Owlet, Inc S-3, filed May 13, 2024
Owlet, Inc. (OWLT)
S-3
2024-05-13
View Original
Added on
October 17, 2026
As filed with the Securities and Exchange Commission on May 13, 2024
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OWLET, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 85-1615012 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||
3300 North Ashton Boulevard, Suite 300
Lehi, Utah 84043
(844) 334-5330
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)
Kurt Workman
Chief Executive Officer
Owlet, Inc.
3300 North Ashton Boulevard, Suite 300
Lehi, Utah 84043
(844) 334-5330
(Address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Drew Capurro
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626
(714) 540-1235
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective on filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||||||||
| Emerging growth company | ☒ | |||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for comply with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ☐
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated May 13, 2024.
PROSPECTUS
OWLET, INC.
Up to 2,998,369 Shares of
Class A Common Stock
This prospectus relates to the resale of up to 2,998,369 shares of Class A common stock, par value $0.0001 per share (“Common Stock”), of which 1,199,348 shares are issuable upon the conversion of outstanding shares of Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”) and 1,799,021 shares are issuable upon exercise of outstanding warrants by the securityholders named in this prospectus (the “Registered Holders”). We will not receive any proceeds from the sale of Common Stock by the Registered Holders.
We are registering the shares of Common Stock for resale pursuant to registration rights granted to the Registered Holders under certain agreements between us and the Registered Holders. Our registration of the securities covered by this prospectus does not mean that the Registered Holders will offer or sell any of the shares of Common Stock covered by this prospectus. The Registered Holders may offer and sell the securities described in this prospectus and any related prospectus supplement to or through one or more underwriters, dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement. The Registered Holders will pay all underwriting discounts and selling commissions, if any, in connection with the sale of the shares of Common Stock. We have agreed to pay certain expenses in connection with this prospectus and to indemnify the Registered Holders against certain liabilities. To our knowledge, as of the date of this prospectus, no underwriter or other person has been engaged to facilitate the sale of shares of Common Stock in this offering. See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution” for more information. No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms of the offering of such securities.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” ON PAGE 6 OF THIS PROSPECTUS AND ANY SIMILAR SECTION CONTAINED IN ANY APPLICABLE PROSPECTUS SUPPLEMENT CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES.
Our Common Stock is listed on the New York Stock Exchange, or NYSE, under the symbol “OWLT.” On May 10, 2024, the last reported sale price of our Common Stock on NYSE was $4.17 per share.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is .
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using a “shelf” registration process. By using a shelf registration statement, the Registered Holders may, from time to time, sell up to 2,998,369 shares of Common Stock from time to time in one or more offerings as described in this prospectus. In connection with the offer and sale of securities by the Registered Holders, the Registered Holders may provide a prospectus supplement to this prospectus that contains specific information about the securities being offered and sold and the specific terms of that offering. To the extent permitted by law, we may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. The prospectus supplement or free writing prospectus may also add, update or change information contained in this prospectus with respect to that offering. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement or free writing prospectus, you should rely on the prospectus supplement or free writing prospectus, as applicable. Before purchasing any securities, you should carefully read both this prospectus and any applicable prospectus supplement or free writing prospectuses, together with the additional information described under the heading “Where You Can Find More Information; Incorporation by Reference.”
This prospectus does not contain all of the information included in the registration statement. For a more complete understanding of the offering of the Common Stock, you should refer to the registration statement, including the exhibits. This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the heading “Where You Can Find More Information.” We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
Neither we, nor the Registered Holders, have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus, any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We and the Registered Holders take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The Registered Holders will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and any applicable prospectus supplement to this prospectus is accurate only as of the date of such prospectus or applicable prospectus supplement, that the information appearing in any applicable free writing prospectus is accurate only as of the date of that free writing prospectus, and that any information incorporated by reference is accurate only as of the date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus incorporates by reference, and any prospectus supplement or free writing prospectus may contain and incorporate by reference, market data and industry statistics and forecasts that are based on independent industry publications and other publicly available information. Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this information and we have not independently verified this information. In addition, the market and industry data and forecasts that may be included or incorporated by reference in this prospectus, any prospectus supplement or any applicable free writing prospectus may involve estimates, assumptions and other risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors” contained in this prospectus, the applicable prospectus supplement and any applicable free writing prospectus, and under similar headings in other documents that are incorporated by reference into this prospectus. Accordingly, investors should not place undue reliance on this information.
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When we refer to “Owlet,” “we,” “our,” “us” and the “Company” in this prospectus, we mean Owlet, Inc. and its subsidiaries, unless otherwise specified. When we refer to “you,” we mean the potential holders of the applicable series of securities.
We use our trademarks and our logo, in this prospectus and the documents incorporated by reference. This prospectus and the documents incorporated by reference also include trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks and tradenames referred to in this prospectus appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner will not assert its rights, to these trademarks and tradenames.
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WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
Available Information
We file reports, proxy statements and other information with the SEC. The SEC maintains a web site that contains reports, proxy and information statements and other information about issuers, such as us, who file electronically with the SEC. The address of that website is http://www.sec.gov.
Our web site address is https://www.owletcare.com. The information on our web site, however, is not, and should not be deemed to be, a part of this prospectus.
This prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Documents establishing the terms of the offered securities are or may be filed as exhibits to the registration statement or documents incorporated by reference in the registration statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement through the SEC’s website, as provided above.
Incorporation by Reference
The SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update and supersede that information. Any statement contained in this prospectus or a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or a subsequently filed document incorporated by reference modifies or replaces that statement.
This prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been filed with the SEC:
•Our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 8, 2024, and the information included in Part III of Amendment No. 1 thereto on Form 10-K/A, filed with the SEC on April 29, 2024.
•Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC on May 13, 2024.
•Our Current Reports on Form 8-K filed with the SEC on February 26, 2024 (only as it relates to Items 1.01, 3.02, 3.03, 5.03 and 5.07) and March 4, 2024.
•The description of our Common Stock contained in the registration statement on Form 8-A, filed with the SEC on September 14, 2020, as updated by Exhibit 4.6 to our Annual Report on Form 10-K for the year ended December 31, 2023 and any amendment or report filed with the SEC for the purpose of updating such description.
All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act” in this prospectus, prior to the termination of this offering, including all such documents we may file with the SEC after the initial filing date of the registration statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
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You may request a free copy of any of the documents incorporated by reference in this prospectus by writing or telephoning us at the following address:
Owlet, Inc.
3300 North Ashton Boulevard, Suite 300
Lehi, Utah 84043
(844) 334-5330
Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus or any accompanying prospectus supplement.
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THE COMPANY
Our mission is to empower parents with the right information at the right time, to give them more peace of mind and to help them find more joy in the journey of parenting. Owlet’s digital health infant monitoring platform is transforming this journey. We offer FDA-authorized medical and consumer pediatric wearables and an integrated HD visual and audio camera that provide real-time data and insights to parents who safeguard health, optimize wellness, and ensure peaceful sleep for their children.
Since 2012, over 2 million parents worldwide have used Owlet’s platform contributing to one of the largest collections of consumer infant health and sleep data. We continue to develop software and digital data solutions to bridge the current healthcare gap between hospital and home and bring new insights to parents and caregivers globally. We believe that every child deserves to live a long, happy, and healthy life. We believe that our ecosystem of digital parenting solutions can help in this mission by delivering real-time health insights with medical-grade accuracy and unprecedented advancements for at-home infant care.
We filed our certificate of incorporation with the Secretary of State of Delaware on June 23, 2020 under the name Sandbridge Acquisition Corporation. Upon the closing of the business combination pursuant to that Business Combination Agreement dated February 15, 2021, by and among us (f/k/a Sandbridge Acquisition Corporation), Project Olympus Merger Sub, Inc., and Owlet Baby Care Inc., we changed our name to Owlet, Inc.
Our principal executive offices are located at 3300 North Ashton Boulevard, Suite 300, Lehi, Utah 84043 and our telephone number is (844) 334-5330.
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RISK FACTORS
Investment in any securities offered pursuant to this prospectus and any applicable prospectus supplement involves risks. You should carefully consider the risk factors incorporated by reference to our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, and all other information contained or incorporated by reference into this prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and other information contained in any applicable prospectus supplement and any applicable free writing prospectus before acquiring any of such securities. The occurrence of any of these risks might cause you to lose all or part of your investment in the offered securities. This prospectus and the documents incorporated herein by reference also contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described in the documents incorporated herein by reference.
