Loan of the Week Snapshot #117

👓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

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