As filed with the Securities and Exchange Commission on April 26, 2023
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OWLET, INC.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
| Delaware | | 85-1615012 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) |
3300 North Ashton Boulevard, Suite 300
Lehi, Utah 84043
(844) 334-5330
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)
Kurt Workman
President and Chief Executive Officer
Owlet, Inc.
3300 North Ashton Boulevard, Suite 300
Lehi, Utah 84043
(844) 334-5330
(Address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Drew Capurro
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626
(714) 540-1235
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective on filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Large accelerated filer | ☐ | | Accelerated filer | ☐ |
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| Non-accelerated filer | ☒ | | Smaller reporting company | ☒ |
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| | | Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for comply with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ☐
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
DESCRIPTION OF CAPITAL STOCK
General
The following description summarizes some of the terms of our second amended and restated certificate of incorporation (the “certificate of incorporation”) and our amended and restated bylaws (“bylaws”) and the General Corporation Law of the State of Delaware (“DGCL”). This description is summarized from, and qualified in its entirety by reference to, our certificate of incorporation and bylaws, each of which has been publicly filed with the SEC, as well as the relevant provisions of the DGCL.
Our purpose is to engage in any lawful act or activity for which corporations may be organized under the DGCL. Our authorized capital stock consists of 1,000,000,000 shares of Class A common stock, par value $0.0001 per share (“Common Stock”), and 100,000,000 shares of preferred stock, par value $0.0001 per share. As of the date of this prospectus, we have two classes of securities registered under Section 12 of the Exchange Act: Common Stock, and redeemable warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50, initially issued in the initial public offering of Sandbridge Acquisition Corporation or in a concurrent private placement. We have 30,000 shares of preferred stock issued and outstanding, all of which are designated as Series A Convertible Preferred Stock. Unless our board of directors (the “Board”) determines otherwise, we will issue all shares of our capital stock in uncertificated form.
Common Stock
Voting Rights
Holders of shares of our Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. The holders of Common Stock do not have cumulative voting rights in the election of directors. The holders of a majority of the voting power of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, will constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise required by law or provided by our certificate of incorporation. If, however, such quorum will not be present or represented at any meeting of the stockholders, the holders of a majority of the voting power present in person or represented by proxy, will have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum will be present or represented.
Dividend Rights
Declaration and payment of any dividend is subject to the discretion of our Board. The time and amount of dividends will be dependent upon, among other things, our business prospects, results of operations, financial condition, cash requirements and availability, debt repayment obligations, capital expenditure needs, contractual restrictions, covenants in the agreements governing current and future indebtedness, industry trends, the provisions of Delaware law affecting the payment of dividends and distributions to stockholders and any other factors or considerations our Board may regard as relevant.
Liquidation, Dissolution and Winding Up
Upon our liquidation, dissolution or winding up of our affairs, whether voluntary or involuntary, after payment or provision for payment of our debts and any other payments required by law and amounts payable upon shares of preferred stock ranking senior to the shares of Common Stock upon such dissolution, liquidation or winding up, if any, our remaining net assets will be distributed to the holders of shares of Common Stock upon such dissolution, liquidation or winding up, pro rata on a per share basis.
Other Matters
Holders of our Common Stock do not have preemptive, subscription, redemption or conversion rights. There are no redemption provisions or sinking fund provisions applicable to the Common Stock. The rights, powers, preferences and privileges of holders of the Common Stock are subject to those of the holders of any shares of our preferred stock that the Board of the Company may authorize and issue in the future.
Preferred Stock
Under the terms of our certificate of incorporation, the Board has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL.
The purpose of authorizing the Board to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of the outstanding voting stock. Additionally, the issuance of preferred stock may adversely affect the holders of Common Stock by restricting dividends on the Common Stock, diluting the voting power of the Common Stock or subordinating the liquidation rights of the Common Stock. As a result of these or other factors, the issuance of preferred stock could have an adverse impact on the market price of the Common Stock.
Authorized but Unissued Capital Stock
Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of the NYSE, which would apply if and so long as our Common Stock remains listed on the NYSE, require stockholder approval of certain issuances equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of Common Stock and certain other issuances specified in the rules of the NYSE. Additional shares that may be issued in the future may be used for a variety of corporate purposes, including future public offerings, to raise additional capital, or to facilitate acquisitions.