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale of Common Stock being offered by any of the Registered Holders. To the extent warrants are exercised for cash, we will receive the exercise price thereof.
The Registered Holders will pay any underwriting discounts and commissions and any similar expenses they incur in disposing of the Common Stock, if any, and any related legal expenses incurred by them, except with respect to reimbursement of fees and expenses of legal counsel of certain Registered Holders in connection with certain registered offerings as provided by the Amended and Restated Registration Rights Agreement, dated July 15, 2021, by and among us and certain of our stockholders. We will bear all other costs, fees and expenses incurred in effecting the registration of the Common Stock covered by this prospectus, including all registration and filing fees, fees and expenses of compliance with securities or “blue sky” laws, listing application fees, printing expenses, transfer agent’s and registrar’s fees, costs of distributing prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of our counsel and all independent certified public accountants and other persons retained by us.
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DESCRIPTION OF CAPITAL STOCK
General
The following description summarizes some of the terms of our second amended and restated certificate of incorporation (the “certificate of incorporation”), our amended and restated bylaws (the “bylaws”), the Certificate of Designation of Series A Convertible Preferred Stock of Owlet, Inc. filed with the Delaware Secretary of State on February 17, 2023 (the “Series A Preferred Certificate of Designation”), the Certificate of Designation of Series B Convertible Preferred Stock of Owlet, Inc. filed with the Delaware Secretary of State on February 29, 2024 (the “Series B Preferred Certificate of Designation”) and the General Corporation Law of the State of Delaware (the “DGCL”). This description is summarized from, and qualified in its entirety by reference to, our certificate of incorporation, bylaws, the Series A Preferred Certificate of Designation and the Series B Preferred Certificate of Designation, each of which has been publicly filed with the SEC, as well as the relevant provisions of the DGCL.
Our purpose is to engage in any lawful act or activity for which corporations may be organized under the DGCL. Our authorized capital stock consists of 107,142,857 shares of Class A Common Stock, par value $0.0001 per share (“Common Stock”), and 10,741,071 shares of preferred stock, par value $0.0001 per share. As of the date of this prospectus, we have 37,000 shares of preferred stock issued and outstanding, 27,750 shares of which are designated as Series A Convertible Preferred Stock, par value $0.0001 per share (“Series A Preferred Stock”) and 9,250 of which are designated as Series B Convertible Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”). Unless our board of directors (the “Board”) determines otherwise, we will issue all shares of our capital stock in uncertificated form.
Common Stock
Voting Rights
Holders of shares of our Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. The holders of Common Stock do not have cumulative voting rights in the election of directors. The holders of a majority of the voting power of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, will constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise required by law or provided by our certificate of incorporation. If, however, such quorum will not be present or represented at any meeting of the stockholders, the holders of a majority of the voting power present in person or represented by proxy, will have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum will be present or represented.
Dividend Rights
Declaration and payment of any dividend is subject to the discretion of the Board. The time and amount of dividends will be dependent upon, among other things, our business prospects, results of operations, financial condition, cash requirements and availability, debt repayment obligations, capital expenditure needs, contractual restrictions, covenants in the agreements governing current and future indebtedness, industry trends, the provisions of Delaware law affecting the payment of dividends and distributions to stockholders and any other factors or considerations the Board may regard as relevant.
Liquidation, Dissolution and Winding Up
Upon our liquidation, dissolution or winding up of our affairs, whether voluntary or involuntary, after payment or provision for payment of our debts and any other payments required by law and amounts payable upon shares of preferred stock ranking senior to the shares of Common Stock upon such dissolution, liquidation or winding up, if any, our remaining net assets will be distributed to the holders of shares of Common Stock upon such dissolution, liquidation or winding up, pro rata on a per share basis.
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Other Matters
Holders of our Common Stock do not have preemptive, subscription, redemption or conversion rights. There are no redemption provisions or sinking fund provisions applicable to the Common Stock. The rights, powers, preferences and privileges of holders of the Common Stock are subject to those of the holders of any shares of our preferred stock that the Board may authorize and issue in the future.
Preferred Stock
Under the terms of our certificate of incorporation, the Board has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL.
The purpose of authorizing the Board to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of the outstanding voting stock. Additionally, the issuance of preferred stock may adversely affect the holders of Common Stock by restricting dividends on the Common Stock, diluting the voting power of the Common Stock or subordinating the liquidation rights of the Common Stock. As a result of these or other factors, the issuance of preferred stock could have an adverse impact on the market price of the Common Stock.
Series A Preferred Stock
On February 17, 2023 (the “Series A Closing Date”), we issued an aggregate of 30,000 shares of Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Shares”). The conversion rate is currently 145.7726 shares of Common Stock per Series A Preferred Share (the “Series A Conversion Rate”). Each Series A Preferred Share has the powers, designations, preferences and other rights as are set forth in the Series A Preferred Certificate of Designation.
Ranking and Dividends
The Series A Preferred Shares rank (i) equal to the Series B Preferred Shares and (ii) senior to the Common Stock with respect to dividend rights, rights of redemption and rights upon a liquidation event. The Series A Preferred Stock has a liquidation preference of $1,000.00 per share (the “Series A Liquidation Preference”). We have agreed not to declare, pay or set aside any dividends on shares of Common Stock unless the holders of the Series A Preferred Shares then outstanding first receive, or simultaneously receive, a dividend on each outstanding share of Series A Preferred Stock in an amount at least equal to the product of (i) the dividend payable on each share of Common Stock multiplied by (ii) the number of shares of Common Stock issuable upon conversion of a share of Series A Preferred Share to Common Stock thereunder, in each case calculated on the record date for determination of holders entitled to receive such dividend.
Conversion and Redemption
The Series A Preferred Stock is convertible into Common Stock at the option of the holder at any time subsequent to the Series A Closing Date. The number of shares issuable upon conversion is determined by the number of Series A Preferred Shares so converted multiplied by the Series A Conversion Rate. Cash will be paid in lieu of any fractional shares based on the closing market price of the Common Stock on the conversion date. The Series A Conversion Rate is subject to adjustment for customary anti-dilution protections, including for stock dividends, splits, and combinations, rights offerings, spin-offs, distributions of cash or other property (to the extent not participating on an as-converted basis) and above market self-tender or exchange offers. At any time from and after the five-year anniversary of the Series A Closing Date, the holders of at least a majority of the then-outstanding Series A Preferred Shares may specify a date and time or the occurrence of an event by vote or written consent that all, and not less than all, outstanding Series A Preferred Shares will automatically be: (i) converted into shares of
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Common Stock at the Series A Conversion Rate, (ii) subject to certain exceptions and limitations, redeemed for an amount per share of Series A Preferred Stock equal to the Series A Liquidation Preference plus all accrued or declared but unpaid dividends as of the redemption date and time or (iii) a combination of the foregoing. Subject to certain exceptions, upon the occurrence of a fundamental change, voluntary or involuntary liquidation, dissolution or winding-up of the Company, we will be required to pay an amount per share of Series A Preferred Stock equal to the greater of (i) $1,000.00 per share or (ii) the consideration per share of Series A Preferred Stock as would have been payable had all Series A Preferred Shares been converted to Common Stock immediately prior to the liquidation event, plus, in each case, the aggregate amount of all declared but unpaid dividends thereon to the date of final distribution to the holders of Series A Preferred Stock.
Voting and Consent Rights
Pursuant to the Series A Preferred Certificate of Designation, holders of Series A Preferred Shares are entitled to vote on an as-converted basis with the Common Stock at any annual or special meeting of our stockholders, and not as a separate class, except as required by Delaware law. Additionally, for so long as any Series A Preferred Shares remain outstanding, we will be prohibited, without the consent of the holders of at least a majority of the Series A Preferred Shares, from taking various corporate actions, including:
•creating, authorizing or issuing any additional Series A Preferred Shares or shares which rank senior to or on parity with the Series A Preferred Shares;
•amending, waiving or repealing the rights, preferences or privileges of the Series A Preferred Shares;
•increasing or decreasing the authorized number of Series A Preferred Shares;
•exchanging, reclassifying or canceling the Series A Preferred Shares (except as contemplated by the Series A Preferred Certificate of Designation);
•declaring or paying any dividend on, or making any distribution to, or repurchasing any shares of Common Stock or other securities that rank junior to the Series A Preferred Shares, subject to certain exceptions;
•incurring any indebtedness other than Permitted Indebtedness (as defined in the Series A Preferred Certificate of Designation); and
•creating, adopting, amending, terminating or repealing any equity (or equity-linked) compensation or incentive plan or increase the amount or number of equity securities reserved for issuance thereunder if the New York Stock Exchange would require stockholder approval of such action; provided that our 2021 Incentive Award Plan (the “2021 Plan”) and any automatic annual increases pursuant to the 2021 Plan shall not require approval.
