Owlet (OWLT) FY2025 10-K Risk Factors: 16 New, 21 Dropped

What the changes say

Owlet faces continued losses and reliance on single-source manufacturers for its regulated medical devices and cameras.
Concentration of sales among a few top retailers creates significant revenue dependency and volatility risks.

What changed since the prior 10-K

New

NewRisks Related to Our Business and Operations
We have a limited operating history at our current scale, which makes it difficult to evaluate our current business model and future prospects and may increase the risk of your investment
Expanding operations across 30 countries and launching multiple new products and subscriptions creates scaling and financial forecasting difficulties.
NewRisks Related to Our Business and Operations
We have a history of losses and may not achieve or sustain profitability. Operating losses could continue, which could materially and adversely affect our business, financial condition and results of operations
We incurred a net loss of $39.7 million in 2025 and hold an accumulated deficit of $307.9 million.
NewRisks Related to Our Business and Operations
We may need to raise additional capital in the future to support our operations and strategic plans. We have a history of losses from operations and negative cash flows from operations, and we may continue to incur operating losses
We may need additional capital to fund operations due to recurring losses and negative cash flows.
NewRisks Related to Our Business and Operations
We currently rely on single-source contract manufacturers for the assembly of our sock monitor and camera products, and disruptions or cost increases could adversely affect our business
We rely on single-source manufacturers Benchmark Electronics in Thailand and Aoni in China and Vietnam for our hardware products.
NewRisks Related to Our Business and Operations
Gray market activity, product diversion, and theft could harm our brand, customer experience, and results of operations
Product theft, diversion, and gray market activity can disrupt our pricing and strain retail relationships.
NewRisks Related to Our Business and Operations
Our reliance on NAND flash memory for our Dream Sight and Dream Duo product lines exposes us to significant supply shortages and cost volatility that could adversely affect our margins and product availability
A global structural shortage of NAND flash memory driven by AI infrastructure demand creates supply constraints and higher costs for Dream Sight and Dream Duo.
NewRisks Related to Our Business and Operations
If we are unable to successfully develop, introduce, and drive adoption of new products, services, and enhancements, our business, financial condition and results of operations could be adversely affected
Failure to successfully develop and drive adoption of new products like Owlet360 and BabySat could hurt our financial results.
NewRisks Related to Our Business and Operations
competing products, services or technologies. In addition, the introduction or announcement of newer products, services or enhancements may reduce demand for, or shorten the lifecycle of, our existing products and services
NewRisks Related to Our Business and Operations
If we do not successfully develop and commercialize innovative products and services that remain competitive, we could lose revenue opportunities and customers, and our ability to grow our business would be impaired, adversely affecting our financial condition and results of operations
Intense competition from larger companies with greater resources and rapid technological changes could render our products obsolete.
NewRisks Related to Regulation of Our Industry and Products
Dream Sock and BabySat are regulated as medical devices by the FDA and other regulatory authorities, and we must maintain ongoing compliance with medical device requirements with respect to the design, manufacture, sale, marketing, distribution, and post-market oversight of such products
Dream Sock and BabySat are regulated as Class II medical devices by the FDA requiring ongoing compliance.
NewRisks Related to Regulation of Our Industry and Products
change, and the FDA could determine that one or more future products, product modifications, or new intended uses would require a different or more burdensome regulatory pathway
Product modifications can trigger expensive and lengthy 510(k) or de novo regulatory pathways.
NewRisks Related to Regulation of Our Industry and Products
We rely on third party manufacturers and suppliers to produce our products in compliance with applicable quality system and regulatory requirements, and failure to do so could result in enforcement actions, recalls, and supply disruptions
Contract manufacturers must adhere to FDA QMSR and ISO 13485 quality standards to legally market our devices.
NewRisks Related to Regulation of Our Industry and Products
the addition of new features, may increase our post-market compliance obligations or require additional regulatory assessment, and any failure to manage such changes appropriately could result in regulatory action or restrictions on sales or support
NewRisks Related to Our Intellectual Property
challenged or otherwise prove ineffective, we may be required to undertake costly product redesign efforts or discontinue certain products, or our competitive position may be harmed
NewRisks Related to Our Intellectual Property
meaningfully enforce our intellectual property rights could harm our ability to compete and reduce demand for our products and services
NewRisks Related to Our Securities
The market price of our common stock and warrants may be volatile. In addition, any trading market for our public warrants may be limited, and the market price of the public warrants (if any) may be more volatile and less liquid than the market for our common stock

