly interest and principal payments. Loans under the WTI Loan Facility also accrue 2.5% in payment-in-kind interest (“PIK Interest”) compounded monthly, and PIK Interest payments will be due and payable upon maturity of the loans. The interest rate on the outstanding principal amounts under the WTI Loan Facility for the year ended December 31, 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 consolidated balance sheets.

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 as described above.

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 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 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. 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.

The Company 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 were accounted for as loan commitment assets, which were amortized to interest income (expense), net using the straight-line method over the commitment periods, due to uncertainty about the Company’s intent to access the Loan Commitments. The unamortized portion of the loan commitment assets was $0 and $809 as of December 31, 2025 and 2024, respectively, and is recorded within Other assets on the consolidated balance sheets.

The Company recognized $1,087 and $256 of interest expense related to the amortization of debt financing costs of the WTI Loan Facility and $809 and $764 of interest expense related to the amortization of the loan commitment assets during the years ended December 31, 2025 and December 31, 2024, respectively.

Details of the WTI Loan Facility were as follows:
December 31,
20252024
Principal outstanding$7,012 $7,500 
Unamortized debt financing costs(1,652)(2,739)
Accrued PIK Interest249 58 
Net carrying value$5,609 $4,819 

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 "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 Credit Agreement provides for an asset-based revolving credit line (the "ABL Line of Credit") with an initial 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 the Company's assets. Loans and other obligations under the Credit Agreement bear 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 varies 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 December 31, 2025, there was $6,932 of outstanding borrowings under the Credit Agreement, which is recorded as a current liability on the consolidated balance sheet based on the Company's intent and ability to repay the outstanding borrowings in the near term. The remaining borrowing base availability under the Credit Agreement was $9,897 as of December 31, 2025

The ABL Line of Credit matures on September 10, 2027 (the “Maturity Date”). If for any reason the Credit Agreement is terminated or all outstanding loans and other obligations are paid in full and the ABL Line of Credit is terminated before the Maturity Date, the Company will be obligated to pay a prepayment fee equal to a percentage of the then-current Revolving Commitment, which percentage decreases on certain anniversary of the closing date.

The Credit Agreement contains representations, warranties, covenants, and events of default customary for agreements of this type. On June 11, 2025, the Company and OBCI, entered into a First Amendment to the Credit Agreement (the “First Amendment”) with the Lenders and the Administrative Agent. The First Amendment amends the Credit Agreement to (among other things) (i) modify certain financial covenants, including EBITDA covenants, required to be maintained by OBCI, (ii) increase the amount of capital expenditures that may be incurred by OBCI during certain fiscal years, and (iii) expand the eligibility of certain accounts receivable that OBCI can borrow against. Apart from the aforementioned changes, no modifications were made to other covenants, including the liquidity covenant. The liquidity covenant requires the Company to maintain liquidity of $4,000. Liquidity is defined as the sum of (x) Undrawn Availability, as defined in the Credit Agreement, on the asset-based line of credit, plus (y) unrestricted cash and funds held in deposit accounts. In addition, if the liquidity falls below $9,000, the Company is then subject to a minimum trailing-twelve-months EBITDA covenant as defined in the Credit Agreement. As of December 31, 2025, the Company was in compliance with all covenants under the Credit Agreement.
The unamortized portion of debt financing costs related to the Credit Agreement as of December 31, 2025 and December 31, 2024 was $525 and $657 respectively, and is recorded as a loan commitment asset within other assets on the consolidated balance sheets. These costs are amortized straight-line over the term of the Credit Agreement and recorded within interest income (expense), net on the consolidated statements of operations and comprehensive income (loss).

The Company recognized $259 and $74 of interest expense related to the amortization of the loan commitment assets during the year ended December 31, 2025 and December 31, 2024, 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 totaling $886 to be paid within one year, accruing interest at a weighted average rate of 8.4% As of December 31, 2025, the remaining principal balance on the combined financed insurance premiums was $489.

Future Aggregate Maturities

As of December 31, 2025, future aggregate maturities of the WTI Loan Facility and Financed Insurance Premium payables were as follows:

Year Ended December 31,Amount
2026$3,635 
20273,550 
2028565 
Total$7,750