Series B Preferred Stock
On February 29, 2024 (the “Series B Closing Date”), we issued an aggregate of 9,250 shares of Series B Preferred Stock, par value $0.0001 per share (the “Series B Preferred Shares”). The conversion rate is initially 129.6596 shares of Common Stock per Series B Preferred Share (the “Series B Conversion Rate”). Each Series B Preferred Share has the powers, designations, preferences and other rights as are set forth in the Series B Preferred Certificate of Designation.
Ranking and Dividends
The Series B Preferred Stock ranks, with respect to dividend rights, rights of redemption and rights upon a liquidation event, (i) equal to the Series A Preferred Shares and (ii) senior to the Common Stock. The Series B Preferred Stock has a liquidation preference of $1,000.00 per share (the “Series B Liquidation Preference”). We have agreed not to declare, pay or set aside any dividends on shares of Common Stock unless the holders of the Series B Preferred Shares then outstanding first receive, or simultaneously receive, a dividend on each outstanding share of Series B Preferred Share in an amount at least equal to the product of (i) the dividend payable on each share of Common Stock multiplied by (ii) the number of shares of Common Stock issuable upon conversion of a share of
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Series B Preferred Share to Common Stock thereunder, in each case calculated on the record date for determination of holders entitled to receive such dividend.
Conversion and Redemption
The Series B Preferred Stock is convertible into Common Stock at the option of the holder at any time subsequent to the Series B Closing Date. The number of shares issuable upon conversion is determined by the number of Series B Preferred Shares so converted multiplied by the Series B Conversion Rate. Cash will be paid in lieu of any fractional shares based on the closing market price of the Common Stock on the conversion date. The Series B Conversion Rate is subject to adjustment for customary anti-dilution protections, including for stock dividends, splits, and combinations, rights offerings, spin-offs, distributions of cash or other property (to the extent not participating on an as-converted basis) and above market self-tender or exchange offers. At any time from and after the five-year anniversary of the Series B Closing Date, the holders of at least a majority of the then-outstanding Series B Preferred Shares may specify a date and time or the occurrence of an event by vote or written consent that all, and not less than all, outstanding Series B Preferred Shares will automatically be: (i) converted into shares of Common Stock at the Series B Conversion Rate, (ii) subject to certain exceptions and limitations, redeemed for an amount per share of Series B Preferred Stock equal to the Series B Liquidation Preference plus all accrued or declared but unpaid dividends as of the redemption date and time or (iii) a combination of the foregoing. Subject to certain exceptions, upon the occurrence of a fundamental change, voluntary or involuntary liquidation, dissolution or winding-up of the Company, we will be required to pay an amount per share of Series B Preferred Stock equal to the greater of (i) $1,000.00 per share or (ii) the consideration per share of Series B Preferred Stock as would have been payable had all Series B Preferred Shares been converted to Common Stock immediately prior to the liquidation event, plus, in each case, the aggregate amount of all declared but unpaid dividends thereon to the date of final distribution to the holders of Series B Preferred Stock.
The Series B Preferred Certificate of Designation includes certain provisions that prevent Eclipse (as defined below) from converting its Series B Preferred Shares to the extent such action would result in Eclipse beneficially owning in excess of 48.9% of our outstanding Common Stock or Total Voting Power (as defined in the Series B Preferred Certificate of Designation) (the “Individual Holder Share Cap”), provided that such Individual Holder Share Cap is subject to removal at Eclipse’s sole discretion upon written notice to us, provided that any increase or removal of such Individual Holder Share Cap will not be effective before the sixty-first (61st) day after such written notice.
Voting and Consent Rights
Pursuant to the Series B Preferred Certificate of Designation, holders of Series B Preferred Shares are entitled to vote on an as-converted basis with the Common Stock at any annual or special meeting of our stockholders, and not as a separate class, except as required by Delaware law. Additionally, for so long as any Series B Preferred Shares remain outstanding, we will be prohibited, without the consent of the holders of at least a majority of the Series B Preferred Shares, from taking various corporate actions, including:
•creating, authorizing or issuing any additional Series B Preferred Shares or shares which rank senior to or on parity with the Series B Preferred Shares;
•amending, waiving or repealing the rights, preferences or privileges of the Series B Preferred Shares;
•increasing or decreasing the authorized number of Series B Preferred Shares;
•exchanging, reclassifying or canceling the Series B Preferred Shares (except as contemplated by the Series B Preferred Certificate of Designation);
•declaring or paying any dividend on, or making any distribution to, or repurchasing any shares of Common Stock or other securities that rank junior to the Series B Preferred Shares, subject to certain exceptions;
•incurring any indebtedness other than Permitted Indebtedness (as defined in the Series B Preferred Certificate of Designation); and
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•creating, adopting, amending, terminating or repealing any equity (or equity-linked) compensation or incentive plan or increase the amount or number of equity securities reserved for issuance thereunder if the New York Stock Exchange would require stockholder approval of such action; provided that the 2021 Plan and any automatic annual increases pursuant to the 2021 Plan shall not require approval.
Authorized but Unissued Capital Stock
Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of the NYSE, which would apply if and so long as our Common Stock remains listed on the NYSE, require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of Common Stock and certain other issuances specified in the rules of the NYSE. Additional shares that may be issued in the future may be used for a variety of corporate purposes, including future public offerings, to raise additional capital, or to facilitate acquisitions.
One of the effects of the existence of unissued and unreserved Common Stock may be to enable the Board to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise and thereby protect the continuity of management and possibly deprive stockholders of opportunities to sell their shares of Common Stock at prices higher than prevailing market prices.
The existence of authorized but unissued and unreserved Common Stock and preferred stock could make more difficult or discourage an attempt to obtain control of us.
Anti-takeover Effects of Our Certificate of Incorporation and Bylaws
Our certificate of incorporation and bylaws contain provisions that may delay, defer or discourage another party from acquiring control of us. We expect that these provisions, which are summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with the Board, which we believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give the Board the power to discourage acquisitions that some stockholders may favor.
Classified Board of Directors
As indicated below, our certificate of incorporation provides that the Board is divided into three classes of directors, with each class of directors being elected by our stockholders every three years. The classification of directors will have the effect of making it more difficult for stockholders to change the composition of the Board.
Special Meeting, Action by Written Consent and Advance Notice Requirements for Stockholder Proposals
Unless otherwise required by law, and subject to the rights, if any, of the holders of any series of preferred stock, special meetings of our stockholders, for any purpose or purposes, may be called only by or at the direction of (i) a majority of the Board, (ii) the chairperson of the Board, (iii) the Chief Executive Officer or (iv) the President. Unless otherwise required by law, written notice of a special meeting of stockholders, stating the time, place and purpose or purposes thereof, shall be given to each stockholder entitled to vote at such meeting, not less than 10 or more than 60 days before the date fixed for the meeting. Business transacted at any special meeting of stockholders will be limited to the purposes stated in the notice.
In addition, our bylaws require advance notice procedures for stockholder proposals to be brought before an annual meeting of the stockholders, including the nomination of directors. Stockholders at an annual meeting may only consider the proposals specified in the notice of meeting or brought before the meeting by or at the direction of the Board, or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered a timely written notice in proper form to our secretary, of the stockholder’s intention to bring such business before the meeting.
These provisions could have the effect of delaying until the next stockholder meeting any stockholder actions, even if such actions are favored by the holders of a majority of our outstanding voting securities.
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Amendment to Certificate of Incorporation and Bylaws
The DGCL provides generally that the affirmative vote of a majority of the outstanding stock entitled to vote on amendments to a corporation’s certificate of incorporation or bylaws is required to approve such amendment, unless a corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage.