Dropped

DroppedRisks Related to Our Business and Operations
We have a limited operating history
Limited operating history makes evaluating future prospects difficult.
DroppedRisks Related to Our Business and Operations
We have not been profitable to date, and operating losses could continue, which could materially and adversely affect our business, financial condition and results of operations, including our ability to continue as a going concern
History of losses and potential inability to continue as a going concern.
DroppedRisks Related to Our Business and Operations
We will likely need to raise additional capital in the future in order to execute our strategic plan, which may not be available on terms acceptable to us, or at all
DroppedRisks Related to Our Business and Operations
Some of our products and services are in development or have been recently introduced into the market and may not achieve market acceptance, which could limit our growth and adversely affect our business, financial condition and results of operations
Need to raise capital with $20.2 million in cash remaining as of December 31, 2024.
DroppedRisks Related to Our Business and Operations
If we are unable to successfully develop and effectively manage the introduction of new products and services, our business may be adversely affected
DroppedRisks Related to Our Business and Operations
We have in the past experienced challenges managing the inventory of our products, which has led and may in the future lead to increased shipping costs for air freight in order to fulfill customer orders in a timely manner, which has affected our gross margin and could impair the strength of our brand
DroppedRisks Related to Our Business and Operations
unable to collect amounts owed to us and could even be required to repay certain amounts paid to us prior to the bankruptcy filing. The occurrence of any of these events would have an adverse effect on our business, cash flows, financial condition and results of operations
DroppedRisks Related to Our Business and Operations
In addition, as we expand our business internationally, the application and implementation of existing, new or future international laws regarding indirect taxes (such as a Value Added Tax) could materially and adversely affect our business, financial condition and results of operations
DroppedRisks Related to Regulation of Our Industry and Products
marketing and sales of Owlet Smart Sock in the UK, we may have to cease support of the product in the UK and could be subject to enforcement action
DroppedRisks Related to Regulation of Our Industry and Products
We rely on third parties to manufacture our products. Failure of those third parties to provide us with sufficient quantities of our products, in compliance with applicable regulatory requirements, or to do so at acceptable quality levels or prices could adversely impact our business
New products in development may fail to achieve market acceptance.
DroppedRisks Related to Regulation of Our Industry and Products
Any of these sanctions could result in higher than anticipated costs or lower than anticipated sales and have a material adverse effect on our reputation, business, financial condition and results of operations
Risks in managing new product and service introductions like Owlet360.
DroppedRisks Related to Regulation of Our Industry and Products
concerns, even if unfounded, could result in additional cost and liability to us, regulatory investigations or enforcement actions, litigation (including class actions), damage our reputation, and adversely affect our business and results of operations
Inventory management challenges leading to air freight costs and margin impact.
DroppedRisks Related to Regulation of Our Industry and Products
With respect to Dream Sock and Owlet Cam, we utilize a direct-to-consumer model where consumers purchase our products directly from us or one of our retailers. Currently, these products are not covered or reimbursed by any third-party payor
DroppedRisks Related to Regulation of Our Industry and Products
Given the evolving nature of the healthcare industry and on-going healthcare cost reforms, the likelihood of success of our new commercial strategy is, and will continue to be, subject to changes in the level of third-party payor coverage and reimbursement for these products and services
DroppedRisks Related to Regulation of Our Industry and Products
products, add greater testing lead-times for product introductions or have other similar effects. Moreover, certain laws, including regarding the remediation of hazardous materials, can impose liability regardless of fault or legality of actions, including the classification of materials at the time of disposal
DroppedRisks Related to Regulation of Our Industry and Products
Changing laws and increasingly complex corporate governance and public disclosure requirements could have an adverse effect on our business and operating results
Distributors and retail customers experiencing financial difficulties.
DroppedRisks Related to Regulation of Our Industry and Products
Changes in the regulation of the internet could adversely affect our business
DroppedRisks Related to Our Common Stock and Warrants
The price of our common stock and warrants may be volatile
DroppedRisks Related to Our Common Stock and Warrants
favorable to us, or at all. If the price of our common stock is low or volatile, we may not be able to acquire other companies or fund a joint venture project using our stock as consideration
DroppedRisks Related to Our Common Stock and Warrants
Our bylaws provide that the state or federal courts located within the State of Delaware are the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees
DroppedRisks Related to Our Common Stock and Warrants
may be initiated by holders of the warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with us