One of the effects of the existence of unissued and unreserved Common Stock may be to enable the Board to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise and thereby protect the continuity of management and possibly deprive stockholders of opportunities to sell their shares of Common Stock at prices higher than prevailing market prices.
The existence of authorized but unissued and unreserved Common Stock and preferred stock could make more difficult or discourage an attempt to obtain control of us.
Anti-takeover Effects of Our Certificate of Incorporation and Bylaws
Our certificate of incorporation and bylaws contain provisions that may delay, defer or discourage another party from acquiring control of us. We expect that these provisions, which are summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with the Board, which we believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give the Board the power to discourage acquisitions that some stockholders may favor.
Classified Board of Directors
As indicated below, our certificate of incorporation provides that the Board is divided into three classes of directors, with each class of directors being elected by our stockholders every three years. The classification of directors will have the effect of making it more difficult for stockholders to change the composition of the Board.
Special Meeting, Action by Written Consent and Advance Notice Requirements for Stockholder Proposals
Unless otherwise required by law, and subject to the rights, if any, of the holders of any series of preferred stock, special meetings of our stockholders, for any purpose or purposes, may be called only by or at the direction of (i) a majority of the Board, (ii) the chairperson of the Board, (iii) the Chief Executive Officer or (iv) the President. Unless otherwise required by law, written notice of a special meeting of stockholders, stating the time, place and purpose or purposes thereof, shall be given to each stockholder entitled to vote at such meeting, not less than 10 or
more than 60 days before the date fixed for the meeting. Business transacted at any special meeting of stockholders will be limited to the purposes stated in the notice.
In addition, our bylaws require advance notice procedures for stockholder proposals to be brought before an annual meeting of the stockholders, including the nomination of directors. Stockholders at an annual meeting may only consider the proposals specified in the notice of meeting or brought before the meeting by or at the direction of the Board, or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered a timely written notice in proper form to our secretary, of the stockholder’s intention to bring such business before the meeting.
These provisions could have the effect of delaying until the next stockholder meeting any stockholder actions, even if such actions are favored by the holders of a majority of our outstanding voting securities.
Amendment to Certificate of Incorporation and Bylaws
The DGCL provides generally that the affirmative vote of a majority of the outstanding stock entitled to vote on amendments to a corporation’s certificate of incorporation or bylaws is required to approve such amendment, unless a corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage.
Our certificate of incorporation provides that the following provisions therein may be amended, altered, repealed or rescinded only by the affirmative vote of the holders of at least 66 and 2/3% in voting power of all the then outstanding shares of Common Stock entitled to vote thereon as a class:
•the provisions regarding Owlet’s preferred stock;
•the provisions regarding the size, classification, appointment, removal and authority of the Board;
•the provisions prohibiting stockholder actions without a meeting;
•the provisions regarding calling special meetings of stockholders;
•the provisions regarding the selection of certain forums for certain specified legal proceedings between Owlet and its stockholders; and
•the provisions regarding the limited liability of directors of Owlet.
Our bylaws may be amended or repealed (A) by the affirmative vote of a majority of the entire Board then in office (subject to any bylaw requiring the affirmative vote of a larger percentage of the members of the Board) or (B) without the approval of the Board, by the affirmative vote of the holders of 66 and 2/3% of the outstanding voting stock of Owlet entitled to vote generally in an election of directors, voting together as a single class.
Business Combinations
Section 203 of the DGCL provides that if a person acquires 15% or more of the voting stock of a Delaware corporation, such person becomes an “interested stockholder” and may not engage in certain “business combinations” with the corporation for a period of three years from the time such person acquired 15% or more of the corporation’s voting stock, unless:
1.the board of directors approves the acquisition of stock or the merger transaction before the time that the person becomes an interested stockholder;
2.the interested stockholder owns at least 85% of the outstanding voting stock of the corporation at the time the merger transaction commences (excluding voting stock owned by directors who are also officers and certain employee stock plans); or
3.the merger transaction is approved by the board of directors and at a meeting of stockholders, not by written consent, by the affirmative vote of 2/3 of the outstanding voting stock which is not owned by the interested stockholder.