Our certificate of incorporation provides that the following provisions therein may be amended, altered, repealed or rescinded only by the affirmative vote of the holders of at least 66 and 2/3% in voting power of all the then outstanding shares of Common Stock entitled to vote thereon as a class:
•the provisions regarding our preferred stock;
•the provisions regarding the size, classification, appointment, removal and authority of the Board;
•the provisions prohibiting stockholder actions without a meeting;
•the provisions regarding calling special meetings of stockholders;
•the provisions regarding the selection of certain forums for certain specified legal proceedings between us and our stockholders; and
•the provisions regarding the limited liability of our directors.
Our bylaws may be amended or repealed (A) by the affirmative vote of a majority of the entire Board then in office (subject to any bylaw requiring the affirmative vote of a larger percentage of the members of the Board) or (B) without the approval of the Board, by the affirmative vote of the holders of 66 and 2/3% of our outstanding voting stock entitled to vote generally in an election of directors, voting together as a single class.
Business Combinations
Section 203 of the DGCL provides that if a person acquires 15% or more of the voting stock of a Delaware corporation, such person becomes an “interested stockholder” and may not engage in certain “business combinations” with the corporation for a period of three years from the time such person acquired 15% or more of the corporation’s voting stock, unless:
1.the board of directors approves the acquisition of stock or the merger transaction before the time that the person becomes an interested stockholder;
2.the interested stockholder owns at least 85% of the outstanding voting stock of the corporation at the time the merger transaction commences (excluding voting stock owned by directors who are also officers and certain employee stock plans); or
3.the merger transaction is approved by the board of directors and at a meeting of stockholders, not by written consent, by the affirmative vote of 2/3 of the outstanding voting stock which is not owned by the interested stockholder.
A Delaware corporation may elect in its certificate of incorporation or bylaws not to be governed by this particular Delaware law.
Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our voting stock.
Since we have not opted out of Section 203 of the DGCL, it applies to us. As a result, this provision will make it more difficult for a person who would be an “interested stockholder” to effect various business combinations with us for a three-year period. This provision may encourage companies interested in acquiring us to negotiate in advance with the Board because the stockholder approval requirement would be avoided if the Board approves either the
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business combination or the transaction which results in the stockholder becoming an interested stockholder. These provisions also may have the effect of preventing changes in the Board and may make it more difficult to accomplish transactions which stockholders may otherwise deem to be in their best interests.
Election of Directors and Vacancies
The number of directors of the Board shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board. The Board is divided into three classes, designated Class I, II and III, each class of directors will be elected by our stockholders every three years. The Amended and Restated Stockholders Agreement, dated as of February 17, 2023 (the “Stockholders Agreement”), by and among us, Eclipse Ventures Fund I, L.P., Eclipse Continuity Fund I, L.P. and Eclipse Early Growth Fund I (together, “Eclipse”) also provides that, (a) until such time as Eclipse beneficially owns less than 20.0% of the total voting power entitled to elect directors, Eclipse shall be entitled to nominate two individuals (the “Eclipse Directors” and each, an “Eclipse Director”) and (b) from such time that Eclipse beneficially owns less than 20.0% of the total voting power entitled to elect directors and until Eclipse beneficially owns less than 10.0% of the total voting power entitled to elect directors, Eclipse will be entitled to nominate one Eclipse Director and, we will include the nominee selected by Eclipse as a director nominee in our proxy statement for our annual meeting each time directors from the class to which such nominee is assigned are up for election.
Under the bylaws, at all meetings of stockholders that call for the election of directors, a plurality of the votes properly cast will be sufficient to elect such directors to the Board.
Except as the DGCL or the Stockholders Agreement may otherwise require and subject to the rights, if any, of the holders of any series of preferred stock, in the interim between annual meetings of stockholders or special meetings of stockholders called for the election of directors and/or the removal of one or more directors and the filling of any vacancy in that connection, newly created directorships and any vacancies on the Board, including unfilled vacancies resulting from the removal of directors, may be filled only by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum, or by a sole remaining director. All directors will hold office until the expiration of their respective terms of office and until their successors will have been elected and qualified. A director elected or appointed to fill a vacancy resulting from the death, resignation or removal of a director or a newly created directorship will serve for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until his or her successor will have been elected and qualified.
Subject to the Stockholders Agreement and the rights, if any, of any series of preferred stock, any director may be removed from office only with cause and only by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock then entitled to vote at an election of directors. Subject to the terms and conditions of the Stockholders Agreement, in case the Board or any one or more directors should be so removed, new directors may be elected at the same time for the unexpired portion of the full term of the director or directors so removed.
In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by us, subject, nevertheless, to the provisions of the DGCL, our certificate of incorporation and to any bylaws adopted and
in effect from time to time; provided, however, that no bylaws so adopted will invalidate any prior act of the directors which would have been valid if such bylaws had not been adopted.
Notwithstanding the foregoing provisions, any director elected pursuant to the right, if any, of the holders of preferred stock to elect additional directors under specified circumstances will serve for such term or terms and pursuant to such other provisions as specified in the relevant certificate of designations related to the preferred stock.
Exclusive Jurisdiction of Certain Actions
Our bylaws require, to the fullest extent permitted by law, unless we consent in writing to the selection of an alternative forum, that derivative actions brought on our behalf, actions against any of our directors, officers or stockholders for breach of fiduciary duty, actions asserting a claim arising pursuant to any provision of the DGCL or
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our certificate of incorporation or bylaws, and actions asserting a claim against us governed by the internal affairs doctrine may be brought only in the Court of Chancery of the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to the personal jurisdiction of the state and federal courts in the State of Delaware and service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.
Section 22 of the Securities Act of 1933, as amended (the “Securities Act”), creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, both state and federal courts have jurisdiction to entertain such Securities Act claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our bylaws require that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for resolving any action asserting a claim arising under the Securities Act and, if brought in a court other than the federal district courts of the United States of America, the stockholder bringing the suit will be deemed to have consented to the personal jurisdiction of the federal district courts of the United States of America and service of process on such stockholder’s counsel. However, there is uncertainty as to whether a court would enforce such provision, and investors cannot waive compliance with federal securities laws and the rules and regulations thereunder.
The foregoing provisions will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
Limitations on Liability and Indemnification of Officers and Directors
Our certificate of incorporation limits the liability of our directors to the fullest extent permitted by the DGCL, and our bylaws provide that we will indemnify them to the fullest extent permitted by such law. We have entered into agreements to indemnify our directors, executive officers and other employees as determined by the Board. Under the terms of such indemnification agreements, we are required to indemnify each of our directors and officers, to the fullest extent permitted by the laws of the State of Delaware, if the indemnitee acted in good faith and in a manner the indemnitee reasonably believed to be in or not opposed to our best interests. We must indemnify our officers and directors against all reasonable fees, expenses, charges and other costs of any type or nature whatsoever, including any and all expenses and obligations paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing to defend, be a witness or participate in any completed, actual, pending or threatened action, suit, claim or proceeding, whether civil, criminal, administrative or investigative, or establishing or enforcing a right to indemnification under the indemnification agreement. The indemnification agreements also require us, if so requested, to advance within 30 days of such request all reasonable fees, expenses, charges and other costs that such director or officer incurred, provided that such person will return any such advance if it is ultimately determined that such person is not entitled to indemnification by us. Any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
Trading Symbol and Market
Our Common Stock is listed on NYSE under the symbol “OWLT.”
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REGISTERED HOLDERS
This prospectus relates to the possible resale by certain of the Registered Holders from time to time of up to an aggregate of 2,998,369 shares of Common Stock, which consists of 1,199,348 shares issuable upon the conversion of shares of Series B Preferred Stock to Common Stock and 1,799,021 shares of Common Stock issuable upon the exercise of warrants sold in the private placement described below. The term “Registered Holders” includes donees, pledgees, transferees or other successors in interest selling shares of Common Stock received after the date of this prospectus from a Registered Holder as a gift, pledge, partnership distribution or other transfer.
On February 17, 2023, we entered into Investment Agreements (the “Series A Investment Agreement”) with certain of our stockholders, pursuant to which we issued and sold to such stockholders (i) an aggregate of 30,000 shares of our Series A Preferred Stock, par value $0.0001 per share, and (ii) warrants to purchase an aggregate of 7,871,712 shares of Common Stock, par value $0.0001 per share, for an aggregate purchase price of $30.0 million. On February 25, 2024, we entered into an Investment Agreement (the “Series B Investment Agreement”) with the Registered Holders, pursuant to which we issued and sold to the Registered Holders (i) an aggregate of 9,250 shares of our Series B Preferred Stock, par value $0.0001 per share, and (ii) warrants to purchase an aggregate of 1,799,021 shares of Common Stock, par value $0.0001 per share, for an aggregate purchase price of $9.25 million. On July 15, 2021, we entered into the Amended and Restated Registration Rights Agreement with certain of the Registered Holders, which governs certain registration rights of certain Registered Holders.
