Filed Pursuant to Rule 424(b)(5)
Registration No. 333-274841
PROSPECTUS SUPPLEMENT
(To Prospectus dated October 18, 2023)
4,444,444 Ordinary Shares
Wearable Devices Ltd.
This is a public
offering of 4,444,444 ordinary shares, NIS 0.01 par value per share, or the Ordinary Shares, of Wearable Devices Ltd., an
Israeli corporation. We are offering all of the Ordinary Shares offered by this prospectus on a firm commitment underwritten
basis.
Our Ordinary Shares and warrants
issued as part of our initial public offering, or the IPO Warrants, are listed on the Nasdaq Capital Market under the symbol “WLDS”
and “WLDSW,” respectively. On November 8, 2023, the last reported sale price of our Ordinary Shares and IPO Warrants on the
Nasdaq Capital Market was $0.92 per share and $0.12 per IPO Warrant, respectively.
On November 7, 2023, the aggregate
market value of our Ordinary Shares held by non-affiliates was approximately $12,372,340, based on 15,942,984 Ordinary Shares outstanding
and 11,350,771 shares held by non-affiliates and a per share price of $1.09 based on the closing sale price of our Ordinary Shares on
September 8, 2023, which is the highest closing sale price of our Ordinary Shares on Nasdaq within the prior 60 days. We have not offered
any securities pursuant to General Instruction I.B.5 of Form F-3 during the prior 12 calendar month period that ends on and includes the
date of this prospectus.
We are an emerging growth
company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and a “foreign private issuer”, as
defined in Rule 405 under the Securities Act of 1933, as amended, or the Securities Act, and are eligible for reduced public company reporting
requirements.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page S-7 of this prospectus supplement and
in the documents that are incorporated by reference into this prospectus supplement and the accompanying prospectus.
Neither the Securities
and Exchange Commission, or the SEC, nor any state or other foreign securities commission has approved nor disapproved these securities
or determined if this prospectus supplement and the accompanying prospectus are truthful or complete. Any representation to the contrary
is a criminal offense.
| |
Per Share | | |
Total | |
Public offering price | |
$ | 0.45 | | |
$ | 2,000,000 | |
Underwriting discounts and commissions (1) | |
$ | 0.0315 | | |
$ | 140,000 | |
Proceeds to us (before expenses) | |
$ | 0.4185 | | |
$ | 1,860,000 | |
| (1) | We
have agreed to reimburse the underwriter for certain expenses. See “Underwriting” on page S-16 of this prospectus supplement
for additional disclosures regarding underwriting discounts, commissions and estimated offering expenses. |
We have granted a 45-day option
to the underwriter to purchase up to an additional 666,666 Ordinary Shares from us solely to cover over-allotments, if any.
The underwriter expects to
deliver the Ordinary Shares to purchasers on or about November 13, 2023.
Aegis Capital Corp.
The date of this prospectus supplement is
November 9, 2023
Prospectus Supplement
Prospectus
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement
and the accompanying prospectus are part of a “shelf” registration statement on Form F-3 (File No. 333-274841) that was declared
effective by the SEC on October 18, 2023. Under this “shelf” registration process, we may, from time to time, sell any combination
of the securities described in the accompanying prospectus in one or more offerings up to a total amount of $30,000,000. You should read
this prospectus supplement, the accompanying prospectus, the documents incorporated by reference into this prospectus supplement and the
accompanying prospectus, and any free writing prospectus that we may authorize for use in connection with this offering in their entirety
before making an investment decision. You should also read and consider the information in the documents to which we have referred you
in the section of this prospectus supplement entitled “Where You Can Find Additional Information” and “Incorporation
of Certain Information by Reference.” These documents contain important information that you should consider when making your investment
decision.
This document is in two parts.
The first part is this prospectus supplement, which describes the specific terms of this offering and certain other matters and also adds
to and updates information contained in the accompanying prospectus and the documents incorporated by reference herein or therein. The
second part, the accompanying prospectus, including the documents incorporated by reference into the accompanying prospectus, provides
more general information. Generally, when we refer to this prospectus, we are referring to the combined document consisting of this prospectus
supplement and the accompanying prospectus. To the extent there is a conflict between the information contained in this prospectus supplement
and the information contained in the accompanying prospectus or any document incorporated by reference herein or therein that was filed
with the SEC before the date of this prospectus supplement, you should rely on the information in this prospectus supplement; provided
that if any statement in one of these documents is inconsistent with a statement in another document having a later date - for example,
a document incorporated by reference in the accompanying prospectus - the statement in the document having the later date modifies or
supersedes the earlier statement.
Unless
otherwise indicated, all references to “Company,” “we,” “our” and “Wearable Devices” refer
to Wearable Devices Ltd.
All
trademarks or trade names referred to in this prospectus are the property of their respective owners. Solely for convenience, the trademarks
and trade names in this prospectus are referred to without the ® and ™ symbols, but such references should not be construed
as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do
not intend the use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship
of us by, any other companies.
This
prospectus supplement and the accompanying prospectus includes statistical, market and industry data and forecasts which we obtained from
publicly available information and independent industry publications and reports that we believe to be reliable sources. These publicly
available industry publications and reports generally state that they obtain their information from sources that they believe to be reliable,
but they do not guarantee the accuracy or completeness of the information. Although we believe that these sources are reliable, we have
not independently verified the information contained in such publications.
References to “U.S.
dollars” and “$” are to currency of the United States of America, and references to “shekel,” “Israeli
shekel” and “NIS” are to New Israeli Shekels. References to “Ordinary Shares” are to our Ordinary Shares,
NIS 0.01 per share.
We report our financial statements
in accordance with generally accepted accounting principles in the United States, or U.S. GAAP.
We are not making offers
to sell or solicitations to buy our Ordinary Shares in any jurisdiction in which an offer or solicitation is not authorized or in which
the person making that offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make an offer or solicitation.
You should assume that the information in this prospectus supplement, the accompanying prospectus or any related free writing prospectus
is accurate only as of the date on the front of the document and that any information that we have incorporated by reference is accurate
only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus supplement or any
related free writing prospectus, or any sale of securities.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights
information contained elsewhere or incorporated by reference in this prospectus supplement and the accompanying prospectus and in the
documents we incorporate by reference. This summary does not contain all of the information that you should consider before deciding to
invest in our securities. You should read this entire prospectus supplement and the accompanying prospectus carefully, including the “Risk
Factors” sections contained in this prospectus supplement and the accompanying prospectus and our financial statements and the related
notes and the other documents incorporated by reference herein, as well as the information included in any free writing prospectus that
we have authorized for use in connection with this offering.
Our Company
We are a technology growth
company specializing in the development of AI (artificial intelligence)-powered touchless sensing wearables. Our wrist-worn devices capture
neural signals from the wrist to create an input interface that translates user intent into digital command. It allows the user to control
digital devices using subtle touchless finger movements and hand gestures. Since our technology was introduced to the market in 2014,
we have been working with both business to business, or B2B, and business to consumer, or B2C, customers as part of our push-pull strategy.
We are now in the transition phase from research and development to commercialization of our technology into B2B products. At the same
time, we have commenced commercial manufacturing of our first consumer product, the “Mudra Band”, which connects to the Apple
watch and allows touchless control for Apple ecosystem devices. It also offers the ability to seamlessly switch control between devices
such as iPhone, iPad, Mac computer, Apple TV, smart glasses, and other connected devices.
Our company’s vision
is to create a world in which the user’s hand becomes a universal input device for touchlessly interacting with technology. We believe
that our technology is setting the interface input standard for the Extended Reality (XR) experiences. According to an article “CES
2021: The Mudra Band and How Wearable Devices Defining the Future of Immersive Customer Experiences,” published in January 2021
by Futurum Research, the Mudra Band has the potential to bring a whole new level of accessibility and immersive experiences to the wearer
of the device. Moreover, according to the article, what sets the Mudra Band apart from similar technology is its add-on approach to interface
with existing commands, as opposed to fixing the technology into the controlled device. Further, we have generated insights based on dozens
of feedbacks we have received for our technology and learned about the preferred methods of users to produce commands with multiple digital
devices, and the Mudra Band incorporates those preferred methods. We intend to transform interaction and control of digital devices to
be as natural and intuitive as real-life experiences. We imagine a future in which humans can share skills, thoughts, emotions, and movements
with each other and with computers, using wearable interfaces and devices. We believe that neural-based interfaces will become as ubiquitous
to interact with wearable computing and digital devices in the near future as the touchscreen is a universal input method for smartphones.
Combining our own proprietary
sensors and AI algorithms into a stylish wristband, our Mudra platform enables users to control digital devices through subtle finger
and hand movements using comfortable and familiar gestures in relaxed body postures, without physical touch or contact. These digital
devices include consumer electronics, smart watches, smartphones, XR devices such as AR (augmented reality) glasses, VR (virtual reality)
glasses and headsets, televisions, personal computers and laptop computers, drones, robots, etc.
Mudra Inspire, our B2B development
kit product, started selling to B2B customers in 2018 as the first point of business engagement and contributed to our early-stage revenues.
At CES 2021, the Mudra Band for Apple Watch, our flagship B2C product, won Innovation Award Honoree and the Best Wearable Award. We have
commenced shipping of the Mudra Band to customers in September 2023.
Our early-stage revenues are
composed of sales of our Mudra Inspire and from pilot transactions with several B2B customers. In 2022 and 2021, we had revenues of $45
thousand and $142 thousand, respectively, and comprehensive and net loss of $6.5 million and $2.6 million, respectively.
Over 100 companies have purchased
our Mudra Inspire development kit, 30 of which are multinational technology companies. These companies are exploring various input and
control use-cases for their products, ranging over multiple countries and industry sectors, including consumer electronics manufacturers,
consumer electronics brands, electronic components manufacturers, IT (information technology) services and software development companies,
industrial companies, and utility providers. Our objective with these companies is to commercialize the Mudra technology by licensing
it for integration in the hardware and software of these companies’ products and services. We estimate that there will be a three-to-five-year
period from the time we are first introduced to a customer to signing a licensing agreement. As of November 9, 2023, we have not signed
a license agreement with any of these companies.
The core of our platform is
Mudra, which means “gesture” in Sanskrit language. Mudra– our Surface Nerve Conductance, or SNC, technology and wristband—tracks
neural signals on the user’s wrist skin surface, which our algorithms decipher to predict as gestures made by finger and hand movements.
The interface binds each gesture with a specific digital function, allowing users to input commands without physical touch or contact.
Mudra gestures are natural to perform, and gestures can be tailored per a user’s intent, desired function, and the controlled digital
device. Mudra can detect multiple gesture types, including hand movements, finger movements, and fingertip pressure gradations. In addition
to the control use-case, our Mudra technology and SNC sensor can be utilized in multiple monitoring use-cases where we can monitor neural
and hand movements for digital health purposes, sport analytics performance, and Industry 4.0 solutions.
Recent Business Developments
In May 2023, we announced
that our flagship consumer product, the Mudra Band for Apple Watch, is available for preorder at www.mudra-band.com. The Mudra Band, originally
designed for the touchless operation of the Apple Watch using neural signals, has since broadened product features with Air-Touch, which
enables users to operate products across Apple’s ecosystem of devices using intuitive subtle finger movements and hand gestures
without the need for physical touch. The latest features allow users to toggle and switch between connected devices with a seamless transition
between iPhone, iPad, Mac computer, and Apple TV devices, smart glasses, and various mobile gaming devices. In June 2023, we announced
that we have commenced commercial manufacturing of our anticipated Mudra Band for Apple Watch. In June 2023, we also launched the new
Mudra Band application in the Apple App Store and added an exclusive custom-designed Apple Watch Face for Mudra Band users. In July 2023,
we announced the completion of the development of our new bidirectional plug-in for Unity, a game engine supporting desktop, mobile, console,
VR and AR platforms, establishing a live communication channel between the Unity game engine and the Mudra Inspire neural input wristband.
Additionally, we also announced the launch of our licensing program for the B2B market in July 2023. The program provides for a royalty-based
license agreement where original equipment manufacturers will have the right to customize a reference design version of our award winning
Mudra gesture technology to meet the specific needs of their business. In August 2023, we announced that we have completed the first commercial
manufacturing batch of the Mudra Band for Apple Watch, our flagship product. This initial commercial manufacturing phase was specifically
geared toward fulfilling pre-order demand, and we expect to begin delivery in the upcoming weeks. In September 2023, we announced first
batch delivery of the Mudra Band to B2C customers. In October 2023, we entered a memorandum of understanding with a leading XR smart glasses
original equipment manufacturer for the Mudra B2B Licensing Program. In November 2023, we announced a new technology feature for the Mudra
Band which allows users to control their Apple TV device using touchless hand movements based on an imagined virtual Directional Pad,
or D-pad.