Reworded

100% rewrittenRisks Related to Regulation of Our Industry and Products
If any of these items were to occur, it would harm our reputation and adversely affect our business, financial condition and results of operations
Expanded to specify that contract manufacturers must maintain quality systems and meet retailer ethical sourcing audits.
93% rewrittenRisks Related to Our Business and Operations
Changes in tax laws may impact our future financial position and results of operations
Updated to reference the One Big Beautiful Bill Act of 2025 and 100% accelerated depreciation deductions.
92% rewrittenRisks Related to Our Securities
We are a “smaller reporting company" and the reduced disclosure requirements applicable to smaller reporting companies may make our securities less attractive to investors
Changed from emerging growth company status to smaller reporting company status under the Exchange Act.
Was: We are an “emerging growth company” and a “smaller reporting company" and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock and warrants less attractive to investors
86% rewrittenRisks Related to Our Intellectual Property
We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful
Added that we may fail to detect unauthorized intellectual property use in a timely manner.
83% rewrittenRisks Related to Our Business and Operations
A substantial portion of our sales comes through a limited number of retailers
Top three customers represented 66.5% of revenue in 2025 compared to 58% in 2024, and added retailer order reduction risks.
80% rewrittenRisks Related to Our Business and Operations
Increases in tariffs, trade restrictions or taxes on our products could have an adverse impact on our operations
Updated tariff risks to reflect sourcing shifts to Thailand and Vietnam alongside China.
78% rewrittenRisks Related to Regulation of Our Industry and Products
Changes in and actual or perceived failures to comply with U.S. and foreign privacy and data protection laws, regulations and standards may adversely affect our business, operations and financial performance
Retained core privacy and data protection disclosures regarding health-related and infant personal information.
68% rewrittenRisks Related to Our Business and Operations
The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results
Shifted focus from general stakeholder ESG pressure to evolving and conflicting global sustainability regulations.
66% rewrittenRisks Related to Our Business and Operations
Adapting our production capacities to evolving patterns of demand is expensive, time-consuming and subject to significant uncertainties. We may not be able to adequately predict consumer trends and may be unable to adjust our production in a timely manner
55% rewrittenRisks Related to Our Securities
Our failure to meet the NYSE’s continued listing requirements could result in a delisting of our common stock
55% rewrittenRisks Related to Our Securities
You may only be able to exercise our public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of common stock from such exercise than if you were to exercise such warrants for cash
54% rewrittenRisks Related to Our Business and Operations
Our distributors or retail customers may experience financial difficulties, and we may not be able to collect our receivables, which could materially or adversely affect our profitability, cash flows, working capital and business operations
47% rewrittenRisks Related to Our Business and Operations
Our products and services rely on our mobile applications to function, and we depend on Apple’s App Store and the Google Play Store for distribution, updates, and continued availability of those applications
Was: Our products rely on mobile applications to function and we rely on Apple’s App Store and the Google Play Store for distribution of our mobile applications
41% rewrittenRisks Related to Our Business and Operations
If we are unable to continue to drive consumers to our website, it could adversely affect our revenue