The following table and footnote disclosure following the table sets forth information concerning the shares of Common Stock that may be offered from time to time by each Registered Holder, the nature of any position, office or other material relationship, if any, that each Registered Holder has had within the past three years with us or with any of our predecessors or affiliates and the number of shares of our Common Stock beneficially owned by each Registered Holder before this offering. The number of shares beneficially owned by each Registered Holder is determined under rules issued by the SEC. Under these rules, beneficial ownership includes any shares as to which the Registered Holder has sole or shared voting power or investment power. Percentage ownership is based on 9,047,883 shares of Common Stock outstanding as of April 19, 2024. In computing the number of shares beneficially owned by a Registered Holder and their percentage ownership, shares of Common Stock subject to options, warrants or other rights held by such Registered Holder that are currently exercisable or will become exercisable within 60 days of April 19, 2024 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other Registered Holder. For purposes of this table, we have assumed that the Registered Holders will have sold all of the securities covered by this prospectus upon the completion of the offering (including all shares of Common Stock issuable upon exercise of the warrants). Each of the Registered Holders listed has sole voting and investment power with respect to the shares beneficially owned by the Registered Holder unless noted otherwise.
The information in the following table has been provided to us by or on behalf of the Registered Holders and the Registered Holders may have sold, transferred or otherwise disposed of all or a portion of their securities after
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the date on which they provided us with information regarding their securities. A Registered Holder may sell all, some or none of its securities in this offering. See “Plan of Distribution.”
| Common Stock Beneficially Owned Before this Offering | Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus | Common Stock Beneficially Owned Upon Completion of this Offering | ||||||||||||||||||||||||||||||
Registered Holder | Number | Percentage | Number | Number | Percentage | |||||||||||||||||||||||||||
Eclipse Early Growth Fund I, L.P. (1) | 12,224,955 | 63.6 | % | 1,944,892 | 10,280,063 | 53.4 | % | |||||||||||||||||||||||||
Trilogy Equity Partners, LLC (2) | 2,493,225 | 22.9 | % | 741,002 | 1,752,223 | 16.1 | % | |||||||||||||||||||||||||
John Stanton and Theresa Gillespie, TIC (3) | 666,695 | 7.0 | % | 216,530 | 450,165 | 4.7 | % | |||||||||||||||||||||||||
John Kim (4) | 332,227 | 3.5 | % | 81,035 | 251,192 | 2.7 | % | |||||||||||||||||||||||||
Peter Thomsen Trust #2 (5) | 30,937 | * | 7,455 | 23,482 | * | |||||||||||||||||||||||||||
Samuel Thomsen Trust #2 (6) | 30,937 | * | 7,455 | 23,482 | * | |||||||||||||||||||||||||||
__________________
*Less than one percent.
(1)Based on information included in the Schedule 13D/A filed with the SEC on March 4, 2024 by Eclipse Continuity GP I, LLC, Eclipse Continuity Fund I, L.P., Eclipse Ventures GP I, LLC, Eclipse Ventures Fund I, L.P., Eclipse Early Growth GP I, LLC, Eclipse Early Growth Fund I, L.P., (together, the “Eclipse Entities”) and Lior Susan, our Chairman of the Board. Includes (i) 2,944,606 shares of Common Stock issuable upon the conversion of Series A Preferred Stock pursuant to the Series A Investment Agreement, (ii) 777,957 shares of Common Stock issuable upon the conversion of Series B Preferred Stock pursuant to the Series B Investment Agreement, (iii) 5,300,291 shares of Common Stock issuable upon the exercise of the amended and restated warrant, dated February 25, 2024, purchased by Eclipse Early Growth Fund I, L.P. pursuant to the Series A Investment Agreement, (iv) 1,166,935 shares of Common Stock issuable upon the exercise of the warrant, dated February 29, 2024, purchased by Eclipse Early Growth Fund I, L.P. pursuant to the Series B Investment Agreement, and (v) 1,066,472 and 968,694 shares of Common Stock held by Eclipse Continuity Fund I, L.P. and Eclipse Ventures Fund I, L.P., respectively. Pursuant to the transaction documents executed in connection with the Series B Investment Agreement, the Eclipse entities may not convert its Series B Preferred Stock or exercise its warrant, as applicable, to the extent such action would result in beneficial ownership in excess of 48.9% of our outstanding Common Stock, with such specified percentage subject to change or removal from time to time by written notice by such holder to us in such holder’s sole discretion. The principal place of business for the foregoing entities is 514 High Street, Suite 4, Palo Alto, California 94301.
(2)Based on information included in the Schedule 13D/A filed with the SEC on March 1, 2024 by Trilogy Equity Partners, LLC. Includes (i) 396,064 shares of Common Stock issuable upon the conversion of Series A Preferred Stock pursuant to the Series A Investment Agreement, (ii) 296,401 shares of Common Stock issuable upon the conversion of Series B Preferred Stock pursuant to the Series B Investment Agreement, (iii) 712,915 shares of Common Stock issuable upon the exercise of the warrant, dated February 17, 2023, purchased by Trilogy Equity Partners, LLC pursuant to the Series A Investment Agreement, (iv) 444,601 shares of Common Stock issuable upon the exercise of the warrant, dated February 29, 2024, purchased by Trilogy Equity Partners, LLC pursuant to the Series B Investment Agreement, and (v) 643,244 shares of Common Stock held by Trilogy Equity Partners, LLC. The principal business address for the foregoing entity is 155 108th Avenue N.E., Suite 400, Bellevue, Washington 98004. Amy McCullough, a member of the Board, is the President and a Manager of Trilogy Equity Partners, LLC. Ms. McCullough disclaims beneficial ownership of the shares held by Trilogy Equity Partners, LLC, except to the extent of her pecuniary interest therein, if any.
(3)Includes (i) 112,835 shares of Common Stock held by John Stanton and Theresa Gillespie, TIC, (ii) 38,147 shares of Common Stock held as tenants in common through their 89.77% ownership of PN Cellular Inc., an entity that owns 42,494 shares of Common Stock, (iii) 106,851 shares of Common Stock issuable upon the conversion of Series A Preferred Stock pursuant to the Series A Investment Agreement, (iv) 86,612 shares of Common Stock issuable upon the conversion of Series B Preferred Stock pursuant to the Series B Investment Agreement, (v) the issuance of 192,332 shares of Common Stock upon the exercise of the warrant, dated February 17, 2023, purchased by John Stanton and Theresa Gillespie, TIC pursuant to the Series A Investment Agreement and (vi) 129,918 shares of Common Stock issuable upon the exercise of the warrant, dated February 29, 2024, purchased by John Stanton and Theresa Gillespie, TIC pursuant to the Series B Investment Agreement.
(4)Includes (i) 72,886 shares of Common Stock issuable upon the conversion of Series A Preferred Stock pursuant to the Series A Investment Agreement, (ii) 32,414 shares of Common Stock issuable upon the conversion of Series B Preferred Stock pursuant to the Series B Investment Agreement, (iii) 131,195 shares of Common Stock issuable upon the exercise of the warrant, dated February 17, 2023, purchased by John Kim pursuant to the Series A Investment Agreement, (iv) 48,621 shares of Common Stock issuable upon the exercise of the warrant, dated February 29, 2024, purchased by John Kim pursuant to the Series B Investment Agreement. John Kim is a member of the Board, (v) 41,782 shares of Common Stock issuable upon the vesting of RSUs within 60 days of April 19, 2024, and (vi) 5,329 shares of Common Stock held by John Kim.
