Form 4: Eclipse Funds Convert Warrants, Boost Owlet Stake

Eclipse Early Growth Fund I, L.P. converted Series A and Series B warrants into Owlet, Inc. common stock, significantly increasing its beneficial ownership.

Summary

• Eclipse Early Growth Fund I, L.P. (Eclipse EGF I) acquired 3,898,906 shares of Owlet, Inc. common stock on October 10, 2025.
• This acquisition resulted from the exchange of Series A and Series B convertible preferred stock warrants.
• Eclipse EGF I disposed of 5,300,291 Series A Warrants and 1,166,935 Series B Warrants in this transaction.
• The exchange ratios were approximately 0.61 shares of common stock per Series A warrant and 0.56 shares per Series B warrant.
• Following the transaction, Eclipse EGF I beneficially owns 5,665,669 shares of common stock.
• Other affiliated entities, Eclipse Ventures Fund I, L.P. and Eclipse Continuity Fund I, L.P., beneficially own 968,694 and 1,066,472 shares of common stock, respectively.
• Collectively, the Eclipse Funds beneficially own a total of 7,700,835 shares of Owlet, Inc. common stock.
• The transaction was exempted from Section 16(b) of the Securities Exchange Act of 1934 pursuant to Rule 16b-3.
• Lior Susan, a director of Owlet, Inc., is the sole managing member of the general partners of the Eclipse Funds, leading to the 'director by deputization' status for the reporting entities.

Sentiment

Score: 7

Explanation: The conversion of warrants into common stock by a significant institutional investor and 10% owner, Eclipse Funds, indicates a continued commitment to Owlet, Inc. and an increased direct equity stake. While not a fresh cash injection, it signals confidence in the company's long-term prospects.

Positives

• A significant institutional investor, Eclipse Early Growth Fund I, L.P., increased its direct common stock holdings in Owlet, Inc. by 3,898,906 shares.
• The conversion of warrants into common stock demonstrates a continued commitment to the company's equity by a major shareholder.
• The transaction was exempted from Section 16(b) liability, indicating compliance with regulatory frameworks for such conversions.

Risks

• The reporting persons (Eclipse Funds and their General Partners) disclaim beneficial ownership of the shares except to the extent of their respective pecuniary interests, if any, which is a standard disclaimer but highlights the indirect nature of ownership for some entities.

Future Outlook

NA

Management Comments

• Lior Susan, the sole Managing Member of each of Eclipse EG GP I, Eclipse I GP, and Eclipse Continuity GP, was elected to the board of directors of the Issuer as a representative of the Eclipse Funds.
• Each of Eclipse EG GP I, Eclipse I GP, and Eclipse Continuity GP and the Eclipse Funds is a director by deputization of the Issuer solely for purposes of Section 16 of the Act.
• Mr. Susan, due to his status as a director of the Issuer, files separate Section 16 reports.

Industry Context

This transaction represents a standard conversion of previously issued warrants into common equity by a significant institutional investor. It reflects a shift in the investor's holding structure from derivatives to direct equity, which is a common occurrence in the lifecycle of venture capital or private equity investments in public companies.

Corporate Governance

Related Party Transactions

• Eclipse Early Growth Fund I, L.P., a 10% owner and entity affiliated with director Lior Susan, exchanged warrants for common stock of Owlet, Inc. This constitutes a related party transaction due to the reporting persons' relationship with the issuer's board and significant ownership.

Stakeholder Impact

• Shareholders: Increased institutional ownership by a significant investor may be viewed positively, potentially signaling confidence in the company's future.
• Investors: The conversion of warrants into common stock by a major investor provides transparency regarding their direct equity exposure, which can inform investment decisions.

Next Steps

• Lior Susan, as a director of Owlet, Inc., will continue to file separate Section 16 reports for his direct holdings.

Key Dates

Recommendation

This Form 4 reports a conversion of existing warrants into common stock by a significant institutional investor. While it increases the investor's direct equity stake and signals continued commitment, it does not represent new capital injection into the company or a fresh investment decision based on new information. Therefore, it primarily confirms an existing investment thesis rather than prompting a change in investment strategy, warranting a 'hold' recommendation.

Keywords

Owlet, OWLT, Eclipse Funds, Warrant Conversion, Common Stock, Beneficial Ownership, Insider Transaction, Form 4, Equity Stake