Our Growth Strategy
We intend to achieve a leading
brand position for neural input technology, and to expand our operations to digital and wearable computers. Key elements of our growth
strategy include:
|
● |
Offer
a broad range of platform devices. We believe everyone’s needs are unique, so we will offer our users a wide range of connected
devices to interact and control in multiple styles, form factors, and price points, to allow people to find the devices that fit
their lifestyles and goals. We believe that we can leverage the growing public acceptance and awareness of wearable neural technologies
and the rising adoption of wearable devices to market multiple Mudra-based consumer products. |
|
● |
Introduce
new features, use-cases, software applications, and services. We plan to continue introducing new features and services to increase
user engagement and revenue. For example, we are investing in building a diverse user-gesture data bank, which will enable us to
develop additional new gestures. It is our belief that the gestures should be natural for the user and tailored based on the use-case
and controlled device, instead of a “one size fits all” approach which forces the user to learn new interactions. In
addition to the control use-case, our Mudra technology and SNC sensor can be utilized in multiple monitoring use-cases where we can
monitor neural and hand movements for digital health purposes, sport analytics performance, and Industry solutions. The platform
serves multiple corporations, businesses and individuals in the form of customized mobile and computer applications with a broad
range of business models that include hardware sales, licensing, and Software-as-a-Service, or SaaS model. |
|
● |
Integrate
our Mudra technology into existing devices. We intend to leverage our strong relationships with multiple consumer electronics
companies and brands to sign software and hardware licenses and royalty contracts to make ourselves a fundamental input component
for all digital devices and platforms. We also believe our superior software and hardware integration ability to work with companies
will enable us to sign agreements with leading global and smaller companies for consumer devices and industry use-cases. |
|
● |
Further
penetrate the additional markets. We intend to increase our focus on building relationships with corporations in Industry 4.0,
wellness and digital health, and sports analytics. Our main advantage is the ability to continuously and securely track the user’s
engagement over lengthened periods of times and supply meaningful insights for employee performance and safety and the user’s
physiology. |
|
● |
Expand
brand awareness, global distribution and drive sales of our products and services. We intend to increase our marketing efforts
to further expand global awareness of our brand and drive greater sales of our products and services. The international markets represent
a significant growth opportunity for us, and we intend to expand sales of our products and services globally through select retailers
and strategic partnerships. |
|
● |
Data
monetization. Once we have a sufficiently large database, we intend 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. This will expand
our offerings related to data and user behavior, which can open multiple new markets and opportunities. |
Corporate Information
We are an Israeli corporation
based in Yokne’am Illit, Israel and were incorporated in Israel in 2014 under the name Wearable Devices Ltd. Our principal executive
offices are located at 5 Ha-Tnufa St., Yokne’am Illit, 2066736 Israel. Our telephone number in Israel is 972.4.6185670. Our website
address is www.wearabledevices.co.il. The information contained on, or that can be accessed through, our website is not part of this prospectus
supplement. We have included our website address in this prospectus supplement solely as an inactive textual reference.
Recent Development Regarding Nasdaq Compliance
On October 24, 2023, we received
a written notification from the Listing Qualifications Department of The Nasdaq Stock Market LLC, or Nasdaq, notifying us that we were
not in compliance with the minimum bid price requirement for continued listing on Nasdaq, as set forth under Nasdaq Listing
Rule 5550(a)(2), or the Minimum Bid Price Requirement, because the closing bid price of our Ordinary Shares
was below $1.00 per Ordinary Share for the previous 30 consecutive business days. We were granted 180 calendar days, or until April 22,
2024, to regain compliance with the Minimum Bid Price Requirement. We can regain compliance if, at any time during this
180-day period, the closing bid price of our Ordinary Shares is at least $1.00 for a minimum of ten consecutive business
days, in which case we will be provided with written confirmation of compliance and this matter will be closed. In the event that we do
not regain compliance after the initial 180-day period, we may then be eligible for an additional 180-day compliance period if we meet
the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, with the
exception of the Minimum Bid Price Requirement. In this case, we will need to provide written notice of our intention to
cure the deficiency during the second compliance period.
We intend to monitor the closing bid price of
our Ordinary Shares and may, if appropriate, consider implementing available options to regain compliance with the Minimum Bid Price Requirement,
including initiating a reverse stock split. If we do not regain compliance within the allotted compliance period(s), including any extensions
that may be granted, Nasdaq will provide notice that our Ordinary Shares will be subject to delisting from Nasdaq . At that time, we may
appeal Nasdaq’s determination to a hearings panel.
Implications of Being an Emerging Growth Company
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to,
and intend to, take advantage of certain exemptions from various reporting requirements applicable to other public companies that are
not “emerging growth companies” such as not being required to comply with the auditor attestation requirements of Section 404
of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. We could remain an “emerging growth company” for up to five
years from our initial public offering that occurred in 2022, or until the earliest of (a) the last day of the first fiscal year
in which our annual gross revenue exceeds $1.235 billion, (b) the date that we become a “large accelerated filer” as
defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market
value of our Ordinary Shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently
completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in nonconvertible debt during
the preceding three-year period.
Implications of being a Foreign Private Issuer
We are subject to the information
reporting requirements of the Exchange Act that are applicable to “foreign private issuers,” and under those requirements
we file reports with the SEC. As a foreign private issuer, we are not subject to the same requirements that are imposed upon U.S. domestic
issuers by the SEC. Under the Exchange Act, we are subject to reporting obligations that, in certain respects, are less detailed and less
frequent than those of U.S. domestic reporting companies. For example, we are not required to issue quarterly reports, proxy statements
that comply with the requirements applicable to U.S. domestic reporting companies, or individual executive compensation information that
is as detailed as that required of U.S. domestic reporting companies. We also have four months after the end of each fiscal year to file
our annual report with the SEC and are not required to file current reports as frequently or promptly as U.S. domestic reporting companies.
Our officers, directors and principal shareholders are exempt from the requirements to report transactions in our equity securities and
from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we are not
subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. In addition, as a foreign private issuer,
we are permitted to follow certain home country corporate governance practices instead of those otherwise required under the Nasdaq rules
for domestic U.S. issuers. These exemptions and leniencies will reduce the frequency and scope of information and protections available
to you in comparison to those applicable to a U.S. domestic reporting company. We intend to take advantage of the exemptions available
to us as a foreign private issuer during and after the period we qualify as an “emerging growth company.”
THE OFFERING
Ordinary
Shares offered by us |
|
4,444,444
shares. |
|
|
|
Ordinary
Shares to be outstanding immediately after this offering(1) |
|
20,387,428 Ordinary
Shares (or 21,054,094 Ordinary Shares if the underwriter exercises its option to purchase 666,666 additional Ordinary
Shares in full). |
|
|
|
Over-allotment
option |
|
We
have granted a 45-day option to the underwriter to purchase up to an aggregate of 666,666 additional
Ordinary Shares at the public offering price, less the underwriting discount. |
|
|
|
Offering
price |
|
$0.45
per share. |
|
|
|
Use
of proceeds |
|
We
expect to receive approximately $1.7 million in net proceeds from the sale of 4,444,444 Ordinary Shares in this offering, after
deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds
from the sale of the Ordinary Shares in this offering for working capital and general corporate purposes.
The
amounts and schedule of our actual expenditures will depend on multiple factors. As a result, our management will have broad discretion
in the application of the net proceeds of this offering. See “Use of Proceeds” on page S-12 of this prospectus supplement.
|
|
|
|
Risk
factors |
|
Investing
in our Ordinary Shares involves significant risks. Please read the information contained in or incorporated by reference under the
heading “Risk Factors” beginning on page S-7 of this prospectus supplement, and under similar headings in documents incorporated
by reference into this prospectus supplement and the accompanying prospectus. |
|
|
|
Nasdaq
Capital Market symbol |
|
Our
Ordinary Shares and IPO Warrants are listed on the Nasdaq Capital Market under the symbols “WLDS” and “WLDSW,”
respectively. |
The number of the Ordinary
Shares to be outstanding immediately after this offering as shown above assumes that all of the Ordinary Shares offered hereby are sold
and is based on 15,942,984 Ordinary Shares outstanding as of November 8, 2023. This number excludes:
|
● |
1,754,189
Ordinary Shares issuable upon the exercise of options allocated or granted to directors, employees and consultants under our share
incentive plan (including 120,000 Ordinary Shares issuable upon the exercise of options approved for issuance by our board of directors
but still subject to approval by shareholders at our 2023 annual general meeting of shareholders), at a weighted average exercise
price of $0.73, of which 1,109,394 were vested as of November 9, 2023; |
|
● |
22,205
Ordinary Shares issuable upon the exercise of warrants issued to a consultant, at an exercise price of $2.25, which are all vested
as of November 9, 2023, and an additional 23,640 Ordinary Shares issuable upon the exercise of warrants issued to an advisor, at
an exercise price of $4.23 per Ordinary Share; |
|
● |
1,061,637
Ordinary Shares reserved for future issuance under our 2015 Share Option Plan, or the 2015 Plan; |
|
● |
671,687
Ordinary Shares issuable upon the exercise of warrants issued to certain investors in April 2021 pursuant to their share purchase
agreements with us, at an exercise price of $5.29 per Ordinary Share; and |
|
● |
7,860,861
Ordinary Shares issuable upon the exercise of warrants to purchase up to 7,860,861 Ordinary Shares issued in our initial public
offering, or the IPO, and warrants to purchase up to 187,500 Ordinary Shares, issued to Aegis Capital Corp. in the IPO. |
Except as otherwise indicated,
all information in this prospectus supplement assumes no exercise of the outstanding options, or warrants described above.
RISK FACTORS
Investing
in our Ordinary Shares involves risks. Before deciding whether to invest in our Ordinary Shares, you should consider carefully the risk
factors discussed below and those contained in the section entitled “Item 3. Key Information - D. Risk Factors” contained
in our most recent Annual Report on Form 20-F as well as any amendment or update to our risk factors reflected in our subsequent filings
with the SEC. If any of the risks or uncertainties described in our SEC filings actually occurs, our business, financial condition, results
of operations or cash flow could be materially and adversely affected. This could cause the trading price of our Ordinary Shares to decline,
resulting in a loss of all or part of your investment. The risks and uncertainties we have described are not the only ones we face. Additional
risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business operations. The discussion
of risks includes or refers to forward-looking statements; you should read the explanation of the qualifications and limitations on such
forward-looking statements discussed elsewhere in this prospectus supplement and the accompanying prospectus.
Risks Related to our Financial Condition and Operations
Our financial statements for the six months
ended June 30, 2023, contained an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.
If we will have a going concern opinion in the future this could materially limit our ability to raise additional funds,
which could prevent us from obtaining new financing on reasonable terms or at all.
In part because as of June
30, 2023, we had incurred accumulated losses of approximately $17.3 million, our financial statements for the six months ended June 30,
2023, contained an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. These
events and conditions, along with other matters, indicated that a material uncertainty exists that may cast significant doubt on our
ability to continue as a going concern. To date, the Company has not generated significant revenues from its activities and
has incurred substantial operating losses. Management expects the Company to continue to generate substantial operating losses and to
continue to fund its operations primarily through the utilization of its current financial resources, sales of its products, and through
additional raises of capital. A going concern opinion could materially limit our ability to raise additional funds
through the issuance of equity or debt securities or otherwise in the future. Further financial statements may include an explanatory
paragraph with respect to our ability to continue as a going concern. Until we can generate significant recurring revenues,
we expect to satisfy our future cash needs through existing cash, debt or equity financing. Even if we complete this offering, we may
require additional financing in the future. We cannot be certain that additional funding will be available to us on acceptable terms,
if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for,
or commercialization efforts with respect to our products. This may raise substantial doubts about our ability to continue as a going concern.
Risks Related to This Offering and Investment in Our Securities
Future sales or other issuances of our Ordinary
Shares could depress the market for our Ordinary Shares.
Sales of a substantial number
of Ordinary Shares, or the perception by the market that those sales could occur, could cause the market price of our Ordinary Shares
to decline or could make it more difficult for us to raise funds through the sale of equity in the future.
In connection with this offering,
we, our directors and executive officers have entered into lock-up agreements for a period of 60 days following this offering, subject
to customary exceptions. See “Underwriting” beginning on page S-16 of this prospectus supplement. Upon expiration or earlier
release of the lock-up, we and our directors and executive officers may sell shares into the market, which could adversely affect the
market price of our Ordinary Shares.