40% rewrittenRisks Related to Regulation of Our Industry and Products
We may incur environmental and personal injury liabilities related to certain hazardous materials used in our operations
40% rewrittenRisks Related to Our Business and Operations
We are involved, and may become involved in the future, in disputes and other legal or regulatory proceedings that, if adversely decided or settled, could materially and adversely affect our business, financial condition and results of operations
40% rewrittenRisks Related to Our Business and Operations
We may acquire other businesses or form joint ventures or make investments in other companies or technologies that could negatively affect our operating results, increase our costs and liabilities, require significant management attention, and adversely affect our financial condition and results of operations
Was: We may acquire other businesses or form other joint ventures or make investments in other companies or technologies that could negatively affect our operating results, dilute our stockholders’ ownership, increase our debt or cause us to incur significant expense
39% rewrittenRisks Related to Our Securities
The redemption of our outstanding Convertible Preferred Stock or exercise of the WTI Redemption Option may require us to make a significant cash payment
38% rewrittenRisks Related to Regulation of Our Industry and Products
Regulatory reforms may impact our ability to develop and commercialize our products and services and technologies
37% rewrittenRisks Related to Our Business and Operations
We spend significant amounts on advertising and other marketing campaigns to acquire new customers, which may not be successful or cost effective
36% rewrittenRisks Related to Our Business and Operations
We rely on the experience and expertise of our senior management team, other key officers, our engineers, marketing and field sales team and other highly skilled personnel
36% rewrittenRisks Related to Our Securities
If securities or industry analysts issue an adverse or misleading opinion regarding our common stock or warrants, the price and trading volume of our common stock and warrants could decline
35% rewrittenRisks Related to Regulation of Our Industry and Products
Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market
33% rewrittenRisks Related to Our Business and Operations
We have experienced fluctuations in the growth of our business and anticipate this will continue. If we fail to manage our growth effectively, our business could be materially and adversely affected
32% rewrittenRisks Related to Regulation of Our Industry and Products
Promotion of any medical devices using claims that are off-label, unsubstantiated, false or misleading could subject us to substantial penalties and enforcement action
28% rewrittenRisks Related to Our Intellectual Property
We rely on third-party technology solutions, including software and software services, to support our IT infrastructure and in our products and services
23% rewrittenRisks Related to Our Business and Operations
Operations in international markets expose us to additional business, political, regulatory, operational, financial and economic risks
22% rewrittenRisks Related to Our Business and Operations
Any disruption of service at our third-party data and call centers or other cloud infrastructure services could interrupt or delay our ability to deliver our services to our customers
20% rewrittenRisks Related to Our Securities
Our corporate documents and Delaware law contain provisions that could discourage or delay a change in control, prevent attempts to replace or remove current management and reduce the market price of our securities
Was: Our corporate documents and Delaware law contain provisions that could discourage, delay or prevent a change in control of our company, prevent attempts to replace or remove current management and reduce the market price of our common stock and warrants

All 65 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business and Operations