A Delaware corporation may elect in its certificate of incorporation or bylaws not to be governed by this particular Delaware law.
Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our voting stock.
Since we have not opted out of Section 203 of the DGCL, it applies to Owlet. As a result, this provision will make it more difficult for a person who would be an “interested stockholder” to effect various business combinations with Owlet for a three-year period. This provision may encourage companies interested in acquiring Owlet to negotiate in advance with the Board because the stockholder approval requirement would be avoided if the Board approves either the business combination or the transaction which results in the stockholder becoming an interested stockholder. These provisions also may have the effect of preventing changes in the Board and may make it more difficult to accomplish transactions which stockholders may otherwise deem to be in their best interests.
Election of Directors and Vacancies
The number of directors of the Board shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board. The Board is divided into three classes, designated Class I, II and III, each class of directors will be elected by our stockholders every three years. The Amended and Restated Stockholders Agreement, dated as of February 17, 2023 (the “Stockholders Agreement”), by and among the Company, Eclipse Ventures Fund I, L.P., Eclipse Continuity Fund I, L.P. and Eclipse Early Growth Fund I (together, “Eclipse”) also provides that, (a) until such time as Eclipse beneficially owns less than 20.0% of the total voting power entitled to elect directors, Eclipse shall be entitled to nominate two individuals (the “Eclipse Directors” and each, an “Eclipse Director”) and (b) from such time that Eclipse beneficially owns less than 20.0% of the total voting power entitled to elect directors and until Eclipse beneficially owns less than 10.0% of the total voting power entitled to elect directors, Eclipse will be entitled to nominate one Eclipse Director and, we will include the nominee selected by Eclipse as a director nominee in our proxy statement for our annual meeting each time directors from the class to which such nominee is assigned are up for election.
Under the bylaws, at all meetings of stockholders that call for the election of directors, a plurality of the votes properly cast will be sufficient to elect such directors to the Board.
Except as the DGCL or the Stockholders Agreement may otherwise require and subject to the rights, if any, of the holders of any series of preferred stock, in the interim between annual meetings of stockholders or special meetings of stockholders called for the election of directors and/or the removal of one or more directors and the filling of any vacancy in that connection, newly created directorships and any vacancies on the Board, including unfilled vacancies resulting from the removal of directors, may be filled only by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum, or by a sole remaining director. All directors will hold office until the expiration of their respective terms of office and until their successors will have been elected and qualified. A director elected or appointed to fill a vacancy resulting from the death, resignation or removal of a director or a newly created directorship will serve for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until his or her successor will have been elected and qualified.
Subject to the Stockholders Agreement and the rights, if any, of any series of preferred stock, any director may be removed from office only with cause and only by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock then entitled to vote at an election of directors. Subject to the terms and conditions of the Stockholders Agreement, in case the Board or any one or more directors should be so removed, new directors may be elected at the same time for the unexpired portion of the full term of the director or directors so removed.
In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by us, subject, nevertheless, to the provisions of the DGCL, our certificate of incorporation and to any bylaws adopted and
in effect from time to time; provided, however, that no bylaws so adopted will invalidate any prior act of the directors which would have been valid if such bylaws had not been adopted.
Notwithstanding the foregoing provisions, any director elected pursuant to the right, if any, of the holders of preferred stock to elect additional directors under specified circumstances will serve for such term or terms and pursuant to such other provisions as specified in the relevant certificate of designations related to the preferred stock.
Exclusive Jurisdiction of Certain Actions
Our bylaws require, to the fullest extent permitted by law, unless we consent in writing to the selection of an alternative forum, that derivative actions brought on our behalf, actions against any director, officer or stockholder of Owlet for breach of fiduciary duty, actions asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws, and actions asserting a claim against us governed by the internal affairs doctrine may be brought only in the Court of Chancery of the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to the personal jurisdiction of the state and federal courts in the State of Delaware and service of process on such stockholder’s counsel. Although we believe this provision benefits Owlet by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.