Future issuances of Ordinary
Shares or any securities that are exercisable for or convertible into Ordinary Shares could further depress the market for our Ordinary
Shares, may have an adverse effect on the market price of our Ordinary Shares and will have a dilutive effect on our existing shareholders
and holders of Ordinary Shares. We expect to continue to incur research and development and general and administrative expenses and, to
satisfy our funding requirements, we will need to sell additional equity securities, which may include sales of significant amounts of
Ordinary Shares, which may be subject to registration rights and warrants with anti-dilutive protective provisions. The sale or the proposed
sale of substantial amounts of our Ordinary Shares or other equity securities in the public markets or in private transactions may adversely
affect the market price of our Ordinary Shares and our share price may decline substantially.
We may need to raise
additional capital required to grow our business, and we may not be able to raise capital on terms acceptable to us or at all. Raising
additional capital may cause dilution to our existing shareholders and may adversely affect the rights of existing shareholders.
Growing and operating our
business will require significant cash outlays and capital expenditures and commitments. If cash on hand and cash from operating activities
are not sufficient to meet our cash requirements, we will need to seek additional capital. We may need to raise additional capital through
a combination of private and public equity offerings (such as this offering), debt financings and collaborations, and strategic and licensing
arrangements. We may not be able to raise needed cash on terms acceptable to us or at all. Financing may be on terms that are dilutive
or potentially dilutive to our shareholders, as described below, and the prices at which new investors would be willing to purchase our
securities may be lower than the current price per share. The holders of new securities may also have rights, preferences, or privileges
which are senior to those of existing holders of Ordinary Shares. If new sources of financing are required, but are insufficient or unavailable,
we will be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow
our business.
To the extent that we raise
additional capital through the issuance of equity (such as this offering) or otherwise including through convertible debt securities,
your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights
as a shareholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take
certain actions, such as incurring debt, making capital expenditures or declaring dividends. If we raise additional funds through strategic
partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies
or product candidates or grant licenses on terms that are not favorable to us. If we are unable to raise additional funds through equity
(such as this offering) or debt financing when needed, we may be required to delay, limit, reduce or terminate our product development
or commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market
ourselves. Future sales of our Ordinary Shares or of securities convertible into our Ordinary Shares, or the perception that such sales
may occur, could cause immediate dilution and adversely affect the market price of our Ordinary Shares.
Management will have broad discretion as
to the use of the proceeds from this offering, and we may not use the proceeds effectively.
Our management will have broad
discretion in the allocation of the net proceeds of this offering and could use them for purposes other than those contemplated at the
time of this offering and as described in the section titled “Use of Proceeds.” Our management could spend the proceeds
in ways that you do not agree with or that do not improve our results of operations or enhance the value of our Ordinary Shares.
We have never paid cash dividends on our
share capital, and we do not anticipate paying any cash dividends in the foreseeable future.
We have never declared or
paid cash dividends, and we do not anticipate paying cash dividends in the foreseeable future. Therefore, you should not rely on an investment
in Ordinary Shares as a source for any future dividend income. Our board of directors has complete discretion as to whether to distribute
dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any,
will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any,
received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board
of directors. In addition, the Companies Law 5759-1999, or the Companies Law, imposes restrictions
on our ability to declare and pay dividends. See “Dividend Policy.”
If we fail to meet all applicable Nasdaq
requirements, Nasdaq could delist our Ordinary Shares, which could adversely affect the market liquidity of our Ordinary Shares and the
market price of our Ordinary Shares could decrease.
Nasdaq monitors our ongoing
compliance with its minimum listing requirements and if we fail to meet those requirements and cannot cure such failure in the prescribed
period of time, our Ordinary Shares could be subject to delisting from Nasdaq. In the event that our Ordinary Shares are delisted from
Nasdaq and are not eligible for quotation or listing on another market or exchange, trading of our Ordinary Shares could be conducted
only in the over-the-counter market such as the OTC Pink or the OTCQB. In such event, it could become more difficult to dispose of, or
obtain accurate price quotations for, our Ordinary Shares, and there would likely also be a reduction in our coverage by securities analysts
and the news media, which could cause the price of our ordinary shares to decline further. Also, it may be difficult for us to raise additional
capital if we are not listed on a major exchange.
On October 24, 2023, we received
a written notification from the Listing Qualifications Department of Nasdaq notifying us that we were not in compliance with the Minimum
Bid Price Requirement, because the closing bid price of our Ordinary Shares was below $1.00 per Ordinary Share for the previous 30 consecutive
business days. We were granted 180 calendar days, or until April 22, 2024, to regain compliance with the Minimum Bid Price Requirement.
We can regain compliance if, at any time during this 180-day period, the closing bid price of our Ordinary Shares is at least $1.00 for
a minimum of ten consecutive business days, in which case we will be provided with written confirmation of compliance and this matter
will be closed. However, Nasdaq may, in its discretion, require our Ordinary Shares to maintain a bid price of at least $1.00 for a period
in excess of ten consecutive business days, but generally no more than 20 consecutive business days, before determining that we have demonstrated
an ability to maintain long-term compliance. In the event that we do not regain compliance after the initial 180-day period, we may then
be eligible for an additional 180-day compliance period if we meet the continued listing requirement for market value of publicly held
shares and all other initial listing standards for Nasdaq, with the exception of the Minimum Bid Price Requirement. In this case, we will
need to provide written notice of our intention to cure the deficiency during the second compliance period.
We intend to monitor the closing
bid price of our Ordinary Shares and may, if appropriate, consider implementing available options to regain compliance with the Minimum
Bid Price Requirement, including initiating a reverse stock split. If we do not regain compliance within the allotted compliance period(s),
including any extensions that may be granted, Nasdaq will provide notice that our Ordinary Shares will be subject to delisting from Nasdaq.
At that time, we may appeal Nasdaq’s determination to a hearings panel.
There can be no assurances
that we will be able to regain compliance with the Minimum Bid Price Requirement or if we do later regain compliance with the Minimum
Bid Price Requirement, that we will be able to continue to comply with all applicable Nasdaq listing requirements now or in the future.
If we are unable to maintain compliance with these Nasdaq requirements, our Ordinary Shares will be delisted from Nasdaq.
In the event that our Ordinary
Shares are delisted from Nasdaq, as a result of our failure to comply with the Minimum Bid Price Requirement, or due to our failure to
continue to comply with any other requirement for continued listing on Nasdaq, and are not eligible for listing on another exchange, trading
in our Ordinary Shares could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities
such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price
quotations for, our Ordinary Shares, and it would likely be more difficult to obtain coverage by securities analysts and the news media,
which could cause the price of our Ordinary Shares to decline further. Also, it may be difficult for us to raise additional capital if
we are not listed on a national exchange.
Risks Related to Operations in Israel
We
conduct our operations in Israel. Conditions in Israel, including conditions affected by the recent attack by Hamas and
other terrorist organizations and Israel’s war against them, may affect our operations.
Our offices are located
in Yokne’am Illit, Israel, thus, political, economic, and military conditions in Israel may directly affect our business. On
October 7, 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks
on civilian and military targets. Hamas also launched extensive rocket attacks on the Israeli population and industrial centers
located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. Following the attack,
Israel’s security cabinet declared war against Hamas and the Israeli military began to call-up reservists for active duty. At
the same time, and because of the declaration of war against Hamas, the clash between Israel and Hezbollah in Lebanon has escalated
and there is a possibility that it will turn into a greater regional conflict in the future.
As of today, these events
have had no material impact on the Company’s operations. According to the recent guidelines of the Israeli government, the Company’s
offices are open and functioning as usual. However, if the war escalates and expands to the Northern border with Lebanon, the Israeli
government potentially will impose additional restrictions on movement and travel, and our management and employees’ ability to
effectively perform their daily tasks might be temporarily disrupted, which may result in delays in some of our projects.
The Company currently has
the supply of materials needed for its regular operations. While there may be some possible delays in supply, those are currently not
anticipated to be material to the Company’s operations. However, if the war continues for a significant amount of time, this situation
may change.
Any hostilities involving
Israel, terrorist activities, political instability or violence in the region, or the interruption or curtailment of trade or transport
among Israel and its trading partners could make it more difficult for us to raise capital, if needed in the future, and adversely affect
our operations and results of operations and the market price of our Ordinary Shares.
Our commercial insurance does
not cover losses that may occur as a result of an event associated with the security situation in the Middle East. Although the Israeli
government is currently committed to covering the reinstatement value of direct damages that are caused by terrorist attacks or acts of
war, we cannot assure you that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully
for damages incurred. Any losses or damages incurred by us could have a material adverse effect on our business, financial condition,
and results of operations.
Further, many Israeli citizens
are obligated to perform several days, and in some cases, more, of annual military reserve duty each year until they reach the age of
40 (or older for certain reservists) and, in the event of a military conflict, may be called to active duty. In response to the series
of attacks on civilian and military targets in October 2023, there have been significant call-ups of military reservists. Currently, only
a few of the Company’s employees have been called up to military service, none of whom are in management positions. However, if
the number of reservists in our Company increases and becomes significant, our operations could be disrupted by such call-ups.
Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions, could harm
our results of operations and the market price of our Ordinary Shares, and could make it more difficult for us to raise capital. Parties
with whom we do business may sometimes decline to travel to Israel during periods of heightened unrest or tension, forcing us to make
alternative arrangements when necessary, in order to meet our business partners face to face.
The intensity and duration of Israel’s
current war against Hamas is difficult to predict at this stage, as are such war’s economic implications on the Company’s
business and operations and on Israel’s economy in general. However, if the war extends for a long period of time or expands to
other fronts, such as Lebanon, Syria and the West Bank, our operations may be harmed.
It is currently not possible
to predict the duration or severity of the ongoing conflict or its effects on our business, operations and financial condition. The ongoing
conflict is rapidly evolving and developing, and could disrupt our business and operations, and adversely affect our ability to raise
additional funds or sell our securities, among other impacts.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement
and the accompanying prospectus contain forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E
of the Exchange Act of and the Private Securities Litigation Reform Act of 1995. Also, documents that we incorporate by reference into
this prospectus, including documents that we subsequently file with the SEC, contain and will contain forward-looking statements. Forward-looking
statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally
identify forward-looking statements as statements containing the words “may,” “will,” “could,” “should,”
“expect,” “anticipate” “objective,” “goal,” “intend,” “estimate,”
“believe,” “project,” “plan,” “assume” or other similar expressions, or negatives of those
expressions, although not all forward-looking statements contain these identifying words. All statements contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus regarding our objectives, plans and strategies, statements that
contain projections of results of operations or of financial condition, expected capital needs and expenses, statements relating to the
research, development, completion and use of our products, and all statements (other than statements of historical facts) that address
activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.
Important
factors that could cause actual results, developments, and business decisions to differ materially from those anticipated in these forward-looking
statements include, among other things:
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Our
financial statements for the six months ended June 30, 2023, contained an explanatory paragraph regarding substantial doubt about
our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all; |
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Surface
nerve conductance becoming the industry standard input method for wearable computing and consumer electronics; |
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our
ability to maintain and expand our existing customer base; |
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timing
of the shipment to early-booking orders of our Mudra Band; |
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our
ability to maintain and expand compatibility of our devices with a broad range of mobile devices and operating systems; |
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our
ability to maintain our business models; |
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our
ability to correctly predict the market growth; |
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our
ability to remediate material weaknesses in our internal control over financial reporting; |
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our
ability to retain our founders; |
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our
ability to maintain, protect, and enhance our intellectual property; |
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our
ability to raise capital through the issuance of additional securities; |
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the
impact of competition and new technologies; |
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general
market, political and economic conditions in the countries in which we operate; |
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projected
capital expenditures and liquidity; |
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changes
in our strategy; |
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our
ability to comply with the Nasdaq listing requirements; |
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the
overall global political and economic environment in the countries in which we operate including those related to recent unrest and
actual or potential armed conflict in Israel and other parts of the Middle East, such as the recent attack by Hamas and other terrorist
organizations from the Gaza Strip and Israel’s war against them; |
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litigation;
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those
factors referred to in “Risk Factors” above, as well as in “Item 3. Key Information — D. Risk
Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and
Prospects,” in our most recent Annual Report on Form 20-F generally, which is incorporated by reference into this prospectus
supplement. |
You should not place undue
reliance on our forward-looking statements because the matters they describe are subject to certain risks, uncertainties and assumptions,
including in many cases decisions or actions by third parties, that are difficult to predict. Our forward-looking statements are based
on the information currently available to us and speak only as of the date on the cover of this prospectus supplement, the accompanying
prospectus, or, in the case of forward-looking statements incorporated by reference, the date of the filing that includes the statement.