01We have a limited operating history at our current scale, which makes it difficult to evaluate our current business model and future prospects and may increase the risk of your investmentNew
02We have a history of losses and may not achieve or sustain profitability. Operating losses could continue, which could materially and adversely affect our business, financial condition and results of operationsNew
03We have experienced fluctuations in the growth of our business and anticipate this will continue. If we fail to manage our growth effectively, our business could be materially and adversely affected33% rewritten
04We may need to raise additional capital in the future to support our operations and strategic plans. We have a history of losses from operations and negative cash flows from operations, and we may continue to incur operating lossesNew
05Our debt arrangements contain certain covenants and restrictions that may limit our flexibility in operating our business and any failure to satisfy those covenants and restrictions could adversely affect our business and financial condition
06Our products and services rely on our mobile applications to function, and we depend on Apple’s App Store and the Google Play Store for distribution, updates, and continued availability of those applications47% rewritten
07A substantial portion of our sales comes through a limited number of retailers83% rewritten
08We currently rely on single-source contract manufacturers for the assembly of our sock monitor and camera products, and disruptions or cost increases could adversely affect our businessNew
09Gray market activity, product diversion, and theft could harm our brand, customer experience, and results of operationsNew
10Our reliance on NAND flash memory for our Dream Sight and Dream Duo product lines exposes us to significant supply shortages and cost volatility that could adversely affect our margins and product availabilityNew
11Any disruption of service at our third-party data and call centers or other cloud infrastructure services could interrupt or delay our ability to deliver our services to our customers22% rewritten
12We rely on the experience and expertise of our senior management team, other key officers, our engineers, marketing and field sales team and other highly skilled personnel36% rewritten
13If we are unable to successfully develop, introduce, and drive adoption of new products, services, and enhancements, our business, financial condition and results of operations could be adversely affectedNew
14competing products, services or technologies. In addition, the introduction or announcement of newer products, services or enhancements may reduce demand for, or shorten the lifecycle of, our existing products and servicesNew
15If we do not successfully develop and commercialize innovative products and services that remain competitive, we could lose revenue opportunities and customers, and our ability to grow our business would be impaired, adversely affecting our financial condition and results of operationsNew
16We may acquire other businesses or form joint ventures or make investments in other companies or technologies that could negatively affect our operating results, increase our costs and liabilities, require significant management attention, and adversely affect our financial condition and results of operations40% rewritten
17We are involved, and may become involved in the future, in disputes and other legal or regulatory proceedings that, if adversely decided or settled, could materially and adversely affect our business, financial condition and results of operations40% rewritten
18Increases in tariffs, trade restrictions or taxes on our products could have an adverse impact on our operations80% rewritten
19Our distributors or retail customers may experience financial difficulties, and we may not be able to collect our receivables, which could materially or adversely affect our profitability, cash flows, working capital and business operations54% rewritten
20We are subject to risks associated with our distributors’ and retailers’ Owlet product inventories and sell-through to end consumers, which could adversely affect our revenues and results of operations
21Adapting our production capacities to evolving patterns of demand is expensive, time-consuming and subject to significant uncertainties. We may not be able to adequately predict consumer trends and may be unable to adjust our production in a timely manner66% rewritten
22The size and expected growth of our addressable market has not been established with precision and may be smaller than we estimate
23We spend significant amounts on advertising and other marketing campaigns to acquire new customers, which may not be successful or cost effective37% rewritten
24If we are unable to continue to drive consumers to our website, it could adversely affect our revenue41% rewritten
25Our success depends substantially on our reputation and brand
26Increased use of social media could create or amplify the effects of negative publicity and adversely affect sales and operating results
27Defects or quality issues associated with our products could adversely affect the results of our operations
28Our products must be manufactured, and services provided, in accordance with federal, state and foreign regulations, and we or any of our suppliers could be forced to recall products or terminate production or services if we fail to comply with these regulations
29In addition, as the provider of products with a subscription-based element, a variety of laws and regulations govern the ability of users to cancel subscriptions and auto-payment renewals. California’s automatic renewal law in particular has been the basis for both consumer class actions and government enforcement
30Operations in international markets expose us to additional business, political, regulatory, operational, financial and economic risks23% rewritten
31Our business and operations may suffer in the event of IT system failures, cyberattacks or deficiencies in our cybersecurity
32We are subject to a number of risks related to the credit extended by our manufacturing providers
33Changes in tax laws may impact our future financial position and results of operations93% rewritten
34Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
35We are subject to a number of risks related to the credit card and debit card payments we accept
36The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results68% rewritten
37We are subject to a series of risks regarding climate change