Section 22 of the Securities Act of 1933, as amended (the “Securities Act”), creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, both state and federal courts have jurisdiction to entertain such Securities Act claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our bylaws require that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for resolving any action asserting a claim arising under the Securities Act and, if brought in a court other than the federal district courts of the United States of America, the stockholder bringing the suit will be deemed to have consented to the personal jurisdiction of the federal district courts of the United States of America and service of process on such stockholder’s counsel. However, there is uncertainty as to whether a court would enforce such provision, and investors cannot waive compliance with federal securities laws and the rules and regulations thereunder.
The foregoing provisions will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
Limitations on Liability and Indemnification of Officers and Directors
Our certificate of incorporation limits the liability of our directors to the fullest extent permitted by the DGCL, and our bylaws provide that we will indemnify them to the fullest extent permitted by such law. We have entered into agreements to indemnify our directors, executive officers and other employees as determined by our Board. Under the terms of such indemnification agreements, we are required to indemnify each of our directors and officers, to the fullest extent permitted by the laws of the State of Delaware, if the indemnitee acted in good faith and in a manner the indemnitee reasonably believed to be in or not opposed to the best interests of Owlet. We must indemnify our officers and directors against all reasonable fees, expenses, charges and other costs of any type or nature whatsoever, including any and all expenses and obligations paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing to defend, be a witness or participate in any completed, actual, pending or threatened action, suit, claim or proceeding, whether civil, criminal, administrative or investigative, or establishing or enforcing a right to indemnification under the indemnification agreement. The indemnification agreements also require us, if so requested, to advance within 30 days of such request all reasonable fees, expenses, charges and other costs that such director or officer incurred, provided that such person will return any such advance if it is ultimately determined that such person is not entitled to
indemnification by us. Any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
Trading Symbol and Market
Our Common Stock is listed on NYSE under the symbol “OWLT.”
REGISTERED HOLDERS
This prospectus relates to the possible resale by certain of the Registered Holders from time to time of up to an aggregate of 171,428,550 shares of Common Stock, which consists of 61,224,484 shares are issuable upon the conversion of shares of Series A Preferred Stock to Common Stock and 110,204,066 shares of Common Stock issuable upon the exercise of warrants sold in the private placement described below. The term “Registered Holders” includes donees, pledgees, transferees or other successors in interest selling shares of Common Stock received after the date of this prospectus from a Registered Holder as a gift, pledge, partnership distribution or other transfer.
On February 17, 2023, we entered into Investment Agreements (the “Investment Agreement”) with the Registered Holders, pursuant to which we issued and sold to the Registered Holders (i) an aggregate of 30,000 shares of our Series A Convertible Preferred Stock, par value $0.0001 per share, and (ii) warrants to purchase an aggregate of 110,204,066 shares of Common Stock, par value $0.0001 per share, for an aggregate purchase price of $30.0 million. On July 15, 2021, we entered into the Amended and Restated Registration Rights Agreement with certain of the Registered Holders, which governs certain registration rights of certain Registered Holders.
The following table and footnote disclosure following the table sets forth information concerning the shares of Common Stock that may be offered from time to time by each Registered Holder, the nature of any position, office or other material relationship, if any, that each Registered Holder has had within the past three years with us or with any of our predecessors or affiliates and the number of shares of our Common Stock beneficially owned by each Registered Holder before this offering. The number of shares beneficially owned by each Registered Holder is determined under rules issued by the SEC. Under these rules, beneficial ownership includes any shares as to which the Registered Holder has sole or shared voting power or investment power. Percentage ownership is based on 117,465,938 shares of Common Stock outstanding as of April 3, 2023. In computing the number of shares beneficially owned by a Registered Holder and their percentage ownership, shares of Common Stock subject to options, warrants or other rights held by such Registered Holder that are currently exercisable or will become exercisable within 60 days of April 3, 2023 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other Registered Holder. For purposes of this table, we have assumed that the Registered Holders will have sold all of the securities covered by this prospectus upon the completion of the offering (including all shares of Common Stock issuable upon exercise of the warrants). Each of the Registered Holders listed has sole voting and investment power with respect to the shares beneficially owned by the Registered Holder unless noted otherwise.