Over time, our actual results, performance or achievements may differ from those expressed or implied by our forward-looking statements,
and such difference might be significant and materially adverse to our security holders. We undertake no obligation to update publicly
any forward-looking statements, whether as a result of new information, future events or otherwise.
Please consider our forward-looking
statements in light of those risks as you read this prospectus supplement, the accompanying prospectus and the documents incorporated
by reference herein and therein.
USE OF PROCEEDS
We estimate the net proceeds
to us from the sale of the Ordinary Shares offered by us in this offering will be approximately $1.7 million after deducting the underwriting
discounts and commissions and our estimated offering expenses. If the underwriter’s over-allotment option to purchase additional
Ordinary Shares in this offering is exercised in full, we estimate that our net proceeds from this offering will be approximately $2.0 million,
after deducting estimated underwriting discounts and commissions and our estimated offering expenses.
We currently expect to use
the net proceeds from this offering for working capital and general corporate purposes.
Changing circumstances may
cause us to consume capital significantly faster than we currently anticipate. The amounts and timing of our actual expenditures will
depend upon numerous factors, including the progress of our global marketing and sales efforts, the development of our products and
the overall economic environment. Therefore, our management will retain broad discretion over the use of the proceeds from this offering.
We may ultimately use the proceeds for different purposes than what we currently intend. Pending any ultimate use of any portion of the
proceeds from this offering, if the anticipated proceeds will not be sufficient to fund all the proposed purposes, our management will
determine the order of priority for using the proceeds, as well as the amount and sources of other funds needed.
The amounts and timing of
our actual expenditures will depend upon numerous factors, including regulatory and competitive environment and other factors that management
believes are appropriate.
Pending our use of the net
proceeds from this offering, we may invest the net proceeds in a variety of capital preservation investments, including short-term, investment
grade, interest bearing instruments and U.S. government securities.
DIVIDEND POLICY
We have never declared or
paid any cash dividends on our Ordinary Shares and do not anticipate paying any cash dividends in the foreseeable future. Payment of cash
dividends, if any, in the future, will be at the discretion of our board of directors and will depend on then-existing conditions, including
our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our board
of directors may deem relevant.
The Companies Law imposes
further restrictions on our ability to declare and pay dividends. Under the Companies Law, we may declare and pay dividends only if, upon
the determination of our board of directors, there is no reasonable concern that the distribution will prevent us from being able to meet
the terms of our existing and foreseeable obligations as they become due. Under the Companies Law, the distribution amount is further
limited to the greater of retained earnings or earnings generated over the two most recent years legally available for distribution according
to our then last reviewed or audited financial statements, provided that the end of the period to which the financial statements relate
is not more than six months prior to the date of distribution. In the event that we do not meet such earnings criteria, we may seek the
approval of a court in order to distribute a dividend. The court may approve our request if it is convinced that there is no reasonable
concern that the payment of a dividend will prevent us from satisfying our existing and foreseeable obligations as they become due.
CAPITALIZATION
The following table sets forth
our cash and cash equivalents and our capitalization as of June 30, 2023:
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on
an actual basis; and |
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on an as adjusted basis to give effect to the sale of 4,444,444 Ordinary
Shares in this offering at the public offering price of $0.45 per Ordinary Share, and after deducting estimated underwriting discounts
and commissions and estimated offering expenses payable by us, as if the sale of the Ordinary Shares had occurred on June 30, 2023. |
You should read this table
in conjunction with our Unaudited Interim Financial Statements as of June 30, 2023 and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations for the Six Months Ended June 30, 2023” attached as exhibits 99.1 and 99.2, respectively,
to our Report on Form 6-K filed on August 30, 2023 and incorporated by reference herein.
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As of June 30, 2023* | |
U.S. dollars in thousands (Unaudited) | |
Actual | | |
As Adjusted | |
Cash | |
$ | 5,954 | | |
| 7,637 | |
Long term debt | |
| 202 | | |
| 202 | |
Shareholders’ equity | |
$ | - | | |
| - | |
Share capital | |
| 46 | | |
| 59 | |
Additional paid-in capital | |
| 24,900 | | |
| 26,569 | |
Accumulated losses | |
| (17,305 | ) | |
| (17,305 | ) |
Total shareholders’ equity | |
| 7,641 | | |
| 9,324 | |
Total capitalization | |
$ | 7,843 | | |
| 9,526 | |
DESCRIPTION OF SECURITIES
The material
terms and provisions of our Ordinary Shares are described under the heading “Description of Securities-Ordinary Shares”
in the accompanying prospectus.
UNDERWRITING
We have entered into an underwriting
agreement, dated November 9, 2023, or the Underwriting Agreement, with Aegis Capital Corp., or Aegis. Subject to the terms and conditions
of the underwriting agreement, we have agreed to sell to the underwriter named below, and the underwriter has, agreed to purchase, at
the public offering price less the underwriting discounts set forth on the cover page of this prospectus, the number of Ordinary Shares
listed next to its name in the following table:
Underwriter | |
Ordinary Shares | |
Aegis Capital Corp. | |
| 4,444,444 | |
Total | |
| 4,444,444 | |
The underwriter is offering
the Ordinary Shares subject to its acceptance of the Ordinary Shares from us and subject to prior sale. The obligations of the underwriter
may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, pursuant to the underwriting
agreement, the underwriter’s obligations are subject to customary conditions, representations and warranties contained in the underwriting
agreement. The underwriting agreement provides that the obligations of the underwriter to pay for and accept delivery of the Ordinary
Shares offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions.
The underwriter is obligated to take and pay for all of the Ordinary Shares if any such Ordinary Shares are taken. However, the underwriter
is not required to take or pay for the Ordinary Shares covered by the underwriter’s option described below.
The underwriter is offering
the Ordinary Shares subject to prior sale, when, as and if issued to and accepted by it, subject to approval of legal matters by their
counsel and other conditions specified in the underwriting agreement. The underwriter reserves the right to withdraw, cancel or modify
offers to the public and to reject orders in whole or in part.
Discounts, Commissions and Reimbursement
The following table shows
the public offering price, underwriting discount and proceeds, before expenses, to us. The information assumes either no exercise or full
exercise by the underwriter of its option to purchase additional Ordinary Shares.
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Per Ordinary Share | | |
Total Without Option Exercise | | |
Total With Full Option Exercise | |
Public offering price | |
$ | 0.45 | | |
$ | 2,000,000 | | |
$ | 2,300,000 | |
Underwriting discount (7.0%) | |
$ | 0.0315 | | |
$ | 140,000 | | |
$ | 161,000 | |
Proceeds to us (before expenses) | |
$ | 0.4185 | | |
$ | 1,860,000 | | |
$ | 2,139,000 | |
The underwriter proposes to
offer the Ordinary Shares to the public at the public offering price set forth on the cover of this prospectus. In addition, the underwriter
may offer some of the shares to other securities dealers at such price less a concession not in excess of $0.01575 per ordinary share.
If all of the Ordinary Shares offered by us are not sold at the public offering price, the underwriter may change the offering price and
other selling terms by means of a supplement to this prospectus.
We have also agreed to pay
certain expenses of the underwriter relating to the offering, including up to $75,000 for fees and expenses of legal counsel.
We estimate that the total
expenses of the offering payable by us, excluding the total underwriting discount, will be approximately $177,000.
Over-allotment Option
We have granted to the underwriter
an option exercisable not later than 45 days after the closing of this offering to purchase up to an additional 666,666 Ordinary Shares
at the public offering price per share set forth on the cover page hereto less the underwriting discounts. The underwriter may exercise
the option solely to cover overallotments, if any, made in connection with this offering. If any additional Ordinary Shares are purchased
pursuant to the over-allotment option, the underwriter will offer these shares on the same terms as those on which the other Ordinary
Shares are being offered.
Lock-Up Agreements
We and each of our directors
and officers and holders of 10% or more our outstanding Ordinary Shares have agreed, subject to customary exceptions, not to offer, sell,
agree to sell, directly or indirectly, or otherwise dispose of any Ordinary Shares or any securities convertible into or exchangeable
for Ordinary Shares for a period of 60 days after the closing date of the offering pursuant to the underwriting agreement.
Company Standstill
Without the prior written
consent of Aegis, we have agreed, for a period of 60 days from the closing date of the offering, that we will not (a) offer, sell, or
otherwise transfer or dispose of, directly or indirectly, any of our shares of capital stock or any securities convertible into or exercisable
or exchangeable for our shares of capital stock; or (b) file or caused to be filed any registration statement with the Commission relating
to the offering of any of our shares of capital stock or any securities convertible into or exercisable or exchangeable for our shares
of capital stock except for (i) the adoption of an equity incentive plan, or the amendment of an existing equity incentive plan, and the
grant of awards or equity pursuant to any equity incentive plan, and the filing of a registration statement on Form S-8 and (ii) this
issuance of shares of our capital stock in connection with an acquisition or a strategic relationship which may include the sale of equity
securities. In no event should any equity transaction during the 60-day standstill period result in the sale of equity at an offering
price to the public less than that of this offering.
We have also agreed, with limited exceptions,
that for a period of 90 days after the closing date of the offering, we will not effect or enter into an agreement to effect any issuance
by us of Ordinary Shares or Ordinary Share equivalents (or a combination of units thereof) involving a transaction in which we (a) issue
or sell any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional
Ordinary Shares either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with,
the trading prices of or quotations for the Ordinary Shares at any time after the initial issuance of such debt or equity securities
or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Ordinary Shares or (b) enter into, or effect a transaction under, any agreement, including, but
not limited to, an equity line of credit or an “at-the-market offering”, whereby we may issue securities at a future determined
price regardless of whether shares pursuant to such agreement have actually been issued and regardless of whether such agreement is subsequently
cancelled.
Tail Financing
We have agreed to pay the
above cash compensation to the extent that any fund which Aegis contacted or introduced to us from August 31, 2023 through the date of
the Underwriting Agreement, or the Engagement Period, provides financing or capital in any public or private offering or capital raising
transaction during the six-month period following expiration or termination of our engagement letter with Aegis, or to the extent that
such financing or capital is provided to us by funds whom Aegis had introduced to us during the Engagement Period or in connection with
our initial public offering (including by virtue of participation in either of such offerings), if such financing is consummated at any
time within the nine month period following the closing of this offering, expiration or termination of our engagement letter with Aegis.
Indemnification
We have agreed to indemnify
the underwriter against specified liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriter
may be required to make in respect thereof.
Electronic Offer, Sale and Distribution of
Securities
A prospectus in electronic
format may be made available on the websites maintained by one or more of the underwriter or selling group members. The underwriter may
agree to allocate a number of securities to selling group members for sale to its online brokerage account holders. Internet distributions
will be allocated by the underwriter and selling group members that will make internet distributions on the same basis as other allocations.
Other than the prospectus in electronic format, the information on these websites is not part of, nor incorporated by reference into,
this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us, and should
not be relied upon by investors.
Price Stabilization, Short Positions and Penalty
Bids
In connection with this offering,
the underwriter may engage in stabilizing transactions, overallotment transactions, syndicate covering transactions and penalty bids in
connection with our Ordinary Shares.
Stabilizing transactions permit
bids to purchase Ordinary Shares so long as the stabilizing bids do not exceed a specified maximum.
Overallotment transactions
involve sales by the underwriter of Ordinary Shares in excess of the number of shares the underwriter is obligated to purchase. This creates
a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number
of shares over-allotted by the underwriter is not greater than the number of shares that it may purchase in the option to purchase additional
shares. In a naked short position, the number of shares involved is greater than the number of shares in the option to purchase additional
shares. The underwriter may close out any short position by exercising its option to purchase additional shares and/or purchasing shares
in the open market.
Syndicate covering transactions
involve purchases of Ordinary Shares in the open market after the distribution has been completed in order to cover syndicate short positions.
Such a naked short position would be closed out by buying securities in the open market. A naked short position is more likely to be created
if the underwriter is concerned that there could be downward pressure on the price of the securities in the open market after pricing
that could adversely affect investors who purchase in the offering.
Penalty bids permit the underwriter
to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a
stabilizing or syndicate covering transaction to cover syndicate short positions.
These stabilizing transactions,
syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our Ordinary Shares
or preventing or retarding a decline in the market price of our Ordinary Shares. As a result, the price of our Ordinary Shares in the
open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriter make any representation
or prediction as to the effect that the transactions described above may have on the price of our Ordinary Shares. These transactions
may be effected on Nasdaq, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.