(5)Includes (i) 3,644 shares of Common Stock issuable upon the conversion of Series A Preferred Stock, beneficially owned by John Stanton as sole trustee for the Peter Thomsen Trust #2, pursuant to the Series A Investment Agreement, (ii) 2,982 shares of Common Stock issuable upon the conversion of Series B Preferred Stock, beneficially owned by John Stanton as sole trustee for the Peter Thomsen Trust #2, pursuant to the Series B Investment Agreement, (iii) 6,559 shares of Common Stock issuable upon the exercise of the warrant, dated February 17, 2023, beneficially owned by John Stanton as sole trustee for the Peter Thomsen Trust #2, (iv) 4,473 shares of Common Stock
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issuable upon the exercise of the warrant, dated February 29, 2024, beneficially owned by John Stanton as sole trustee for the Peter Thomsen Trust #2, and (v) 13,279 shares of Common Stock beneficially owned by John Stanton as sole trustee for the Peter Thomsen Trust #2.
(6)Includes (i) 3,644 shares of Common Stock issuable upon the conversion of Series A Preferred Stock, beneficially owned by John Stanton as sole trustee for the Samuel Thomsen Trust #2, pursuant to the Series A Investment Agreement, (ii) 2,982 shares of Common Stock issuable upon the conversion of Series B Preferred Stock, beneficially owned by John Stanton as sole trustee for the Samuel Thomsen Trust #2, (iii) 6,559 shares of Common Stock issuable upon the exercise of the warrant, dated February 17, 2023, beneficially owned by John Stanton as sole trustee for the Samuel Thomsen Trust #2, (iv) 4,473 shares of Common Stock issuable upon the exercise of the warrant, dated February 29, 2024, beneficially owned by John Stanton as sole trustee for the Samuel Thomsen Trust #2, and (v) 13,279 shares of Common Stock beneficially owned by John Stanton as sole trustee for the Samuel Thomsen Trust #2.
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PLAN OF DISTRIBUTION
The Registered Holders may from time to time offer some or all of the shares of Common Stock covered by this prospectus. To the extent required, this prospectus may be amended and supplemented from time to time to describe a specific plan of distribution. The Registered Holders will not pay any of the costs, expenses and fees in connection with the registration of the shares covered by this prospectus, but they will pay any and all underwriting discounts, selling commissions and similar charges attributable to sales of the shares. We will not receive any proceeds from the sale of the shares of Common Stock covered hereby. To the extent warrants are exercised for cash, we will receive the exercise price thereof. The Registered Holders may sell some or all of the shares of Common Stock covered by this prospectus from time to time or may decide not to sell any of the shares of Common Stock covered by this prospectus. The Registered Holders will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related to the then-current market price or in negotiated transactions. The Registered Holders may dispose of their shares by one or more of, or a combination of, the following methods:
•distributions to members, partners, stockholders or other equityholders of the Registered Holders;
•purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus;
•ordinary brokerage transactions and transactions in which the broker solicits purchasers;
•block trades in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
•an over-the-counter distribution in accordance with the rules of the NYSE;
•through trading plans entered into by a Registered Holder pursuant to Rule 10b5-1 under the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans;
•to or through underwriters or broker-dealers;
•in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents;
•in privately negotiated transactions;
•in options transactions;
•through a combination of any of the above methods of sale; or
•any other method permitted pursuant to applicable law.
In addition, any shares that qualify for sale pursuant to Rule 144 promulgated under the Securities Act, or Rule 144, may be sold under Rule 144 rather than pursuant to this prospectus. A Registered Holder that is an entity may elect to make an in-kind distribution of Common Stock to its members, partners, stockholders or other equityholders pursuant to the registration statement of which this prospectus forms a part by delivering a prospectus. To the extent that such members, partners, stockholders or other equityholders are not affiliates of ours, such members, partners, stockholders or other equityholders would thereby receive freely tradable shares of Common Stock pursuant to a distribution pursuant to the registration statement of which this prospectus forms a part.
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To the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution. In connection with distributions of the shares or otherwise, the Registered Holders may enter into hedging transactions with broker-dealers or other financial institutions. In connection with such transactions, broker-dealers or other financial institutions may engage in short sales of shares of Common Stock in the course of hedging the positions they assume with Registered Holders. The Registered Holders may also sell shares of Common Stock short and redeliver the shares to close out such short positions. The Registered Holders may also enter into option or other transactions with broker-dealers or other financial institutions that require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). The Registered Holders may also pledge shares to a broker-dealer or other financial institution, and, upon a default, such broker-dealer or other financial institution, may effect sales of the pledged shares pursuant to this prospectus (as supplemented or amended to reflect such transaction).
A Registered Holder may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by any Registered Holder or borrowed from any Registered Holder or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from any Registered Holder in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement (or a post-effective amendment). In addition, any Registered Holder may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
In effecting sales, broker-dealers or agents engaged by the Registered Holders may arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts or concessions from the Registered Holders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the Registered Holders and any broker-dealers who execute sales for the Registered Holders may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. Any profits realized by the Registered Holders and the compensation of any broker-dealer may be deemed to be underwriting discounts and commissions.
In order to comply with the securities laws of certain states, if applicable, the shares must be sold in such jurisdictions only through registered or licensed brokers or dealers.
We have advised the Registered Holders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the Registered Holders and their affiliates. In addition, we will make copies of this prospectus available to the Registered Holders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Registered Holders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, a prospectus supplement will be distributed that will set forth the number of shares being offered and the terms of the offering, including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter, any discount, commission and other item constituting compensation, any discount, commission or concession allowed or reallowed or paid to any dealer, and the proposed selling price to the public.
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LEGAL MATTERS
The validity of the Common Stock being offered by this prospectus has been passed upon for us by Potter Anderson & Corroon LLP. Certain other legal matters will be passed upon for us by Latham & Watkins LLP.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2023 have been so incorporated in reliance on the report (which contains an explanatory paragraph relating to the Company’s ability to continue as a going concern as described in Note 1 to the financial statements) of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is an estimate of the expenses (all of which are to be paid by the registrant) that we may incur in connection with the securities being registered hereby.
| SEC registration fee | $ | 1,863 | ||||||
| Legal fees and expenses | $ | 50,000 | ||||||
Accounting fees and expenses | 7,500 | |||||||
| Miscellaneous | $ | 637 | ||||||
| Total | $ | 60,000 | ||||||
Item 15. Indemnification of Directors and Officers
Section 102 of the DGCL permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our certificate of incorporation provides that no director of the Registrant shall be personally liable to it or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty.
Section 145 of the DGCL provides that a corporation has the power to indemnify a director, officer, employee, or agent of the corporation, or a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or other enterprise in related capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Our certificate of incorporation provides that we will indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of us) by reason of the fact that he or she is or was, or has agreed to become, a director or officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (all such persons being referred to as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding and any appeal therefrom, if such Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, and, with respect to any criminal action or proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful. Our certificate of incorporation provides that we will indemnify any Indemnitee who was or is a party to an action or suit by or in the right of us to procure a judgment in our favor by reason of the fact that the Indemnitee is or was, or has agreed to become, a director or officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted
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in such capacity, against all expenses (including attorneys’ fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding, and any appeal therefrom, if the Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, except that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to us, unless a court determines that, despite such adjudication but in view of all of the circumstances, he or she is entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that any Indemnitee has been successful, on the merits or otherwise, he or she will be indemnified by us against all expenses (including attorneys’ fees) actually and reasonably incurred in connection therewith. Expenses must be advanced to an Indemnitee under certain circumstances.
We have entered into indemnification agreements with each of our directors and officers. These indemnification agreements may require us, among other things, to indemnify our directors and officers for some expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of his or her service as one of our directors or officers, or any of our subsidiaries or any other company or enterprise to which the person provides services at our request.
We maintain a general liability insurance policy that covers certain liabilities of directors and officers of our corporation arising out of claims based on acts or omissions in their capacities as directors or officers.
In any underwriting agreement we enter into in connection with the sale of Common Stock being registered hereby, the underwriters may agree to indemnify, under certain conditions, us, Registered Holders, our directors, our officers and persons who control us within the meaning of the Securities Act against certain liabilities.
Item 16. Exhibits
Exhibit Number | Description | |||||||
| 3.1 | ||||||||
| 3.2 | ||||||||
| 3.3 | ||||||||
| 3.4 | ||||||||
| 4.1 | ||||||||
| 4.2 | ||||||||
| 5.1 | ||||||||
| 10.1 | ||||||||
| 23.1 | ||||||||
| 23.2 | ||||||||
| 24.1 | ||||||||
| 107 | ||||||||
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Item 17. Undertakings
(a)The undersigned registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii)To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii)To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is a part of the registration statement.