The information in the following table has been provided to us by or on behalf of the Registered Holders and the Registered Holders may have sold, transferred or otherwise disposed of all or a portion of their securities after the date on which they provided us with information regarding their securities. A Registered Holder may sell all, some or none of its securities in this offering. See “Plan of Distribution.”
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| | Common Stock
Beneficially Owned
Before this Offering | | Maximum Number of
Shares of Common
Stock to be Sold Pursuant
to this Prospectus | | Common Stock Beneficially Owned Upon Completion of this Offering |
| Registered Holder | | Number | | Percentage | | Number | | Number | | Percentage |
Eclipse Early Growth Fund I, L.P. (1) | | 143,920,901 | | | 49.8 | % | | 115,428,569 | | | 28,492,332 | | | 24.3 | % |
Trilogy Equity Partners, LLC (2) | | 24,531,139 | | | 8.5 | % | | 15,525,711 | | | 9,005,428 | | | 7.7 | % |
Kurt Workman (3) | | 7,495,427 | | | 2.6 | % | | 2,857,142 | | | 4,638,285 | | | 4.0 | % |
John Frankel (4) | | 5,018,129 | | | 1.7 | % | | 1,142,856 | | | 3,875,273 | | | 3.3 | % |
John Stanton and Theresa Gillespie, TIC (5) | | 7,102,326 | | | 2.5 | % | | 4,188,570 | | | 2,913,756 | | | 2.5 | % |
Litespeed Master Fund, LTD. (6) | | 7,332,859 | | | 2.5 | % | | 5,714,284 | | | 1,618,575 | | | 1.4 | % |
Walleye Opportunities Master Fund Ltd (7) | | 12,899,794 | | | 4.5 | % | | 12,857,140 | | | 42,654 | | | * |
The Melton 2020 Irrevocable Trust (8) | | 8,571,427 | | | 3.0 | % | | 8,571,427 | | | — | | | — | |
John Kim (9) | | 2,889,262 | | | 1.0 | % | | 2,857,142 | | | 32,120 | | | * |
Cedar Holdings MGMT LLC (10) | | 1,828,571 | | | * | | 1,428,571 | | | 400,000 | | | * |
Peter Thomsen Trust #2 (11) | | 328,762 | | | * | | 142,856 | | | 185,906 | | | * |
Samuel Thomsen Trust #2 (12) | | 328,762 | | | * | | 142,856 | | | 185,906 | | | * |
Oliver Frankel (13) | | 571,426 | | | * | | 571,426 | | | — | | | — | |
__________________
*Less than one percent.
(1)Based on information included in the Schedule 13D/A filed with the SEC on February 27, 2023 by Eclipse Continuity GP I, LLC, Eclipse Continuity Fund I, L.P., Eclipse Ventures GP I, LLC, Eclipse Ventures Fund I, L.P., Eclipse Early Growth GP I, LLC, Eclipse Early Growth Fund I, L.P., (together, the “Eclipse Entities”) and Lior Susan, our Chairman of the Board. Includes (i) 41,224,489 shares of Common Stock that would be issued upon the conversion of Series A Convertible Preferred Stock and (ii) 74,204,080 shares of Common Stock that would be issued upon the exercise of the warrant purchased by Eclipse Early Growth Fund I, L.P. pursuant to the Investment Agreement. Pursuant to the transaction documents executed in connection with the Investment Agreement, the Eclipse entities may not convert its Series A Convertible Preferred stock or exercise its warrant, as applicable, to the extent such action would result in beneficial ownership in excess of 29.99% of our outstanding Common Stock, until our stockholders approve such ownership in excess of 29.99% at a stockholder meeting. The principal place of business for the foregoing entities is 514 High Street, Suite 4, Palo Alto, California 94301.
(2)Based on information included in the Schedule 13D/A filed with the SEC on February 23, 2023 by Trilogy Equity Partners, LLC. The principal business address for the foregoing entity is 155 108th Avenue N.E., Suite 400, Bellevue, Washington 98004. Amy McCullough, a member of our Board, is the President and a Manager of Trilogy Equity Partners, LLC. Ms. McCullough disclaims beneficial ownership of the shares held by Trilogy Equity Partners, LLC, except to the extent of her pecuniary interest therein, if any.
