L.O.T.W. #117 - Owlet Baby Care - Sleeping like a baby post equity raise and debt refinance
Revolving Line provided by Mountain Ridge Capital; Term loan provided by WTI
Owlet, Inc. (Nasdaq: OWLT) refinances existing revolving and term loan facilities with a new $15 million revolver from Mountain Ridge and $15 million multi-tranche term loan from Western Technology Investment (WTI).
👓At a Glance
Borrower: Owlet Baby Care, Inc. ; Owlet, Inc. (Guarantor)
Lenders:
Revolving Line - ABL OPCO, LLC (Mountain Ridge Capital)
Term Loan - WTI
Deal Size:
Revolving Line - $15.0 million increasing to $20 million at first anniversary
Term Loan - $15.0 million
Structure:
Revolving Line - Senior secured subject to intercreditor agreement
Term Loan - Senior secured subject to intercreditor agreement
Use of Proceeds: Refinance existing line of credit provided by Silicon Valley Bank
Source: Press Release
📷Borrower Snapshot
Sector: Healthcare
Subsector: Healthcare Equipment and Supplies
Ownership: Public
Commercial Stage: Revenue generating; EBITDA (-) LTM
Business Overview: Owlet, Inc. is a digital health company focused on infant monitoring technology. Its flagship Smart Sock tracks heart rate, oxygen, and sleep trends in real time. Owlet is transitioning from consumer wellness to FDA-regulated medical devices.
⚙️Structure & Terms
Source: SEC 8-K
Revolving Line Commitment: $15 million expanding to $20 million at first anniversary
Borrowing Formula: 90% of Eligible Accounts plus 90% of OLV of Eligible Inventory plus lesser of a) 90% of OLV of In-transit Inventory or b) $5.0 million
Maturity: 36 months
Repayment: Principal due at Maturity
Rate: Variable and based on TTM EBITDA level; SOFR + 7.50% - 8.50% with 3.50% SOFR floor
Fees:
Commitment Fee: Not disclosed (Fee Letter)
Unused Fee: 0.50% per annum
Prepayment Fee: Not disclosed (Fee Letter)
Covenants:
Minimum Liquidity - $4.0 million
Min. EBITDA when Liquidity is below $9.0 million
Term Loan Commitment: $15 million ($10.0 million tranche 1; $5.0 million tranche 2)
Availability:
Tranche 1 - $7.5 million funded at close; $2.5 million avail. through December 31, 2024
Tranche 2 - $5.0 million available through August 15, 2025 and subject to performance to plan test (revenue and cash burn)
Repayment: Interest only through September 30, 2025, followed by twenty-seven months of equal monthly principal payments
Cash Rate: Fixed at time of loan draw; Prime + 3.50% with floor of 12.0%
PIK Rate: 2.5%
Prepayment Fee: Make-whole provision with discount if market cap. >$250 million
Commitment Fee: $50.0k
Documentation Fee: $50.0k
Financial Covenants: None