In connection with this offering,
the underwriter also may engage in passive market making transactions in our Ordinary Shares in accordance with Regulation M during a
period before the commencement of offers or sales of our Ordinary Shares in this offering and extending through the completion of the
distribution. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid for that
security. However, if all independent bids are lowered below the passive market maker’s bid that bid must then be lowered when specific
purchase limits are exceeded. Passive market making may stabilize the market price of the securities at a level above that which might
otherwise prevail in the open market and, if commenced, may be discontinued at any time.
Other Relationships
The underwriter and its affiliates
have in the past and may in the future provide various investment banking, commercial banking and other financial services for us and
our affiliates for which they have received and may receive customary fees.
Offer restrictions outside the United States
Other than in the United States,
no action has been taken by us or the underwriter that would permit a public offering of the securities offered by this prospectus in
any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly
or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such
securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable
rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about
and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute
an offer to sell or a solicitation of an offer to buy.
LEGAL MATTERS
Certain legal matters concerning
this offering will be passed upon for us by Sullivan & Worcester LLP, New York, New York. Certain legal matters with respect to the
legality of the issuance of the securities offered by this prospectus supplement and other legal matters concerning this offering relating
to Israeli law will be passed upon for us by Sullivan & Worcester Tel-Aviv (Har-Even & Co.), Tel Aviv, Israel. Certain
legal matters related to the offering will be passed upon for the underwriter by Kaufman & Canoles, P.C., Richmond, Virginia.
EXPERTS
The consolidated financial statements as of December
31, 2022 and 2021 and for each of the years in the three-year period ended December 31, 2022 incorporated by reference in this prospectus
have been so incorporated in reliance on the report of Ziv Haft, Certified Public Accountants, Isr., BDO Member Firm, an independent registered
public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are an Israeli company
and are a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act. As a foreign private issuer, we are exempt
from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal
shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
In addition, we are not required
under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly
as U.S. companies whose securities are registered under the Exchange Act. However, we file with the SEC, within 120 days after the end
of each fiscal year, or such applicable time as required by the SEC, an annual report on Form 20-F containing financial statements audited
by an independent registered public accounting firm, and submit to the SEC, on a Form 6-K, unaudited interim financial information.
We maintain a corporate website
at www.wearabledevices.co.il. We will post on our website any materials required to be so posted on such website under applicable corporate
or securities laws and regulations, including any notices of general meetings of our shareholders.
The SEC also maintains a web
site that contains information we file electronically with the SEC, which you can access over the Internet at http://www.sec.gov. Information
contained on, or that can be accessed through, our website and other websites listed in this prospectus supplement do not constitute a
part of this prospectus supplement. We have included these website addresses in this prospectus solely as inactive textual references.
This prospectus supplement
and the accompanying prospectus are part of a registration statement on Form F-3 filed by us with the SEC under the Securities Act. As
permitted by the rules and regulations of the SEC, this prospectus supplement and the accompanying prospectus do not contain all the information
set forth in the registration statement and the exhibits thereto filed with the SEC. For further information with respect to us and the
securities offered hereby, you should refer to the complete registration statement on Form F-3, which may be obtained from the locations
described above. Statements contained in this prospectus supplement and the accompanying prospectus, or any documents incorporated by
reference herein or therein, about the contents of any contract or other document are not necessarily complete. If we have filed any contract
or other document as an exhibit to the registration statement or any other document incorporated by reference in the registration statement,
you should read the exhibit for a more complete understanding of the document or matter involved. Each statement regarding a contract
or other document is qualified in its entirety by reference to the actual document.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” the information we file with it, which means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is considered to be part of this prospectus supplement and the accompanying
prospectus and information we file later with the SEC will automatically update and supersede this information. The information incorporated
by reference is considered to be part of this prospectus supplement and the accompanying prospectus and information we file later with
the SEC will automatically update and supersede this information. The documents we are incorporating by reference as of their respective
dates of filing are:
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Our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 22, 2023; |
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Our Reports of Foreign
Private Issuer on Form 6-K, or Form 6-K, filed on January
4, 2023 (with respect to the first two and the fourth paragraphs and the section titled
“Forward-Looking Statement” in the press release attached as Exhibit 99.1 to the Form 6-K), January
10, 2023 (with respect to the first paragraph and the section titled “Forward-Looking Statement” in the press
release attached as Exhibit 99.1 to the Form 6-K), February
9, 2023 (with respect to the first two paragraphs and the section titled “Forward-Looking Statement” in
the press release attached as Exhibit 99.1 to the Form 6-K), February
16, 2023 (with respect to the first two paragraphs and the section titled “Forward-Looking Statement” in
the press release attached as Exhibit 99.1 to the Form 6-K), March
22, 2023 (with respect to the first three and the last two paragraphs, the section titled “Forward-Looking
Statements” and the U.S. GAAP financial statements in the press release attached as Exhibit 99.1 to the Form 6-K), May
23, 2023 (with respect to the press release attached as Exhibit 99.1 to the Form 6-K), May
25, 2023 (with respect to the press release attached as Exhibit 99.1 to the Form 6-K), June
1, 2023 (with respect to the first two and the fourth paragraphs and the section titled
“Forward-Looking Statement” in the press release attached as Exhibit 99.1 to the Form 6-K), June
12, 2023 (with respect to the press release attached as Exhibit 99.1 to the Form 6-K); August
25, 2023 (with respect to the first paragraph the sections titled “Financial Review,” “Year-To-Date
Operational Highlights,” and “Forward-Looking Statements” and the financial statements in the press release
attached as Exhibit 99.1 to the Form 6-K), August
29, 2023, August 30,
2023, October 24, 2023, October 26, 2023 and November 9, 2023;
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The description of our
securities contained in our Registration Statement on Form 8-A filed
with the SEC on September 9, 2022, including as amended by Exhibit 2.5 to our Annual Report on Form 20-F filed with the SEC on March 22, 2023 and any amendments
and reports filed for the purpose of updating such description. |
All subsequent annual reports
filed by us pursuant to the Exchange Act on Form 20-F prior to the termination of the offering shall be deemed to be incorporated by reference
to this prospectus supplement and the accompanying prospectus and to be a part hereof from the date of filing of such documents. We may
also incorporate part or all of any Form 6-K subsequently submitted by us to the SEC prior to the termination of the offering by identifying
in such Forms 6-K that they, or certain parts of their contents, are being incorporated by reference herein, and any Forms 6-K so identified
shall be deemed to be incorporated by reference in this prospectus supplement and the accompanying prospectus and to be a part hereof
from the date of submission of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement contained
herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus supplement and accompanying prospectus. The information we incorporate by reference is an important
part of this prospectus supplement and the accompanying prospectus, and later information that we file with the SEC will automatically
update and supersede the information contained in this prospectus supplement and accompanying prospectus.
We will provide you without
charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits
to such documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests
to us at: 2 Yitzhak 5 Ha-Tnufa Street, Yokne’am Illit, 2066736, Israel, Attention: Chief Financial Officer.
PROSPECTUS
$30,000,000
Wearable Devices Ltd.
Ordinary Shares
Warrants to purchase Ordinary Shares
Units
We may offer and sell from
time to time in one or more offerings up to the aggregate amount of $30,000,000 of our ordinary shares, NIS 0.01 par value per share,
or the Ordinary Shares, warrants to purchase Ordinary Shares or units comprising a combination of Ordinary Shares and warrants. We refer
to the Ordinary Shares, the warrants, the units and the Ordinary Shares issued or issuable upon exercise of the warrants, collectively,
as the securities. Each time we sell securities pursuant to this prospectus, we will provide in a supplement to this prospectus the price
and any other material terms of any such offering. We may also authorize one or more free writing prospectuses to be provided to you in
connection with each offering. Any prospectus supplement and related free writing prospectuses may also add, update or change information
contained in the prospectus. You should read this prospectus, any applicable prospectus supplement and related free writing prospectuses,
as well as the documents incorporated by reference or deemed incorporated by reference into this prospectus, carefully before you invest
in the securities.
Our Ordinary Shares and warrants
issued as part of our initial public offering, or the IPO Warrants, are listed on the Nasdaq Capital Market, or Nasdaq, under the symbol
“WLDS” and “WLDSW,” respectively. On October 2, 2023, the last reported sale price of our Ordinary Shares and
IPO Warrants on Nasdaq was $0.84 per share and $0.11 per warrant, respectively.
On October 2, 2023, the aggregate
market value of our Ordinary Shares held by non-affiliates was approximately $9,534,647, based on 15,942,984 Ordinary Shares outstanding
and 11,350,771 shares held by non-affiliates and a per share price of $0.84 based on the closing sale price of our Ordinary Shares on
October 2, 2023. We have not offered any securities pursuant to General Instruction I.B.5 on Form F-3 during the prior 12 calendar month
period that ends on and includes the date of this prospectus.
We are an emerging growth
company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and are subject to reduced public company reporting
requirements.
Investing in the securities
involves a high degree of risk. Risks associated with an investment in the securities will be described in any applicable prospectus supplement
and are and will be described in certain of our filings with the Securities and Exchange Commission, or SEC, as described in “Risk
Factors” beginning on page 3.
The securities may be sold
directly by us to investors, through agents designated from time to time or to or through underwriters or dealers, or through a combination
of such methods, on a continuous or delayed basis. For additional information on the methods of sale, you should refer to the section
entitled “Plan of Distribution” in this prospectus. If any agents or underwriters are involved in the sale of the securities
with respect to which this prospectus is being delivered, the names of such agents or underwriters and any applicable fees, commissions,
discounts and over-allotment options will be set forth in a prospectus supplement. The price to the public of the securities and the net
proceeds that we expect to receive from such sale will also be set forth in a prospectus supplement.
Neither the Securities
and Exchange Commission, or the SEC, nor any state or other foreign securities commission has approved nor disapproved these securities
or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is October 18,
2023
TABLE OF CONTENTS
ABOUT
THIS PROSPECTUS
This prospectus is part of
a registration statement on Form F-3 that we filed with the SEC utilizing a “shelf” registration process. Under this shelf
registration process, we may offer and sell from time to time in one or more offerings up to the aggregate amount of $30,000,000 of our
Ordinary Shares, warrants or units comprising a combination of Ordinary Shares and warrants. We refer to the Ordinary Shares, the warrants,
the units and the Ordinary Shares issued or issuable upon exercise of the warrants, collectively, as the securities.
Each time we sell securities,
we will provide you with a prospectus supplement that will describe the specific amounts, prices and terms of such offering. We may also
authorize one or more free writing prospectuses to be provided to you in connection with such offering. The prospectus supplement and
any related free writing prospectuses may also add, update or change information contained in this prospectus. You should read carefully
both this prospectus, the applicable prospectus supplement, the documents incorporated by reference into this prospectus and any related
free writing prospectus together with additional information described below under “Where You Can Find More Information” and
“Incorporation of Certain Information by Reference” before buying the securities being offered.
This prospectus does not contain
all of the information provided in the registration statement that we filed with the SEC. For further information about us or the securities,
you should refer to that registration statement, which you can obtain from the SEC as described below under “Where You Can Find
More Information” and “Incorporation of Certain Information by Reference.”
You should rely only on the
information contained or incorporated by reference in this prospectus, a prospectus supplement and related free writing prospectuses.
Neither we, nor any agent, underwriter or dealer has authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on it.
This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is
not permitted. You should not assume that the information contained in this prospectus and the accompanying prospectus supplement or related
free writing prospectuses is accurate on any date subsequent to the date set forth on the front of the document or that any information
that we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference. Our business,
financial condition, results of operations and prospects may have changed since those dates.
For investors outside the
United States: We have not done anything that would permit an offering or possession or distribution of this prospectus in any jurisdiction
where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession
of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities described herein
and the distribution of this prospectus outside the United States.
In this prospectus, “we,”
“us,” “our,” the “Company” and “Wearable Devices” refer to Wearable Devices Ltd.
Our reporting currency and
functional currency is the U.S. dollar. Unless otherwise expressly stated or the context otherwise requires, references in this prospectus
to “NIS” are to New Israeli Shekels, and references to “dollars” or “$” are to U.S. dollars.
We report our financial statements
in accordance with generally accepted accounting principles in the United States, or U.S. GAAP.
ABOUT OUR COMPANY
We are a technology growth
company specializing in the development of AI-powered touchless sensing wearables. Our wrist-worn devices capture neural signals from
the wrist to create an input interface that translates user intent into digital command. It allows the user to control digital devices
using subtle touchless finger movements and hand gestures. Since our technology was introduced to the market in 2014, we have been working
with both business to business, or B2B, and business to consumer, or B2C, customers as part of our push-pull strategy. We are now in the
transition phase from research and development to commercialization of our technology into B2B products. At the same time, we have commenced
commercial manufacturing of our first consumer product, the “Mudra Band”, which connects to the Apple watch and allows touchless
control for Apple ecosystem devices. It also offers the ability to seamlessly switch control between devices such as iPhone, iPad, Mac
computer, Apple TV, smart glasses, and other connected devices.