(3)Based on information included in the Schedule 13D filed with the SEC on February 27, 2023 by Kurt Workman, our President and Chief Executive Officer and a member of our Board. Includes 22,012 shares of Common Stock issuable upon exercise of options outstanding as of or within 60 days of April 3, 2023. The business address for Kurt Workman is 3300 North Ashton Boulevard, Suite 300, Lehi, Utah 84043.
(4)Includes (i) 408,163 shares of Common Stock that would be issued upon the conversion of Series A Convertible Preferred Stock, (ii) 734,693 shares of Common Stock that would be issued upon the exercise of the warrant purchased by Mr. Frankel pursuant to the Investment Agreement, (iii) 204,172 shares of Common Stock held by Mr. Frankel through his Pension account, (iv) 100,000 shares of Common Stock that would be issued upon the exercise of the warrant purchased by Mr. Frankel through his Pension account, (v) 2,935,481 shares of Common Stock held by ff Rose Venture Capital Fund, L.P., whose general partner Mr. Frankel is the sole Manager (vi) 485,620 shares of Common Stock held by ff Burgundy Venture Capital Fund, L.P., whose general partner Mr. Frankel is the sole Manager (vii) 85,000 shares of Common Stock held by Julia Frankel, Mr. Frankel’s spouse, in a Roth IRA, and (viii) 65,000 shares of Common Stock that would be issued upon the exercise of a warrant previously purchased by Julia Frankel in a Roth IRA.
(5)Based on information included in the Schedule 13G filed with the SEC on February 27, 2023 by John Stanton and Theresa Gillespie. The principal business address for John Stanton and Theresa Gillespie is P.O. Box 465, Medina, Washington 98039.
(6)Includes (i) 2,040,816 shares of Common Stock that would be issued upon the conversion of Series A Convertible Preferred Stock,(ii) 3,673,468 shares of Common Stock that would be issued upon the exercise of the warrant purchased by Litespeed Master Fund, LTD. pursuant to the Investment Agreement, (iii) 1,618,496 shares of Common Stock held by Litespeed Master Fund, LTD., and (iv) 79 shares of Common Stock that would be issued upon the exercise of a warrant previously purchased by Litespeed Master Fund, LTD.
(7)Includes (i) 4,591,836 shares of Common Stock that would be issued upon the conversion of Series A Convertible Preferred Stock, (ii) 8,265,304 shares of Common Stock that would be issued upon the exercise of the warrant purchased by Walleye Opportunities Master Fund Ltd pursuant to the Investment Agreement, and (iii) 42,654 shares of Common Stock that would be issued upon the exercise of the warrant previously purchased by Walleye Opportunities Master Fund Ltd. Pursuant to the transaction documents executed in connection with the Investment Agreement, Walleye Opportunities Master Fund Ltd. may not convert its Series A Convertible Preferred Stock or exercise its
warrant, as applicable, to the extent such action would result in beneficial ownership in excess of 4.99% of the Company’s outstanding Common Stock at any time.
(8)Includes (i) 3,061,224 shares of Common Stock that would be issued upon the conversion of Series A Convertible Preferred Stock and (ii) 5,510,203 shares of Common Stock that would be issued upon the exercise of the warrant purchased by The Melton 2020 Irrevocable Trust pursuant to the Investment Agreement.
(9)Includes (i) 1,020,408 shares of Common Stock that would be issued upon the conversion of Series A Convertible Preferred Stock and (ii) 1,836,734 shares of Common Stock that would be issued upon the exercise of the warrant purchased by John Kim, a member of our Board, pursuant to the Investment Agreement.
(10)Includes (i) 510,204 shares of Common Stock that would be issued upon the conversion of Series A Convertible Preferred Stock, (ii) 918,367 shares of Common Stock that would be issued upon the exercise of the warrant purchased by Cedar Holdings MGMT LLC pursuant to the Investment Agreement, and (iii) 400,000 shares of Common Stock held by Cedar Holdings MGMT LLC.
(11)Based on information included in the Schedule 13G filed with the SEC on February 27, 2023 by John Stanton, the sole trustee. The principal business address for John Stanton is P.O. Box 465, Medina, Washington 98039.