(2)That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(5)That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(A)Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B)Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference
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into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(6)That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii)The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)Any other communications that is an offer in the offering made by the undersigned registrant to the purchaser.
(b)The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(h)Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lehi, Utah, on May 13, 2024.
| OWLET, INC. | |||||
| By: | /s/ Kurt Workman | ||||
| Kurt Workman | |||||
| Chief Executive Officer | |||||
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POWER OF ATTORNEY
Each of the undersigned officers and directors of the registrant hereby severally constitutes and appoints Kurt Workman and Kathryn R. Scolnick, or either of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, and in any and all capacities, to file and sign any and all amendments, including post-effective amendments, to this registration statement and any other registration statement for the same offering that is to be effective under Rule 462(b) of the Securities Act of 1933, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This power of attorney shall be governed by and construed with the laws of the State of Delaware and applicable federal securities laws.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
| SIGNATURE | TITLE | DATE | ||||||||||||
| /s/ Kurt Workman | Chief Executive Officer and Director (principal executive officer) | May 13, 2024 | ||||||||||||
| Kurt Workman | ||||||||||||||
| /s/ Kathryn R. Scolnick | Chief Financial Officer (principal financial officer and principal accounting officer) | May 13, 2024 | ||||||||||||
| Kathryn R. Scolnick | ||||||||||||||
| /s/ Lior Susan | Chairman of the Board of Directors | May 13, 2024 | ||||||||||||
| Lior Susan | ||||||||||||||
/s/ Zane M. Burke | Director | May 13, 2024 | ||||||||||||
Zane M. Burke | ||||||||||||||
| /s/ Laura J. Durr | Director | May 13, 2024 | ||||||||||||
| Laura J. Durr | ||||||||||||||
/s/ Melissa A. Gonzales | Director | May 13, 2024 | ||||||||||||
Melissa A. Gonzales | ||||||||||||||
/s/ John C. Kim | Director | May 13, 2024 | ||||||||||||
John C. Kim | ||||||||||||||
/s/ Amy N. McCullough | Director | May 13, 2024 | ||||||||||||
Amy N. McCullough | ||||||||||||||
/s/ Marc F. Stoll | Director | May 13, 2024 | ||||||||||||
Marc F. Stoll | ||||||||||||||
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Exhibit 5.1
| Potter Anderson & Corroon LLP |  | |||||||
| 1313 N. Market Street, 6th Floor | ||||||||
| Wilmington, DE 19801-6108 | ||||||||
| 302.984.6000 | ||||||||
| potteranderson.com | ||||||||
May 13, 2024
Owlet, Inc.
3300 North Ashton Boulevard, Suite 300
Lehi, Utah 84043
Re: Registration Statement of Owlet, Inc. on Form S-3
Ladies and Gentlemen:
We have acted as special Delaware counsel to Owlet, Inc., a Delaware corporation (the “Company”), in connection with the Registration Statement on Form S-3 (the “Registration Statement”), to be filed by the Company with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as amended (the “Act”), registering up to 2,998,369 shares of Class A Common Stock, par value $0.0001 per share, of the Company (the “Common Stock”), of which 1,199,348 shares of Common Stock are issuable upon the conversion of the outstanding shares of Series B Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series B Preferred Stock”) and 1,799,021 shares of Common Stock are issuable upon the exercise of certain outstanding warrants to purchase shares of Common Stock (the “Warrants”). In connection with the filing of the Registration Statement, you have asked us to pass upon the validity of the Common Stock being offered pursuant to the prospectus included in the Registration Statement. At your request, this opinion letter is being furnished to you for filing as Exhibit 5.1 to the Registration Statement.
For the purpose of rendering our opinions as stated herein, we have conducted no independent factual investigation of our own, and have examined only the following documents:
(i) the Second Amended and Restated Certificate of Incorporation of the Company (f/k/a Sandbridge Acquisition Corporation), as filed with the Secretary of State of the State of Delaware (the “Secretary of State”) on July 15, 2021, which became effective on the same (the “Second A&R Charter”), as amended by that certain State of Delaware Certificate of Change of Registered Agent And/Or Registered Office, as filed with the Secretary of State on November 3, 2022, which became effective on the same, and as further amended by the Certificate of Designation of Series A Convertible Preferred Stock of the Company, as filed with the Secretary of State on February 17, 2023, which became effective on the same, and as further amended by the Certificate of Amendment to Second A&R Charter, as filed with the Secretary of State on July 7, 2023, which became effective on the same, and as further amended by the Certificate of Designation of Series B Convertible Preferred Stock of the Company, as filed with the Secretary of State on February 29, 2024, which became effective on the same;
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May 13, 2024
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(ii) the Amended and Restated Bylaws of the Company, which constitute the bylaws of the Company currently in effect;
(iii) the Investment Agreement, by and among the Company and Eclipse Early Growth Fund I, L.P., Trilogy Equity Partners, LLC, John Stanton and Terry Gillespie, TIC, Samuel Thomsen Trust No. 2, Peter Thomsen Trust No. 2, and John Kim, dated as of February 25, 2024 (the “Agreement”);
(iv) the Warrants, by and between (a) the Company and Eclipse Early Growth Fund I, L.P., (b) the Company and Trilogy Equity Partners, LLC, (c) the Company and John Stanton and Terry Gillespie, TIC, (d) the Company and Samuel Thomsen Trust No. 2, (e) the Company and Peter Thomsen Trust No. 2, and (f) the Company and John Kim, in each case, dated February 29, 2024;
(v) the Registration Statement;
(vi) the resolutions of the Board of Directors of the Company (the “Board”), adopted at a meeting of the Board held on February 12, 2021, pursuant to which the Board, among other things, approved and declared advisable the Second A&R Charter;
(vii) the Certificate Regarding Shareholder Vote, dated July 14, 2021 and executed by the Chief Executive Officer of the Company, and Exhibit A attached thereto (Report of Inspector of Election);
(viii) Proxy Statement for Special Meeting of Sandbridge Acquisition Corporation and Prospectus for 44,116,721 Shares of Class A Common Stock of Sandbridge Acquisition Corporation (Registration No. 333-254888), filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended;
(ix) the Action by Unanimous Written Consent of the Board, effective April 26, 2023, pursuant to which the Board, among other things, adopted, approved and declared advisable eleven alternative amendments to the Second A&R Charter that would effect, among other things, a range of reverse stock splits, including a reverse stock split whereby each 14 shares of Common Stock, issued and outstanding immediately prior to July 7, 2023 at 5:00 p.m. Eastern Time (the “Effective Time”), would be reclassified, combined and reconstituted into one share of Common Stock at the Effective Time (such reverse stock split, the “Reverse Split” and such reverse stock split amendments, the “Reverse Stock Split Amendments”);
(x) the Action by Unanimous Written Consent of the Board, effective June 26, 2023, pursuant to which, among other things, the Board abandoned all of the Reverse Stock Split Amendments, other than the amendments set forth in the certificate of amendment to the Second A&R Charter providing for, among other things, the Reverse Split (the “Certificate of Amendment”), and authorized the officers of the Company to prepare and file the Certificate of Amendment;
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(xi) the Certificate & Final Report of the Inspector of Election, dated July 3, 2023, for the 2023 Annual Meeting of the Stockholders of the Company held on June 23, 2023;
(xii) the Related Person Transaction Policy and Procedures of the Company, effective July 15, 2021 (the “Related Person Transaction Policy and Procedures”);
(xiii) the Code of Business Conduct and Ethics of the Company, effective August 15, 2023 (“Code of Business Conduct and Ethics”);
(xiv) the Action by Unanimous Written Consent of the Board, dated February 15, 2024, pursuant to which the Board, among other things, established a special finance committee of the Board (the “Finance Committee”);
(xv) the Action by Unanimous Written Consent of the Audit Committee of the Board (the “Audit Committee”), dated February 25, 2024, pursuant to which the Audit Committee, among other things, ratified, authorized and approved the Agreement and authorized the issuance of the shares of Series B Preferred Stock and Warrants pursuant thereto and the issuance of the shares of Common Stock upon the conversion of the shares of Series B Preferred Stock and the exercise of the Warrants in accordance with their respective terms under the Related Person Transaction Policy and Procedures and the Code of Business Conduct and Ethics;
(xvi) the Action by Unanimous Written Consent of the Finance Committee, dated February 25, 2024, pursuant to which the Finance Committee, among other things, approved the Agreement and authorized the issuance of the shares of Series B Preferred Stock and Warrants pursuant thereto, and the issuance of the shares of Common Stock upon the conversion of the shares of Series B Preferred Stock and the exercise of the Warrants in accordance with their respective terms;
(xvii) the Written Consent of the Series A Convertible Preferred Stockholders of the Company, dated February 25, 2024, pursuant to which such holders of shares of Series A Convertible Preferred Stock, par value $0.0001 per share, of the Company, among other things, authorized and approved the creation, authorization and issuance of the Series B Preferred Stock;
(xviii) a certificate of an officer of the Company, dated May 13, 2024 (the “Officer’s Certificate”); and
(xix) a Certificate of Good Standing with respect to the Company, dated May 13, 2024, obtained from the Secretary of State.