Corporate Information
We are an Israeli corporation
based in Yokne’am Illit, Israel and were incorporated in Israel in 2014 under the name Wearable Devices Ltd. Our principal executive
offices are located at 5 Ha-Tnufa St., Yokne’am Illit, 2066736 Israel. Our telephone number in Israel is 972.4.6185670 Our website
address is www.wearabledevices.co.il. The information contained on, or that can be accessed through, our website is not part
of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
Implications of Being an Emerging Growth Company
We are an “emerging
growth company,” as defined in Section 2(a) of the U.S. Securities Act of 1933, as amended, or the Securities Act, as modified
by the JOBS Act. As such, we are eligible to, and intend to, take advantage of certain exemptions from various reporting requirements
applicable to other public companies that are not “emerging growth companies” such as not being required to comply with the
auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. We could remain an
“emerging growth company” for up to five years, or until the earliest of (a) the last day of the first fiscal year in
which our annual gross revenue exceeds $1.235 billion, (b) the date that we become a “large accelerated filer” as defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of
our Ordinary Shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed
second fiscal quarter, or (c) the date on which we have issued more than $1 billion in nonconvertible debt during the preceding
three-year period.
Implications of being a Foreign Private Issuer
We are subject to the information
reporting requirements of the Exchange Act that are applicable to “foreign private issuers,” and under those requirements
we file reports with the SEC. As a foreign private issuer, we are not subject to the same requirements that are imposed upon U.S. domestic
issuers by the SEC. Under the Exchange Act, we are subject to reporting obligations that, in certain respects, are less detailed and less
frequent than those of U.S. domestic reporting companies. For example, we are not required to issue quarterly reports, proxy statements
that comply with the requirements applicable to U.S. domestic reporting companies, or individual executive compensation information that
is as detailed as that required of U.S. domestic reporting companies. We also have four months after the end of each fiscal year to file
our annual report with the SEC and are not required to file current reports as frequently or promptly as U.S. domestic reporting companies.
Our officers, directors and principal shareholders are exempt from the requirements to report transactions in our equity securities and
from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we are not
subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. In addition, as a foreign private issuer,
we are permitted to follow certain home country corporate governance practices instead of those otherwise required under the Nasdaq Stock
Market rules for domestic U.S. issuers. These exemptions and leniencies will reduce the frequency and scope of information and protections
available to you in comparison to those applicable to a U.S. domestic reporting company. We intend to take advantage of the exemptions
available to us as a foreign private issuer during and after the period we qualify as an “emerging growth company.”
RISK
FACTORS
Investing in our securities
involves risks. Please carefully consider the risk factors described in our periodic reports filed with the SEC, including those set forth
under the caption “Item 3. Key Information - D. Risk Factors” in our Annual Report on Form 20-F for the year ended December
31, 2022, or the 2022 Annual Report, or any updates in our Reports of Foreign Private Issuer on Form 6-K, or Reports on Form 6-K, which
are incorporated by reference into this prospectus, together with all of the other information appearing in this prospectus or incorporated
by reference into this prospectus and any applicable prospectus supplement, in light of your particular investment objectives and financial
circumstances. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also impair
our business operations. If any of these risks actually occur, our business, financial condition, operating results or cash flows could
be materially adversely affected. This could cause the trading price of our securities to decline, and you may lose all or part of your
investment. The discussion of risks includes or refers to forward-looking statements; you should read the explanation of the qualifications
and limitations on such forward-looking statements discussed elsewhere in this prospectus.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains,
and any accompanying prospectus supplement will contain, forward-looking statements within the meaning of Section 27A of the Securities
Act, Section 21E of the Exchange Act of and the Private Securities Litigation Reform Act of 1995. Also, documents that we incorporate
by reference into this prospectus, including documents that we subsequently file with the SEC, contain and will contain forward-looking
statements. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical
matters. You can generally identify forward-looking statements as statements containing the words “may,” “will,”
“could,” “should,” “expect,” “anticipate” “objective,” “goal,”
“intend,” “estimate,” “believe,” “project,” “plan,” “assume” or
other similar expressions, or negatives of those expressions, although not all forward-looking statements contain these identifying words.
All statements contained or incorporated by reference in this prospectus and any prospectus supplement regarding our objectives, plans
and strategies, statements that contain projections of results of operations or of financial condition, expected capital needs and expenses,
statements relating to the research, development, completion and use of our products, and all statements (other than statements of historical
facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the
future.
Important factors that could
cause actual results, developments, and business decisions to differ materially from those anticipated in these forward-looking statements
include, among other things:
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Our financial statements for the six months ended June 30, 2023, contained an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all; |
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Surface nerve conductance becoming the industry standard input method for wearable computing and consumer electronics; |
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our ability to maintain and expand our existing customer base; |
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timing of the shipment to early-booking orders of our Mudra Band; |
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our ability to maintain and expand compatibility of our devices with a broad range of mobile devices and operating systems; |
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our ability to maintain our business models; |
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our ability to correctly predict the market growth; |
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our ability to remediate material weaknesses in our internal control over financial reporting; |
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our ability to retain our founders; |
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our ability to maintain, protect, and enhance our intellectual property; |
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our ability to raise capital through the issuance of additional securities; |
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the impact of competition and new technologies; |
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general market, political and economic conditions in the countries in which we operate; |
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projected capital expenditures and liquidity; |
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changes in our strategy; |
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litigation; and |
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those factors referred to in “Item 3. Key Information — D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects,” of our 2022 Annual Report as well other factors in the 2022 Annual Report. |
You should not place undue
reliance on our forward-looking statements because the matters they describe are subject to certain risks, uncertainties and assumptions,
including in many cases decisions or actions by third parties, that are difficult to predict. Our forward-looking statements are based
on the information currently available to us and speak only as of the date on the cover of this prospectus, the date of any prospectus
supplement, or, in the case of forward-looking statements incorporated by reference, the date of the filing that includes the statement.
Over time, our actual results, performance or achievements may differ from those expressed or implied by our forward-looking statements,
and such difference might be significant and materially adverse to our security holders. We undertake no obligation to update publicly
any forward-looking statements, whether as a result of new information, future events or otherwise.
We have identified some of
the important factors that could cause future events to differ from our current expectations and they are described in this prospectus
and supplements to this prospectus (if any) under the caption “Risk Factors,” “Use of Proceeds,” and elsewhere
in this prospectus as well as in our 2022 Annual Report, including without limitation under the captions “Risk Factors” and
“Operating and Financial Review and Prospects,” and in other documents that we may file with the SEC, all of which you should
review carefully. Please consider our forward-looking statements in light of those risks as you read this prospectus, the documents incorporated
by reference herein and any prospectus supplement.
CAPITALIZATION
The following table sets forth
our cash and cash equivalents and our capitalization as of June 30, 2023.
You should read this table
in conjunction with our Unaudited Interim Financial Statements as of June 30, 2023 and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations for the Six Months Ended June 30, 2023” attached as exhibits 99.1 and 99.2, respectively,
to our Report on Form 6-K filed on August 30, 2023 and incorporated by reference herein.
U.S. dollars in thousands | |
As of
June 30,
2023* | |
Cash | |
$ | 5,954 | |
Long term debt | |
| 202 | |
Shareholders’ equity: | |
$ | | |
Share capita | |
| 46 | |
Additional paid-in capital | |
| 24,900 | |
Accumulated losses | |
| (17,305 | ) |
Total shareholders’ equity | |
| 7,641 | |
Total capitalization | |
$ | 7,843 | |
USE OF PROCEEDS
Unless
otherwise indicated in an accompanying prospectus supplement, we intend to use the net proceeds from the sale of our securities in this
offering for working capital and general corporate purposes. The amounts and timing of our actual expenditures will depend upon numerous
factors, including the timing, scope, progress and results of our research and development efforts, regulatory and competitive environment
and other factors that management believes are appropriate. Accordingly, our management will have broad discretion in applying the net
proceeds of this offering. Pending application of the net proceeds for the purposes as described above, we may invest the net proceeds
in a variety of capital preservation investments, including short-term, interest-bearing securities, and U.S. government securities.
DESCRIPTION OF SECURITIES
The
descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize the material
terms and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus supplement relating
to any securities the particular terms of the securities offered by that prospectus supplement. If we so indicate in the applicable prospectus
supplement, the terms of the securities may differ from the terms we have summarized below.
We
may sell from time to time, in one or more offerings, Ordinary Shares, warrants to purchase Ordinary Shares or units comprising a combination
of Ordinary Shares and warrants.
The total dollar amount of
all securities that we may issue under this prospectus will not exceed $30,000,000. The actual price per share of the Ordinary Shares
that we will offer, or per security of the securities that we will offer, pursuant hereto will depend on a number of factors that may
be relevant as of the time of offer.
This prospectus may not be
used to consummate a sale of securities unless it is accompanied by a prospectus supplement.
As of October 3, 2023, our
authorized share capital consists of 50,000,000 Ordinary Shares, of which 15,942,984 Ordinary Shares were issued and outstanding as of
such date. All of our outstanding Ordinary Shares have been validly issued, fully paid and non-assessable. Our Ordinary Shares are not
redeemable and are not subject to any preemptive right. Our Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “WLDS”
since September 13, 2022.
As of October 3, we have issued
and outstanding IPO Warrants to purchase an aggregate of 7,860,861 Ordinary Shares, with exercise price of $2.00 per Ordinary Share. The
IPO Warrants were issued as part of our initial public offering and are listed on Nasdaq under the symbol “WLDSW” since September
13, 2022.
As of October 3, we have 1,754,189
Ordinary Shares issuable upon the exercise of outstanding options allocated or granted to certain employees, directors and consultants,
under our 2015 Share Option Plan, or the Plan, (including 120,000 Ordinary Shares issuable upon the exercise of options approved for issuance
by our board of directors but still subject to approval by shareholders at our 2023 annual general meeting of shareholders). An additional
1,061,637 Ordinary Shares are reserved for future issuance under the Plan.
Ordinary Shares
We may issue Ordinary Shares
independently or together with any other securities offered by any prospectus supplement and the Ordinary Shares may be attached to or
separate from those securities.
The
following are summaries of material provisions of our articles of association, or Articles, and the Israeli Companies Law 5759-1999, or
the Companies Law, insofar as they relate to the material terms of our Ordinary Shares, and do not purport to be complete.
Directors
Our Board of directors shall
direct our policy and shall supervise the performance of our Chief Executive Officer and his actions. Our Board of directors may exercise
all powers that are not required under the Companies Law, or under our articles of association to be exercised or taken by our shareholders.
Rights Attached to Ordinary
Shares
Our Ordinary Shares shall
confer upon the holders thereof:
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equal right to attend and to vote at all of our general meetings, whether regular or special, with each Ordinary Share entitling the holder thereof, which attend the meeting and participate at the voting, either in person or by a proxy or by a written ballot, to one vote; |
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equal right to participate in distribution of dividends, if any, whether payable in cash or in bonus shares, in distribution of assets or in any other distribution, on a per share pro rata basis; and |
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equal right to participate, upon our dissolution, in the distribution of our assets legally available for distribution, on a per share pro rata basis. |
Election of Directors
Pursuant to our articles of
association, our directors are elected by the general meeting and, unless appointed for a shorter term, serve in office until the third
annual general meeting after the general meeting in which such director was appointed, in which such later annual general meeting the
directors will be brought for re-election or replacement.
In each annual general meeting,
only directors whose service term lapsed, in accordance with the classes of directors as described in article 39 of our articles of association,
will be deemed retired and brought for re-election, and all other directors whose service term lapsed shall be deemed to have been re-elected
for a term until the next annual general meeting.
Annual and Special Meetings
Under the Israeli law, we
are required to hold an annual general meeting of our shareholders once every calendar year, at such time and place which shall be determined
by our Board of directors, that must be no later than 15 months after the date of the previous annual general meeting. All meetings other
than the annual general meeting of shareholders are referred to as special general meetings. Our Board of directors may call special meetings
whenever it sees fit and upon the request of: (a) any two of our directors or such number of directors equal to one quarter of the directors
then at office; and/or (b) one or more shareholders holding, in the aggregate, (i) 5% or more of our outstanding issued shares and 1%
of our outstanding voting power or (ii) 5% or more of our outstanding voting power.