(12)Based on information included in the Schedule 13G filed with the SEC on February 27, 2023 by John Stanton, the sole trustee. The principal business address for John Stanton is P.O. Box 465, Medina, Washington 98039.
(13)Includes (i) 204,081 shares of Common Stock that would be issued upon the conversion of Series A Convertible Preferred Stock and (ii) 367,345 shares of Common Stock that would be issued upon the exercise of the warrant purchased by Mr. Frankel pursuant to the Investment Agreement.
PLAN OF DISTRIBUTION
The Registered Holders may from time to time offer some or all of the shares of Common Stock covered by this prospectus. To the extent required, this prospectus may be amended and supplemented from time to time to describe a specific plan of distribution. The Registered Holders will not pay any of the costs, expenses and fees in connection with the registration of the shares covered by this prospectus, but they will pay any and all underwriting discounts, selling commissions and similar charges attributable to sales of the shares. We will not receive any proceeds from the sale of the shares of Common Stock covered hereby. To the extent warrants are exercised for cash, we will receive the exercise price thereof. The Registered Holders may sell some or all of the shares of Common Stock covered by this prospectus from time to time or may decide not to sell any of the shares of Common Stock covered by this prospectus. The Registered Holders will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related to the then-current market price or in negotiated transactions. The Registered Holders may dispose of their shares by one or more of, or a combination of, the following methods:
•distributions to members, partners, stockholders or other equityholders of the Registered Holders;
•purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus;
•ordinary brokerage transactions and transactions in which the broker solicits purchasers;
•block trades in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
•an over-the-counter distribution in accordance with the rules of the NYSE;
•through trading plans entered into by a Registered Holder pursuant to Rule 10b5-1 under the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans;
•to or through underwriters or broker-dealers;
•in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents;
•in privately negotiated transactions;
•in options transactions;
•through a combination of any of the above methods of sale; or
•any other method permitted pursuant to applicable law.
In addition, any shares that qualify for sale pursuant to Rule 144 promulgated under the Securities Act, or Rule 144, may be sold under Rule 144 rather than pursuant to this prospectus. A Registered Holder that is an entity may elect to make an in-kind distribution of Common Stock to its members, partners, stockholders or other equityholders pursuant to the registration statement of which this prospectus forms a part by delivering a prospectus. To the extent that such members, partners, stockholders or other equityholders are not affiliates of ours, such members, partners, stockholders or other equityholders would thereby receive freely tradable shares of Common Stock pursuant to a distribution pursuant to the registration statement of which this prospectus forms a part.
To the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution. In connection with distributions of the shares or otherwise, the Registered Holders may enter into hedging transactions with broker-dealers or other financial institutions. In connection with such transactions, broker-dealers or other financial institutions may engage in short sales of shares of Common Stock in the course of hedging the positions they assume with Registered Holders. The Registered Holders may also sell shares of Common Stock short and redeliver the shares to close out such short positions. The Registered Holders may also enter into option or other transactions with broker-dealers or other financial institutions that require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). The Registered Holders may also pledge shares to a broker-dealer or other financial institution, and, upon a default, such broker-dealer or other financial institution, may effect sales of the pledged shares pursuant to this prospectus (as supplemented or amended to reflect such transaction).
A Registered Holder may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by any Registered Holder or borrowed from any Registered Holder or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from any Registered Holder in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement (or a post-effective amendment). In addition, any Registered Holder may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
In effecting sales, broker-dealers or agents engaged by the Registered Holders may arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts or concessions from the Registered Holders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the Registered Holders and any broker-dealers who execute sales for the Registered Holders may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. Any profits realized by the Registered Holders and the compensation of any broker-dealer may be deemed to be underwriting discounts and commissions.
In order to comply with the securities laws of certain states, if applicable, the shares must be sold in such jurisdictions only through registered or licensed brokers or dealers.
We have advised the Registered Holders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the Registered Holders and their affiliates. In addition, we will make copies of this prospectus available to the Registered Holders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Registered Holders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, a prospectus supplement will be distributed that will set forth the number of shares being offered and the terms of the offering, including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter, any discount, commission and other item constituting compensation, any discount, commission or concession allowed or reallowed or paid to any dealer, and the proposed selling price to the public.