Owlet, Inc., a company specializing in measuring and controlling devices, has entered into a material definitive agreement, according to a recent 8-K filing with the Securities and Exchange Commission. On Wednesday, the Delaware-incorporated company, which trades on the New York Stock Exchange under the ticker NYSE:OWLT, announced it had entered into an underwriting agreement with Titan Partners Group LLC, a division of American Capital Partners, LLC.
Under the terms of the agreement, Owlet agreed to issue and sell approximately 3.1 million shares of its Class A common stock at a public offering price of $3.70 per share. The transaction, which closed today, resulted in gross proceeds of around $11.6 million before deducting underwriting discounts, commissions, and other estimated offering expenses.
In conjunction with the stock offering, Owlet also issued a warrant to American Capital Partners, LLC, an affiliate of the underwriter, as part of the underwriting compensation. This warrant allows the purchase of up to 125,405 shares of Owlet's common stock and becomes exercisable on March 13, 2025, at an exercise price of $4.63 per share.
The warrant, which has a five-year term from the initial exercise date, is subject to a 180-day lock-up agreement in compliance with Financial Industry Regulatory Authority (FINRA) rules, restricting the sale or transfer of the warrant or its underlying securities.
The shares were offered pursuant to Owlet's registration statement on Form S-3, which was filed on August 14, 2024, and declared effective by the SEC on August 23, 2024. A final prospectus supplement related to the offering was filed with the SEC on September 12, 2024.
The company has agreed to indemnify the underwriter against certain liabilities and to contribute to payments the underwriter may be required to make in connection with these liabilities. Additionally, Owlet's directors, executive officers, and certain stockholders have agreed to a 90-day lock-up period, during which they will not sell or transfer any common stock without the underwriter's written consent, subject to certain conditions outlined in the prospectus.
In other recent news, Owlet Inc. has reported significant developments. The company's second-quarter results showcased revenues of $20.7 million, surpassing the estimated $18.5 million. Owlet attributes this financial growth to a successful Amazon (NASDAQ:AMZN) Prime Day, a new partnership with AdaptHealth (NASDAQ:AHCO) Corp., and considerable international expansion. Additionally, Owlet has expanded the availability of its Dream Sock baby monitor in Europe, including Poland, Greece, and the Czech Republic.
Owlet also announced an expansion of its stock incentive plan by 400,000 shares and converted 15,721 shares of its Series A convertible preferred stock into 2,291,686 shares of Class A common stock. These strategic moves have helped the company surpass the New York Stock Exchange's global market capitalization requirement of $50 million.
For 2024, Owlet projects a revenue growth of approximately 40% and an expected net revenue between $37 million and $42 million in the second half of the year. The company's recent developments include a focus on driving adoption of Dream Sock and expanding into medical and healthcare channels.
InvestingPro Insights
As Owlet, Inc. navigates its recent underwriting agreement and public offering, InvestingPro data and insights can provide a clearer picture of the company's financial health and stock performance. Owlet's market capitalization currently stands at approximately $38.35 million, reflecting the scale of its operations within the industry. Despite a notable revenue growth of 23.52% over the last twelve months as of Q2 2024, the company's P/E ratio remains negative at -2.19, indicating that investors may have concerns about its profitability. This is further corroborated by an InvestingPro Tip that analysts do not anticipate Owlet will be profitable this year.
Investors should also be aware of the volatility in Owlet's stock price, which has seen a significant decline of over 22% in the last month. This aligns with another InvestingPro Tip highlighting the stock's substantial hit over the past week. Furthermore, Owlet does not currently offer a dividend, which might influence investment decisions for those seeking regular income from their stock holdings.
For those considering adding Owlet to their portfolio or seeking to understand the company's current position, additional InvestingPro Tips can be found on the platform, offering deeper insights into Owlet's financials and market performance. There are currently 9 additional tips available, providing valuable information to help investors make informed decisions.
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