Risks Related to Regulation of Our Industry and Products

38Dream Sock and BabySat are regulated as medical devices by the FDA and other regulatory authorities, and we must maintain ongoing compliance with medical device requirements with respect to the design, manufacture, sale, marketing, distribution, and post-market oversight of such productsNew
39change, and the FDA could determine that one or more future products, product modifications, or new intended uses would require a different or more burdensome regulatory pathwayNew
40We rely on third party manufacturers and suppliers to produce our products in compliance with applicable quality system and regulatory requirements, and failure to do so could result in enforcement actions, recalls, and supply disruptionsNew
41If any of these items were to occur, it would harm our reputation and adversely affect our business, financial condition and results of operations100% rewritten
42Regulatory reforms may impact our ability to develop and commercialize our products and services and technologies38% rewritten
43Promotion of any medical devices using claims that are off-label, unsubstantiated, false or misleading could subject us to substantial penalties and enforcement action32% rewritten
44Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market35% rewritten
45the addition of new features, may increase our post-market compliance obligations or require additional regulatory assessment, and any failure to manage such changes appropriately could result in regulatory action or restrictions on sales or supportNew
46Changes in and actual or perceived failures to comply with U.S. and foreign privacy and data protection laws, regulations and standards may adversely affect our business, operations and financial performance78% rewritten
47We face the risk of product liability claims and the amount of insurance coverage we hold now or in the future may not be adequate to cover all liabilities we might incur
48We may incur environmental and personal injury liabilities related to certain hazardous materials used in our operations40% rewritten

Risks Related to Our Intellectual Property

49challenged or otherwise prove ineffective, we may be required to undertake costly product redesign efforts or discontinue certain products, or our competitive position may be harmedNew
50If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our competitive position may be harmed
51We rely on third-party technology solutions, including software and software services, to support our IT infrastructure and in our products and services28% rewritten
52The laws of foreign countries may not adequately protect our intellectual property rights
53If third parties claim that we infringe their intellectual property rights, we may incur liabilities and costs and may have to redesign or discontinue selling certain products and services
54We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful86% rewritten
55meaningfully enforce our intellectual property rights could harm our ability to compete and reduce demand for our products and servicesNew
56Our proprietary software may not operate properly, which could damage our reputation, give rise to claims against us, or divert application of our resources from other purposes, any of which could harm our business and operating results

Risks Related to Our Securities

57The market price of our common stock and warrants may be volatile. In addition, any trading market for our public warrants may be limited, and the market price of the public warrants (if any) may be more volatile and less liquid than the market for our common stockNew
58Our failure to meet the NYSE’s continued listing requirements could result in a delisting of our common stock55% rewritten
59If securities or industry analysts issue an adverse or misleading opinion regarding our common stock or warrants, the price and trading volume of our common stock and warrants could decline36% rewritten
60Concentration of ownership among our existing directors, executive officers and principal stockholders may prevent new investors from influencing significant corporate decisions
61Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain
62The redemption of our outstanding Convertible Preferred Stock or exercise of the WTI Redemption Option may require us to make a significant cash payment39% rewritten
63Our corporate documents and Delaware law contain provisions that could discourage or delay a change in control, prevent attempts to replace or remove current management and reduce the market price of our securities20% rewritten
64We are a “smaller reporting company" and the reduced disclosure requirements applicable to smaller reporting companies may make our securities less attractive to investors92% rewritten
65You may only be able to exercise our public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of common stock from such exercise than if you were to exercise such warrants for cash55% rewritten

Other Owlet 10-Ks

FY2024 10-K risk factors
70 risks
Owlet faces significant risks from historical operating losses and accumulated deficits totaling $268.2 million as of December 31, 2024. The company relies heavily on a limited number of retailers, with top three customers generating 58% of 2024 revenue. Products depend heavily on Apple and Google app stores, third-party manufacturing, and strict FDA medical device regulations.
Filed Mar 11, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.