Subject to the provisions
of the Companies Law and the regulations promulgated thereunder, shareholders entitled to participate and vote at general meetings are
the shareholders of record on a date to be decided by the board of directors, which may be between four and forty days prior to the date
of the meeting. Resolutions regarding the following matters must be passed at a general meeting of our shareholders:
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amendments to our articles of association; |
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the exercise of our Board of Director’s powers by a general meeting if our Board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management; |
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appointment or termination of our auditors; |
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appointment of directors, including external directors (other than with respect to circumstances specified in our articles of association); |
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approval of acts and transactions requiring general meeting approval pursuant to the provisions of the Companies Law (mainly certain related party transactions) and any other applicable law; |
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increases or reductions of our authorized share capital; and |
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a merger (as such term is defined in the Companies Law). |
Notices
The Companies Law require
that a notice of any annual or special shareholders meeting be provided at least 21 days prior to the meeting, and if the agenda of the
meeting includes the appointment or removal of directors, the approval of transactions with office holders or interested or related parties,
approval of the company’s general manager to serve as the chairman of the board of directors or an approval of a merger, notice
must be provided at least 35 days prior to the meeting.
Quorum
As permitted under the Companies
Law, the quorum required for our general meetings consists of at least two shareholders present in person, by proxy, written ballot or
voting by means of electronic voting system, who hold or represent between them at least 25% of the total outstanding voting rights. If
within half an hour of the time set forth for the general meeting a quorum is not present, the general meeting shall stand adjourned the
same day of the following week, at the same hour and in the same place, or to such other date, time and place as prescribed in the notice
to the shareholders and in such adjourned meeting, if no quorum is present within half an hour of the time arranged, any number of shareholders
participating in the meeting, shall constitute a quorum.
If a special general meeting
was summoned following the request of a shareholder, and within half an hour a legal quorum shall not have been formed, the meeting shall
be canceled.
Adoption of Resolutions
Our articles of association
provide that resolutions amending provisions of the articles of association related to the staggered board of directors and the composition
of the board of directors, as well as a resolution to dismiss a director, will require an affirmative vote of 70% of the voting power
represented at a general meeting and voting thereon. Other than that, and unless otherwise required under the Companies Law, all resolutions
of the Company’s shareholders require a simple majority vote. A shareholder may vote in a general meeting in person, by proxy, by
a written ballot.
Changing Rights Attached
to Shares
Unless otherwise provided
by the terms of the shares and subject to any applicable law, any modification of rights attached to any class of shares must be adopted
by the holders of a majority of the shares of that class present a general meeting of the affected class or by a written consent of all
the shareholders of the affected class.
The enlargement of an existing
class of shares or the issuance of additional shares thereof, shall not be deemed to modify the rights attached to the previously issued
shares of such class or of any other class, unless otherwise provided by the terms of the shares.
Limitations on the Right
to Own Securities in Our Company
There are no limitations on
the right to own our securities in our articles of association. In certain circumstances the IPO Warrants have restrictions upon the exercise
of such warrants if such exercise would result in the holders thereof owning more than 4.99% or 9.99% of our Ordinary Shares upon such
exercise, as further described below.
Provisions Restricting
Change in Control of Our Company
Our articles of association
provide for a staggered board of directors, which mechanism may delay, defer or prevent a change of control of the Company’s board
of directors. Other than that, there are no specific provisions of our articles of association that would have an effect of delaying,
deferring or preventing a change in control of the Company or that would operate only with respect to a merger, acquisition or corporate
restructuring involving us. However, as described below, certain provisions of the Companies Law may have such effect.
The Companies Law includes
provisions that allow a merger transaction and requires that each company that is a party to the merger have the transaction approved
by its board of directors and, unless certain requirements described under the Companies Law are met, a vote of the majority of shareholders,
and, in the case of the target company, also a majority vote of each class of its shares. For purposes of the shareholder vote of each
party, unless a court rules otherwise, the merger will not be deemed approved if shares representing a majority of the voting power present
at the shareholders meeting and which are not held by the other party to the merger (or by any person or group of persons acting in concert
who holds 25% or more of the voting power or the right to appoint 25% or more of the directors of the other party) vote against the merger.
If, however, the merger involves a merger with a company’s own controlling shareholder or if the controlling shareholder has a personal
interest in the merger, then the merger is instead subject to the same special majority approval that governs all extraordinary transactions
with controlling shareholders. Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the
merger if it concludes that there exists a reasonable concern that as a result of the merger the surviving company will be unable to satisfy
the obligations of any of the parties to the merger, and may further give instructions to secure the rights of creditors. If the transaction
would have been approved by the shareholders of a merging company but for the separate approval of each class or the exclusion of the
votes of certain shareholders as provided above, a court may still approve the merger upon the petition of holders of at least 25% of
the voting rights of a company. For such petition to be granted, the court must find that the merger is fair and reasonable, taking into
account the value of the parties to the merger and the consideration offered to the shareholders. In addition, a merger may not be completed
unless at least (1) 50 days have passed from the time that the requisite proposals for approval of the merger were filed with the Israeli
Registrar of Companies by each merging company and (2) 30 days have passed since the merger was approved by the shareholders of each merging
company.
The term “Special Majority”
hereof will be defined as described in section 275(a)(3) of the Companies Law as:
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at least a majority of the shares held by shareholders who are not controlling shareholders and do not have personal interest in the merger (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder) have voted in favor of the proposal (shares held by abstaining shareholders shall not be considered); or |
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the total number of shares voted against the merger, does not exceed 2% of the aggregate voting rights of the company. |
The Companies Law also provides
that, subject to certain exceptions, an acquisition of shares in an Israeli public company must be made by means of a “special”
tender offer if as a result of the acquisition (1) the purchaser would become a holder of 25% or more of the voting rights in the company,
unless there is already another holder of at least 25% or more of the voting rights in the company or (2) the purchaser would become a
holder of 45% or more of the voting rights in the company, unless there is already a holder of more than 45% of the voting rights in the
company. These requirements do not apply if, in general, the acquisition (1) was made in a private placement that received shareholders’
approval, subject to certain conditions, (2) was from a holder of 25% or more of the voting rights in the company which resulted in the
acquirer becoming a holder of 25% or more of the voting rights in the company, or (3) was from a holder of more than 45% of the voting
rights in the company which resulted in the acquirer becoming a holder of more than 45% of the voting rights in the company. A “special”
tender offer must be extended to all shareholders. In general, a “special” tender offer may be consummated only if (1) at
least 5% of the voting power attached to the company’s outstanding shares will be acquired by the offeror and (2) the offer is accepted
by a majority of the offerees who notified the company of their position in connection with such offer (excluding the offeror, controlling
shareholders, holders of 25% or more of the voting rights in the company or anyone on their behalf, or any person having a personal interest
in the acceptance of the tender offer). If a special tender offer is accepted, then the purchaser or any person or entity controlling
it or under common control with the purchaser or such controlling person or entity may not make a subsequent tender offer for the purchase
of shares of the target company and may not enter into a merger with the target company for a period of one year from the date of the
offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial special tender offer.
If, as a result of an acquisition
of shares, the acquirer will hold more than 90% of an Israeli company’s outstanding shares or of certain class of shares, the acquisition
must be made by means of a tender offer for all of the outstanding shares, or for all of the outstanding shares of such class, as applicable.
In general, if less than 5% of the outstanding shares, or of applicable class, are not tendered in the tender offer and more than half
of the offerees who have no personal interest in the offer tendered their shares, all the shares that the acquirer offered to purchase
will be transferred to it by operation of law. However, a tender offer will also be accepted if the shareholders who do not accept the
offer hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares. Any shareholders
that was an offeree in such tender offer, whether such shareholder accepted the tender offer or not, may request, by petition to an Israeli
court, (i) appraisal rights in connection with a full tender offer, and (ii) that the fair value should be paid as determined by the court,
for a period of six months following the acceptance thereof. However, the acquirer is entitled to stipulate, under certain conditions,
that tendering shareholders will forfeit such appraisal rights.
Lastly, Israeli tax law treats
some acquisitions, such as stock-for-stock exchanges between an Israeli company and a foreign company, less favorably than U.S. tax laws.
For example, Israeli tax law may, under certain circumstances, subject a shareholder who exchanges his Ordinary Shares for shares in another
corporation to taxation prior to the sale of the shares received in such stock-for-stock swap.
Changes in Our Capital
The general meeting may, by
a simple majority vote of the shareholders attending the general meeting:
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increase our registered share capital by the creation of new shares from the existing class or a new class, as determined by the general meeting; |
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cancel any registered share capital which have not been taken or agreed to be taken by any person; |
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consolidate and divide all or any of our share capital into shares of larger nominal value than our existing shares; |
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subdivide our existing shares or any of them, our share capital or any of it, into shares of smaller nominal value than is fixed; and |
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reduce our share capital and any fund reserved for capital redemption in any manner, and with and subject to any incident authorized, and consent required, by the Companies Law. |
Exclusive Forum
Our articles of association
provide that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United
States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities
Act and that any person or entity purchasing or otherwise acquiring any interest in any security of the Company, shall be deemed to have
notice of and consented to this exclusive forum provision.
Staggered Board
Our articles of association
provide for a split of the board of directors into three classes with staggered three-year terms. At each annual general meeting of our
shareholders, the election or re-election of directors following the expiration of the term of office of the directors of that class of
directors will be for a term of office that expires on the third annual general meeting following such election or re-election, such that
each year the term of office of only one class of directors will expire. The director whom is to be retired and re-elected shall be the
director that served the longest period since its appointment or last re-election or, if more than one director served the longest time,
or if a director who is not to be re-elected agrees to be re-elected, the meeting of the board of directors which sets the date and agenda
for the annual general meeting (acting by a simple majority) will decide which of such directors will be brought for re-election at the
relevant general meeting.
Warrants
We may issue warrants independently
or together with any other securities offered by any prospectus supplement and the warrants may be attached to or separate from those
securities. We will evidence each series of warrants by warrant certificates that we may issue under a separate agreement or other evidence.
Any series of warrants may be issued under a separate warrant agreement, which may be entered into between us and a warrant agent specified
in an applicable prospectus supplement relating to a particular series of warrants. Any such warrant agent will act solely as our agent
in connection with the warrants of such series and will not assume any obligation or relationship of agency or trust with any of the holders
of the warrants. We may also choose to act as our own warrant agent. We will set forth further terms of the warrants and any applicable
warrant agreements in the applicable prospectus supplement relating to the issuance of any warrants, including, where applicable, the
following:
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the title of the warrants; |
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the aggregate number of the warrants; |
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exchange distributions and/or secondary distributions; |
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the number of securities purchasable upon exercise of the warrants; |
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the designation and terms of the securities, if any, with which the warrants are issued, and the number of the warrants issued with each such offered security; |
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the date, if any, on and after which the warrants and the related securities will be separately transferable; |
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the price at which, and form of consideration for which, each security purchasable upon exercise of the warrants may be purchased; |
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the date on which the right to exercise the warrants will commence and the date on which the right will expire; |
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if applicable, the date on and after which such warrants and the related securities will be separately transferable; |
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the manner in which the warrants may be exercised, which may include by cashless exercise; |
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the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants; |
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the terms of any rights to redeem or call the warrants; |
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any provisions for changes to or adjustments in the exercise price or number of Ordinary Shares issuable upon exercise of the warrants; |
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information with respect to book-entry procedures, if any; |
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if applicable, a discussion of the material Israeli and U.S. income tax considerations applicable to the issuance or exercise of such warrants; |
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the anti-dilution and adjustment of share capital provisions of the warrants, if any; |
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the minimum or maximum amount of the warrants which may be exercised at any one time; |
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any circumstances that will cause the warrants to be deemed to be automatically exercised; and |
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any other material terms of the warrants. |
Units
We may issue units comprised
of one or more of the other securities that may be offered under this prospectus, in any combination. As specified in the applicable prospectus
supplement, we may issue units consisting of our Ordinary Shares, warrants or any combination of such securities. Each unit will be issued
so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights
and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities
included in the unit may not be held or transferred separately at any time, or at any time before a specified date. The applicable prospectus
supplement will describe:
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the terms of the units and of the Ordinary Shares and/or warrants comprising the units, including whether and under what circumstances the securities comprising the units may be traded separately; |
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a description of the terms of any unit agreement governing the units or any arrangement with an agent that may act on our behalf in connection with the unit offering; |
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a description of the provisions for the payment, settlement, transfer or exchange of the units; and |
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any material provisions of the governing unit agreement that differ from those described above. |
The description in the applicable
prospectus supplement of any units we offer will not necessarily be complete and will be qualified in its entirety by reference to the
applicable unit agreement, which will be filed with the SEC if we offer units. For more information on how you can obtain copies of the
applicable unit agreement if we offer units, see “Where You Can Find Additional Information.”