For purposes of this opinion letter, we have not reviewed any documents, agreements or records other than the documents, agreements or records listed in (i) through (xix) above. In particular, we have not reviewed, and express no opinion on, any document, agreement or record (other than the documents, agreements or records listed in (i) through (xix) above) that is referred to or incorporated by reference into, the documents, agreements or records
Owlet, Inc.
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reviewed by us (unless otherwise listed in (i) through (xix) above). We have assumed that there exists no provision in any document, agreement or record that we have not reviewed that bears upon or is inconsistent with or would otherwise alter the opinions stated herein.
As to certain factual matters, we have relied upon the Officer’s Certificate and have not sought to independently verify such matters.
Based solely upon our examination of and reliance upon the foregoing, and subject to the limitations, exceptions, qualifications, and assumptions set forth herein, we are of the opinion that:
A. Upon the issuance and delivery of the shares of Common Stock pursuant to and in accordance with the terms of the Series B Preferred Stock and their offering pursuant to the prospectus included in the Registration Statement, such shares of Common Stock will be validly issued, fully paid, and non-assessable.
B. Upon the issuance and delivery of the shares of Common Stock pursuant to and in accordance with the terms of the Warrants and their offering pursuant to the prospectus included in the Registration Statement, such shares of Common Stock will be validly issued, fully paid, and non-assessable.
The opinions expressed herein are subject in all respects to the following assumptions, limitations, and qualifications:
(i) Our opinions expressed herein are limited to the General Corporation Law of the State of Delaware (the “DGCL”) in effect on the date hereof. We have not considered and express no opinion with regard to, or as to the significance or effect in any respect of, laws, rules or regulations of any other jurisdiction (whether foreign or domestic), including, without limitation, the laws of any other state of the United States, federal laws of the United States (including, without limitation, federal laws and rules and regulations relating to securities), the securities laws of any state of the United States, blue sky laws, antitrust laws, insurance laws, tax laws, and regulations of stock exchanges or of any other regulatory body.
(ii) We have assumed that each of the parties to each of the documents examined by us is duly organized, incorporated, or formed, is validly existing, and, if applicable, is in good standing under the laws of its respective jurisdiction of organization, incorporation or formation. In addition, we have assumed that each of the parties (exclusive of the Company) to each of the documents examined by us has all requisite legal capacity, power, authority, and legal right to execute, deliver, and perform its obligations under each such document to which it is a party. We have also assumed that the execution, delivery and performance of each of the documents examined by us has been duly authorized by each of the parties thereto (exclusive of the Company), and has been duly executed and delivered by each of the parties thereto in the form submitted for our review. We have also assumed that the due authorization, execution and delivery of each document examined by us by each of the parties thereto, the performance by each of such parties of their respective obligations thereunder, and the consummation of the transactions contemplated thereby, does not result in the breach of the terms of, and does not (a)
Owlet, Inc.
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result in a breach of the terms of, and does not contravene the constituent documents or any law, rule, or regulation applicable to, any such party thereto (exclusive of, with respect to the Company only, the Company’s constituent documents and any law, rule or regulation of the State of Delaware applicable to the Company), (b) result in a breach of the terms of, and does not contravene, any contractual restriction binding upon any such party thereto, or (c) require under any law, statute, rule, or regulation applicable to any party thereto any registration or filing with, or any authorization, consent or approval of, any governmental authority (other than the filing of the Registration Statement with the Commission, which you have advised us is required by the Act).
(iii) We have assumed, without any investigation, (a) the legal capacity of natural persons who are signatories to the documents examined by us, (b) the genuineness of all signatures on all documents examined by us, (c) the authenticity of all documents submitted to us as originals, (d) the accuracy and completeness of all documents examined by us, (e) the conformity to authentic originals of all documents submitted to us as certified, conformed, photostatic, or other copies, and (f) that the documents, in the forms submitted to us for review, have not been and will not be altered, modified, or amended in any respect, and have not otherwise been revoked since the time of their adoption and remain in full force and effect.
(iv) We assume that, at the time of the issuance of the shares of Common Stock pursuant to the conversion of the Series B Preferred Stock and/or the exercise of the Warrants, there will be a sufficient number of unissued shares of Common Stock, which shares had not been previously subscribed for, reserved, or otherwise committed to be issued, available to satisfy the obligation of the Company to issue such shares.
(v) We have assumed that each of the statements made and certified in the Officer’s Certificate was true and correct when made, has at no time since being made and certified become untrue or incorrect, remains true and correct on the date hereof, and will be true and correct on the date the Company is or becomes obligated to issue the shares of Common Stock issuable upon the conversion of the shares of Series B Preferred Stock and/or the exercise of the Warrants.
(vi) We have assumed that the issuance of any shares of Common Stock that become issuable pursuant to the conversion of the shares of Series B Preferred Stock and/or the exercise of the Warrants, will be, duly registered on the Company’s stock ledger, and that the shares of Common Stock that become issuable pursuant to the conversion of the shares of Series B Preferred Stock and/or the exercise of the Warrants will be, uncertificated.
(vii) The opinions set forth herein are subject to and may be limited by (a) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, fraudulent transfer and similar laws relating to or affecting creditors rights generally including, without limitation, the Delaware Uniform Fraudulent Transfer Act, the provisions of the United States Bankruptcy Code and the Delaware insolvency statutes, (b) principles of equity including, without limitation, concepts of materiality, good faith, fair dealing, conscionability and reasonableness and the possible unavailability of specific performance or injunctive relief (regardless of whether such enforceability is considered in a proceeding in equity or at law), (c) applicable law relating to
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fiduciary duties, (d) public policy limitations with respect to exculpation, contribution, indemnity and advancement provisions, (e) the qualification that enforceability may be limited by a refusal to recognize a purported waiver of any statutory right other than, as a matter of state law in the state courts of the State of Delaware, the right to a trial by jury, (f) generally applicable rules of law that forum selection clauses in contracts are not necessarily binding on the courts in the forum selected, (g) general rules of law that may render an entire agreement unenforceable if any unenforceable provision thereof is essential to the agreed upon exchange, (h) the qualification that a provision permitting modification of an agreement or waiver of rights or remedies under an agreement only in writing may not be enforceable and (i) the qualification that provisions requiring the payment of attorneys’ fees may be limited.
(viii) We express no opinion as to the Uniform Commercial Code (including the Delaware Uniform Commercial Code, 6 Del. C. § 1-101 et seq., in effect on the date hereof) or as to whether any filings may be required thereunder in connection with any of the documents examined by us.
(ix) The opinions expressed in this letter are rendered as of the date hereof and are based on our understandings and assumptions as to present facts, and on the application of the DGCL as the same exists on the date hereof. We assume no obligation to update or supplement this opinion letter after the date hereof with respect to any facts or circumstances that may hereafter come to our attention or to reflect any changes in the facts or law that may hereafter occur or take effect.
We hereby consent to your filing this opinion letter as Exhibit 5.1 to the Registration Statement and to the reference to our firm in the Registration Statement and the related prospectus under the caption “Legal Matters.” These opinions are rendered solely for your benefit in connection with the filing of the Registration Statement and, except as provided in the preceding sentence, may not, without our prior written consent, be furnished or quoted to any other person or entity. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act and the rules and regulations of the Commission thereunder.
| Very truly yours, | ||
| /s/ Potter Anderson & Corroon LLP | ||
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of Owlet, Inc. of our report dated March 8, 2024 relating to the financial statements, which appears in Owlet, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2023. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
| /s/ PricewaterhouseCoopers LLP | ||
| Salt Lake City, Utah | ||
| May 13, 2024 | ||