F-1: Wearable Devices Ltd. Announces Proposed Public Offering of Ordinary Shares and Pre-Funded Warrants

Wearable Devices Ltd. plans to offer up to 12,000,000 ordinary shares and pre-funded warrants in a firm commitment public offering.

Summary

• Wearable Devices Ltd. has filed a registration statement for a proposed public offering.
• The offering includes up to 12,000,000 ordinary shares and pre-funded warrants.
• Pre-funded warrants are offered to purchasers who would otherwise exceed beneficial ownership limits of 4.99% or 9.99% of the company's outstanding ordinary shares.
• Each pre-funded warrant is immediately exercisable for one ordinary share at an exercise price of $0.001 per share.
• The purchase price of each pre-funded warrant will equal the price per share at which the ordinary shares are being sold to the public in this offering, minus $0.001.
• The company's ordinary shares and IPO warrants are listed on the Nasdaq Capital Market under the symbols WLDS and WLDSW, respectively.
• On March 27, 2024, the last reported sale price of the ordinary shares was $0.583 per share and $0.08 per warrant.
• The company is an emerging growth company and a foreign private issuer, subject to reduced public company reporting requirements.
• The company had revenues of $82 thousand in 2023 and $45 thousand in 2022, with comprehensive and net losses of $7.8 million and $6.5 million, respectively.
• The company intends to use the net proceeds from this offering for manufacturing the Mudra Band, marketing, research and development, sales and support of B2B customers, and for working capital and general corporate purposes.

Sentiment

Score: 4

Explanation: The sentiment is neutral to slightly negative. While the company highlights growth strategies and collaborations, the need for a capital raise, ongoing losses, and risks related to Nasdaq listing compliance and operations in Israel temper the outlook.

Positives

• The company has a collaboration agreement with Qualcomm Technologies, Inc.
• The company has a reseller agreement with WisePlus to scale its licensing program reach in South Korea and China.
• The Mudra Band is available for purchase on Amazon.
• The company intends to leverage its relationships with consumer electronics companies to sign software and hardware licenses and royalty contracts.
• The company intends to increase its focus on building relationships with corporations in Industry 4.0, wellness and digital health, and sports analytics.
• The company intends to monetize data derived from a combination of gestures that authenticates a user, identification of patterns of daily behavior, and monitoring of metrics and identification.

Negatives

• The company had net losses of $7.8 million in 2023 and $6.5 million in 2022.
• The company's auditor included an explanatory paragraph in its report regarding the company's ability to continue as a going concern.
• The company has been notified by The Nasdaq Stock Market LLC of its failure to comply with certain continued listing requirements and, if we are unable to regain compliance with all applicable continued listing requirements and standards of Nasdaq, our Ordinary Shares could be delisted from Nasdaq.
• The market price of the company's ordinary shares may be highly volatile and fluctuate substantially, which could result in substantial losses for purchasers of our Ordinary Shares and Pre-Funded Warrants in this offering.
• If you purchase Ordinary Shares and/or Pre-Funded Warrants in this offering, you will incur immediate and substantial dilution in the book value of your investment.

Risks

• The company's current officers and directors and holders of more than 5% of the company's ordinary shares will continue to be able to exert significant control over matters submitted to the company's shareholders for approval.
• The market price of the company's ordinary shares may be highly volatile and fluctuate substantially.
• Future sales of the company's ordinary shares could reduce the market price of the company's ordinary shares.
• The company may need to raise additional capital required to grow its business, and the company may not be able to raise capital on terms acceptable to the company or at all.
• There is no established public trading market for the pre-funded warrants being offered in this offering, and the company does not expect a market to develop for the pre-funded warrants.
• Conditions in Israel, including conditions affected by the recent attack by Hamas and other terrorist organizations and Israel's war against them, may affect the company's operations.

Future Outlook

The company intends to achieve a leading brand position for neural input technology and expand its operations to digital and wearable computers by offering a broad range of platform devices, introducing new features, use-cases, software applications, and services, integrating its Mudra technology into existing devices, further penetrating additional markets, expanding brand awareness, global distribution and drive sales of its products and services, and data monetization.

Industry Context

The company believes that its technology is setting the standard input interface for the Metaverse and intends to transform interaction and control of digital devices to be as natural and intuitive as real-life experiences.

Stakeholder Impact

• The offering will dilute existing shareholders' ownership.
• The company's ability to execute its growth strategy depends on the successful use of proceeds from the offering.
• The company's performance may be affected by political, economic, and military conditions in Israel.

Next Steps

• The company intends to continue introducing new features and services to increase user engagement and revenue.
• The company intends to leverage its strong relationships with multiple consumer electronics companies and brands to sign software and hardware licenses and royalty contracts.
• The company intends to increase its focus on building relationships with corporations in Industry 4.0, wellness and digital health, and sports analytics.
• The company intends to increase its marketing efforts to further expand global awareness of its brand and drive greater sales of its products and services.
• The company intends to monetize data derived from a combination of gestures that authenticates a user, identification of patterns of daily behavior, and monitoring of metrics and identification.

Key Dates

Keywords

Wearable Devices Ltd., ordinary shares, pre-funded warrants, public offering, Mudra Band, Nasdaq, neural input interface, B2B, B2C, licensing, Qualcomm, WisePlus, Israel