Owlet, Inc.OWLT
Owlet, Inc. Fair Value Disclosure
Fair Value Measurements
The Company’s assets and liabilities measured and reported in the financial statements at fair value on a recurring basis were as follows:
| December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Balance | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 17,398 | $ | — | $ | — | $ | 17,398 | |||||||||||||||
| Total assets | $ | 17,398 | $ | — | $ | — | $ | 17,398 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| SBG Public Warrants | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| SBG Private Placement Warrants | — | — | — | — | |||||||||||||||||||
| Series A Warrants | — | — | 3,273 | 3,273 | |||||||||||||||||||
| Total liabilities | $ | — | $ | — | $ | 3,273 | $ | 3,273 | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Balance | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 8,223 | $ | — | $ | — | $ | 8,223 | |||||||||||||||
| Total assets | $ | 8,223 | $ | — | $ | — | $ | 8,223 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| SBG Public Warrants | $ | — | $ | — | $ | 5 | $ | 5 | |||||||||||||||
| SBG Private Placement Warrants | — | — | 2 | 2 | |||||||||||||||||||
| Series A Warrants | — | — | 20,750 | 20,750 | |||||||||||||||||||
| Series B Warrants | — | — | 4,586 | 4,586 | |||||||||||||||||||
| Total liabilities | $ | — | $ | — | $ | 25,343 | $ | 25,343 | |||||||||||||||
Money market funds are included within Level 1 of the fair value hierarchy because they are valued using quoted market prices.
The SBG Public Warrants and SBG Private Placement Warrants as of December 31, 2025 are presented as Level 3 measurements, relying on unobservable inputs reflecting the Company’s own assumptions. Level 3 measurements, which are not based on quoted prices in active markets, introduce a higher degree of subjectivity and may be more sensitive to fluctuations in stock price, volatility rates, and U.S. Treasury Bond rates.
The Company measured the fair value of both the SBG Public Warrants and the SBG Private Placement Warrants as of December 31, 2025 and December 31, 2024 using the Black-Scholes option pricing model with the following assumptions:
| SBG Common Stock Warrants - Black-Scholes Inputs | December 31, 2025 | December 31, 2024 | |||||||||
| OWLT stock price | $ | 16.19 | $ | 4.45 | |||||||
| Exercise price of warrants | $ | 161.00 | $ | 161.00 | |||||||
| Term in years | 0.54 | 1.54 | |||||||||
| Risk-free interest rate | 3.58 | % | 4.21 | % | |||||||
| Volatility | 80.00 | % | 90.00 | % | |||||||
The Series A Warrants presented as Level 3 measurements rely on unobservable inputs reflecting the Company’s own assumptions.
The Company measured the fair value of the Series A Warrants as of December 31, 2025 and December 31, 2024, using the Black-Scholes option pricing model with the following assumptions:
| Series A Warrants - Black-Scholes Inputs | December 31, 2025 | December 31, 2024 | |||||||||
| OWLT stock price | $ | 16.19 | $ | 4.45 | |||||||
| Exercise price of warrants | $ | 4.66 | $ | 4.66 | |||||||
| Term in years | 2.13 | 3.13 | |||||||||
| Risk-free interest rate | 3.48 | % | 4.28 | % | |||||||
| Volatility | 75.00 | % | 90.00 | % | |||||||
The Series B Warrants presented as Level 3 measurements rely on unobservable inputs reflecting the Company’s own assumptions.
The Company measured the fair value of the Series B Warrants as of December 31, 2024 using the Black-Scholes option pricing model with the following assumptions:
| Series B Warrants - Black-Scholes Inputs | December 31, 2024 | |||||||
| OWLT stock price | $ | 4.45 | ||||||
| Exercise price of warrants | $ | 7.71 | ||||||
| Term in years | 4.16 | |||||||
| Risk-free interest rate | 4.33 | % | ||||||
| Volatility | 90.00 | % | ||||||
The following table presents a reconciliation of the Company’s SBG Public Warrants, SBG Private Placement Warrants, Series A Warrants, and Series B Warrants (together, the “Level 3 Warrants”) measured at fair value on a recurring basis as of December 31, 2024 and December 31, 2025:
| Level 3 Warrants | |||||
| Balance as of December 31, 2023 | $ | 27,781 | |||
| Balance as of Issuance of Series B Warrants | 6,855 | ||||
| Balance as of Change in fair value included within common stock warrant liability adjustment | (9,293) | ||||
| Balance as of December 31, 2024 | 25,343 | ||||
| Change in fair value included within common stock warrant liability adjustment | 26,571 | ||||
| Exercise of common stock warrants | (1,757) | ||||
| Common stock warrants exchanged for equity | (46,884) | ||||
| Balance as of December 31, 2025 | $ | 3,273 | |||
There were no transfers between Level 1 and Level 2 in the periods reported. The SBG Public Warrants and SBG Private Placement Warrants were transferred into Level 3 in 2023, as discussed above.
Equity-Classified Warrants
The fair value of the Titan Warrants at issuance on September 11, 2024 was $382. The Company measured the fair value of the Titan Warrants at issuance on September 11, 2024, using the Black-Scholes option pricing model with the following assumptions:
| Titan Warrants - Black-Scholes Inputs | September 11, 2024 | ||||
| OWLT stock price | $ | 4.35 | |||
| Exercise price of warrants | $ | 4.63 | |||
| Term in years | 5.50 | ||||
| Risk-free interest rate | 3.47 | % | |||
| Volatility | 85.00 | % | |||
Mezzanine-Classified Redeemable Common Stock
As described in Note 6, the vested shares issued to the WTI Funds are contingently redeemable at the option of the holder during the put period and are recorded in mezzanine equity on the consolidated balance sheets. The vested redeemable shares of common stock were recorded at their fair value of $7.66 per share, which was an aggregate value of $4,308. The value of the redeemable shares of common stock was determined using a combination of the value of the Company's stock on the date of issuance and the theoretic value of a stand-alone put option valued using a Black-Scholes put option model discounted by a present value factor that considers the credit spread between an estimated Company specific discount rate and the risk-free rate of return. The valuation model used the following assumptions:
| Redeemable Common Stock - Valuation Inputs | September 11, 2024 | ||||
| Common stock value per share | $ | 4.35 | |||
| Put price | $ | 8.40 | |||
| Term in years | 5.00 | ||||
| Risk-free interest rate | 3.42 | % | |||
| Volatility | 85.00 | % | |||
| Credit spread | 9.27 | % | |||
| Present value discount | 63.49 | % | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 9, 2026 | Showing above |
| 2024 | Mar 11, 2025 | |
| 2023 | Mar 8, 2024 | |
| 2022 | Apr 6, 2023 | |
| 2021 | Mar 25, 2022 | |
| 2020 | Mar 25, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.