PLAN OF DISTRIBUTION
We may sell the securities
being offered hereby in one or more of the following methods from time to time:
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a block trade (which may involve crosses) in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
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purchases by a broker or dealer as principal and resale by such broker or dealer for its own account pursuant to this prospectus; |
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exchange distributions and/or secondary distributions; |
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ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
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to one or more underwriters for resale to the public or to investors; |
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in an “at the market offering,” within the meaning of Rule 415(a)(4) of the Securities Act, to or through a market maker or into an existing trading market, on an exchange or otherwise; |
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directly to a purchaser pursuant to what is known as an “equity line of credit” as described below; |
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transactions not involving market makers or established trading markets, including direct sales or privately negotiated transactions; or |
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through a combination of these methods of sale. |
The securities that we distribute
by any of these methods may be sold, in one or more transactions, at:
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a fixed price or prices, which may be changed; |
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market prices prevailing at the time of sale; |
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prices related to prevailing market prices; or |
We will set forth in a prospectus
supplement the terms of the offering of securities, including:
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the name or names of any agents, dealers or underwriters; |
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the purchase price of the securities being offered and the proceeds we will receive from the sale; |
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any over-allotment options under which underwriters may purchase additional securities from us; |
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any agency fees or underwriting discounts and other items constituting agents’ or underwriters’ compensation; |
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the public offering price; |
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any discounts or concessions allowed or re-allowed or paid to dealers; and |
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any securities exchanges or markets on which such securities may be listed. |
If underwriters are used in the sale, they will
acquire the securities for their own account and may resell the securities from time to time in one or more transactions at a fixed public
offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the securities will
be subject to the conditions set forth in the applicable underwriting agreement. We may offer the securities to the public through underwriting
syndicates represented by managing underwriters or by underwriters without a syndicate. Subject to certain conditions, the underwriters
will be obligated to purchase all of the securities offered by the prospectus supplement, other than securities covered by any over-allotment
option. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may change from time to time.
We may use underwriters with whom we have a material relationship. We will describe in the prospectus supplement, naming the underwriter,
the nature of any such relationship.
We may sell securities directly
or through agents we designate from time to time. We will name any agent involved in the offering and sale of securities and we will describe
any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise, our agent will
act on a best-efforts basis for the period of its appointment.
We may also sell securities
directly to one or more purchasers without using underwriters or agents.
Underwriters, dealers and
agents that participate in the distribution of the securities may be underwriters as defined in the Securities Act and any discounts or
commissions they receive from us and any profit on their resale of the securities may be treated as underwriting discounts and commissions
under the Securities Act. We will identify in the applicable prospectus supplement any underwriters, dealers or agents and will describe
their compensation. We may have agreements with the underwriters, dealers and agents to indemnify them against specified civil liabilities,
including liabilities under the Securities Act. Underwriters, dealers and agents may engage in transactions with or perform services for
us in the ordinary course of their businesses.
In connection with an offering,
an underwriter may purchase and sell securities in the open market. These transactions may include short sales, stabilizing transactions
and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of securities
than they are required to purchase in the offering.
Accordingly, to cover these
short sales positions or to otherwise stabilize or maintain the price of the securities, the underwriters may bid for or purchase securities
in the open market and may impose penalty bids. If penalty bids are imposed, selling concessions allowed to syndicate members or other
broker-dealers participating in the offering are reclaimed if securities previously distributed in the offering are repurchased, whether
in connection with stabilization transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market
price of the securities at a level above that which might otherwise prevail in the open market. The impositions of a penalty bid may also
affect the price of the securities to the extent that it discourages resale of the securities. The magnitude or effect of any stabilization
or other transactions is uncertain. These transactions may be effected on Nasdaq or otherwise and, if commenced, may be discontinued at
any time.
EXPENSES
We are paying all of the expenses
of the registration of our securities under the Securities Act, including, to the extent applicable, registration and filing fees, printing
fees and expenses and the legal fees of our counsel. We estimate these expenses to be approximately $25,428 which at the present time
include the following categories of expenses:
SEC registration fee | |
$ | 4,428 | |
Legal fees and expenses | |
$ | 15,000 | |
Accounting fees and expenses | |
$ | 3,000 | |
Miscellaneous expenses | |
$ | 3,000 | |
Total | |
$ | 25,428 | |
In addition, we anticipate
incurring additional expenses in the future in connection with the offering of our securities pursuant to this prospectus. Any such additional
expenses will be disclosed in a prospectus supplement.
LEGAL MATTERS
Certain legal matters concerning
this prospectus will be passed upon for us by Sullivan & Worcester LLP, New York, New York. Certain legal matters with respect to
the legality of the issuance of the securities offered by this prospectus and other legal matters relating to Israeli law will be passed
upon for us by Sullivan & Worcester Tel Aviv (Har-Even & Co.), Tel Aviv, Israel.
EXPERTS
The consolidated financial
statements as of December 31, 2022 and 2021 and for each of the years in the three-year period ended December 31, 2022 incorporated by
reference in this prospectus have been so incorporated in reliance on the report of Ziv Haft, Certified Public Accountants, Isr., BDO
Member Firm, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as
experts in auditing and accounting.
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under
the laws of the State of Israel. Service of process upon us and upon our directors and officers and the Israeli experts named in the registration
statement of which this prospectus forms a part, a substantial majority of whom reside outside of the United States, may be difficult
to obtain within the United States. Furthermore, because substantially all of our assets and a substantial of our directors and officers
are located outside of the United States, any judgment obtained in the United States against us or any of our directors and officers may
not be collectible within the United States.
We have been informed by our
legal counsel in Israel, Sullivan & Worcester Tel Aviv (Har-Even & Co.), that it may be difficult to assert U.S. securities law
claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws
because Israel is not the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim,
it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable
U.S. law must be proved as a fact which can be a time-consuming and costly process. Certain matters of procedure will also be governed
by Israeli law.
Subject to specified time
limitations and legal procedures, Israeli courts may enforce a U.S. judgment in a civil matter which, subject to certain exceptions, is
non-appealable, including judgments based upon the civil liability provisions of the Securities Act and the Exchange Act and including
a monetary or compensatory judgment in a non-civil matter, provided that among other things:
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the judgment is obtained after due process before a court of competent jurisdiction, according to the laws of the state in which the judgment is given and the rules of private international law currently prevailing in Israel; |
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the judgment is final and is not subject to any right of appeal; |
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the prevailing law of the foreign state in which the judgment was rendered allows for the enforcement of judgments of Israeli courts; |
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adequate service of process has been effected and the defendant has had a reasonable opportunity to be heard and to present his or her evidence; |
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the liabilities under the judgment are enforceable according to the laws of the State of Israel and the judgment and the enforcement of the civil liabilities set forth in the judgment is not contrary to the law or public policy in Israel nor likely to impair the security or sovereignty of Israel; |
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the judgment was not obtained by fraud and does not conflict with any other valid judgments in the same matter between the same parties; |
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an action between the same parties in the same matter is not pending in any Israeli court at the time the lawsuit is instituted in the foreign court; and |
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the judgment is enforceable according to the laws of Israel and according to the law of the foreign state in which the relief was granted. |
If a foreign judgment is enforced
by an Israeli court, it generally will be payable in Israeli currency, which can then be converted into non-Israeli currency and transferred
out of Israel. The usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli
court to issue a judgment for the equivalent amount in Israeli currency at the rate of exchange in force on the date of the judgment,
but the judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated
in Israeli currency ordinarily will be linked to the Israeli consumer price index plus interest at the annual statutory rate set by Israeli
regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” the information we file with it, which means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is considered to be part of this prospectus and information we file later with
the SEC will automatically update and supersede this information. The information incorporated by reference is considered to be part of
this prospectus and information we file later with the SEC will automatically update and supersede this information. The documents we
are incorporating by reference as of their respective dates of filing are:
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Our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 22, 2023; |
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Our Form
6-Ks filed on January 4, 2023 (with respect to the first two and the fourth paragraphs and the section
titled “Forward-Looking Statement” in the press release attached as Exhibit
99.1 to the Form
6-K), January 10, 2023 (with respect to the first paragraph and the section titled “Forward-Looking
Statement” in the press release attached as Exhibit
99.1 to the Form
6-K), February 9, 2023 (with respect to the first two paragraphs and the section titled
“Forward-Looking Statement” in the press release attached as Exhibit 99.1 to the Form 6-K), February 16, 2023 (with respect to the first two paragraphs and the section titled “Forward-Looking Statement” in the press
release attached as Exhibit 99.1 to the Form 6-K), March 22, 2023 (with respect to the first three and the last two
paragraphs, the section titled “Forward-Looking Statements” and the GAAP financial statements in the press release
attached as Exhibit 99.1 to the Form 6-K), May 23, 2023 (with respect to the press release attached as Exhibit 99.1 to the
Form 6-K), May 25, 2023 (with respect to the press release attached as Exhibit 99.1 to the Form 6-K), June 1, 2023 (with respect to the first two and the fourth paragraphs and the section titled
“Forward-Looking Statement” in the press release attached as Exhibit 99.1 to the Form 6-K), June 12, 2023 (with respect to the press release attached as Exhibit 99.1 to the Form 6-K); August 25, 2023 (with respect to
the first paragraph the sections titled “Financial Review,” “Year-To-Date Operational Highlights,” and
“Forward-Looking Statements” and the financial statements in the press release attached as Exhibit 99.1 to the Form
6-K), August 29, 2023 and August 30, 2023; and |
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The description of our securities contained in our Registration Statement on Form 8-A filed with the SEC on September 9, 2022, including any amendments and reports filed for the purpose of updating such description. |
All subsequent annual reports
on Form 20-F filed by us pursuant to the Exchange Act prior to the termination of the offering shall be deemed to be incorporated by reference
to this prospectus and to be a part hereof from the date of filing of such documents. We may also incorporate part or all of any Report
on Form 6-K subsequently submitted by us to the SEC prior to the termination of the offering by identifying in such Forms 6-K that they,
or certain parts of their contents, are being incorporated by reference herein, and any Forms 6-K so identified shall be deemed to be
incorporated by reference in this prospectus and to be a part hereof from the date of submission of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes
of this prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated
or deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this prospectus. The information we incorporate by reference
is an important part of this prospectus, and later information that we file with the SEC will automatically update and supersede the information
contained in this prospectus.
We will provide you without
charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits
to such documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests
to us at: 2 Yitzhak 5 Ha-Tnufa Street, Yokne’am Illit, 2066736, Israel, Attention: Chief Financial Officer.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are an Israeli company
and are a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act. As a foreign private issuer, we are exempt
from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal
shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
In addition, we are not required
under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly
as U.S. companies whose securities are registered under the Exchange Act. However, we file with the SEC, within 120 days after the end
of each fiscal year, or such applicable time as required by the SEC, an annual report on Form 20-F containing financial statements audited
by an independent registered public accounting firm, and submit to the SEC, on a Form 6-K, unaudited interim financial information.
We maintain a corporate website
at www.wearabledevices.co.il. We will post on our website any materials required to be so posted on such website under applicable corporate
or securities laws and regulations, including any notices of general meetings of our shareholders.
The SEC also maintains a web
site that contains information we file electronically with the SEC, which you can access over the Internet at http://www.sec.gov. Information
contained on, or that can be accessed through, our website and other websites listed in this prospectus do not constitute a part of this
prospectus. We have included these website addresses in this prospectus solely as inactive textual references.
This prospectus is part of
a registration statement on Form F-3 filed by us with the SEC under the Securities Act. As permitted by the rules and regulations of the
SEC, this prospectus does not contain all the information set forth in the registration statement and the exhibits thereto filed with
the SEC. For further information with respect to us and the securities offered hereby, you should refer to the complete registration statement
on Form F-3, which may be obtained from the locations described above. Statements contained in this prospectus or in any prospectus supplement
about the contents of any contract or other document are not necessarily complete. If we have filed any contract or other document as
an exhibit to the registration statement or any other document incorporated by reference in the registration statement, you should read
the exhibit for a more complete understanding of the document or matter involved. Each statement regarding a contract or other document
is qualified in its entirety by reference to the actual document.
Ordinary Shares
Wearable Devices Ltd.
PROSPECTUS SUPPLEMENT
Aegis Capital Corp.
November 9, 2023
Wearable Devices (NASDAQ:WLDS)
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