Company to showcase the Mudra Band and drive progress in OpenXR Landscape with industry leaders YOKNEAM ILLIT, ISRAEL, Sept. 05, 2024 (GLOBE NEWSWIRE) -- Wearable Devices Ltd. (the "Company" or "Wearable Devices") (Nasdaq: WLDS, WLDSW), a technology growth company specializing in artificial intelligence ("AI")-powered touchless sensing wearables, today announced that Guy Wagner, President and Chief Scientific Officer of Wearable Devices, will showcase the Mudra Band at the OpenXR Live ("OpenXR") meetup in S ...

Wearable Devices' Technology to Be Showcased in a Demonstration Car at the European Manufacturer's Showroom YOKNEAM ILLIT, ISRAEL, July 29, 2024 (GLOBE NEWSWIRE) -- Wearable Devices Ltd. (the "Company" or "Wearable Devices") (Nasdaq: WLDS, WLDSW), a technology growth company specializing in artificial intelligence ("AI")-powered touchless sensing wearables, today announced a successful proof-of-concept implementation of its touchless control technology in a demonstration car at leading European automobile m ...

Wearable Devices' Technology to Be Showcased in a Demonstration Car at the European Manufacturer's Showroom YOKNEAM ILLIT, ISRAEL, July 29, 2024 (GLOBE NEWSWIRE) -- Wearable Devices Ltd. (the "Company" or "Wearable Devices") (Nasdaq: WLDS, WLDSW), a technology growth company specializing in artificial intelligence ("AI")-powered touchless sensing wearables, today announced a successful proof-of-concept implementation of its touchless control technology in a demonstration car at leading European automobile m ...

About Wearable Devices Ltd. Investor Relations Contact the SEC. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. YOKNEAM ILLIT, ISRAEL, July 24, 2024 (GLOBE NEWSWIRE) -- Wearable Devices Ltd. (the "Company" or "Wearable Devices") (NASDAQ:WLDS, WLDSW))), a technology growth company specializing in artificial intelligence ("AI")-powered touchless se ...

The new Mudra LINK is a versatile and advanced version of the Mudra Band, designed to cater to a broader audience. Unlike its predecessor, the Mudra LINK is not limited to Apple devices, but now brings the Company's technology to Android consumers for the first time. In fact, the Mudra LINK is compatible with any Bluetooth-enabled device, making it an essential tool for seamless interaction across a wide variety of platforms and use cases. The announcement follows closely on the heels of the collaborative i ...

YOKNEAM ILLIT, ISRAEL, July 15, 2024 (GLOBE NEWSWIRE) -- Wearable Devices Ltd. (the "Company" or "Wearable Devices") (NASDAQ:WLDS, WLDSW))), a technology growth company specializing in artificial intelligence ("AI")-powered touchless sensing wearables, today announced a new user experience, feature and functionality for its Mudra Band for Apple Watch. This innovation marks a significant leap forward in how users interact with AI technology, by integrating it into daily life without the need for supplementar ...

YOKNEAM ILLIT, ISRAEL, July 09, 2024 (GLOBE NEWSWIRE) -- Wearable Devices Ltd. (the "Company" or "Wearable Devices") (NASDAQ:WLDS, WLDSW))), a technology growth company specializing in artificial intelligence ("AI")-powered touchless sensing wearables, announced today that a Fortune 500 consumer electronics corporation ("Customer") has purchased a special license for its state-of-the-art Mudra Development Kit ("MDK") to evaluate certain deep-level capabilities. The MDK is designed to provide developers with ...

Forward-Looking Statement Disclaimer YOKNEAM ILLIT, ISRAEL, July 09, 2024 (GLOBE NEWSWIRE) -- Wearable Devices Ltd. (the "Company" or "Wearable Devices") (Nasdaq: WLDS, WLDSW), a technology growth company specializing in artificial intelligence ("AI")-powered touchless sensing wearables, announced today that a Fortune 500 consumer electronics corporation ("Customer") has purchased a special license for its state-of-the-art Mudra Development Kit ("MDK") to evaluate certain deep-level capabilities. Asher Daha ...

The successful completion of this integration stage, previously announced, enhances the capabilities of XR environments and highlights Wearable Devices' dedication to advancing the frontier of wearable technology. By leveraging the precise gesture recognition enabled by Mudra technology, the Snapdragon Spaces™ platform will offer users a more natural and intuitive interface, thereby elevating the overall XR experience. Forward-Looking Statement Disclaimer Snapdragon and Snapdragon Spaces are trademarks or r ...

Introduction [Company Overview](index=5&type=section&id=Company%20Overview) Wearable Devices Ltd. (WLDS), an Israeli growth company, develops non-invasive neural input interfaces, commercializing its 'Mudra Band' for Apple Watch and completing its Nasdaq IPO in September 2022 - The company develops a non-invasive neural input interface as a wrist wearable band for touchless control of digital devices[20](index=20&type=chunk) - The company transitioned from R&D to commercializing its technology for both Business-to-Business (B2B) and Business-to-Consumer (B2C) products[20](index=20&type=chunk) - Its first B2C product, the 'Mudra Band,' is an Apple Watch accessory enabling touchless control of Apple ecosystem devices[20](index=20&type=chunk) - The company completed its IPO on September 15, 2022, listing ordinary shares (WLDS) and warrants (WLDSW) on the Nasdaq Capital Market[21](index=21&type=chunk) PART I [Key Information](index=7&type=section&id=ITEM%203.%20KEY%20INFORMATION.) This section outlines significant business, industry, financial, intellectual property, and operational risks, including going concern issues, reliance on unproven technology, market competition, and potential Nasdaq delisting [Risk Factors](index=7&type=section&id=D.%20Risk%20Factors.) The company faces substantial risks across business, industry, financial condition, intellectual property, and Israeli operations, including going concern issues, Nasdaq delisting risk, reliance on unproven SNC technology, supplier dependence, and geopolitical instability - The company's FY 2023 financial statements include a 'going concern' opinion, raising substantial doubt about its ability to continue operations and secure new financing[29](index=29&type=chunk)[42](index=42&type=chunk)[111](index=111&type=chunk) - The company risks Nasdaq delisting for failing to meet the minimum bid price requirement of **$1.00 per share**[42](index=42&type=chunk)[129](index=129&type=chunk) - There is no guarantee the company's Surface Nerve Conductance (SNC) technology will dominate wearable device input, facing competition from alternative methods[29](index=29&type=chunk)[38](index=38&type=chunk)[44](index=44&type=chunk) - The company relies on a limited number of suppliers and single contract manufacturers, increasing risks of supply interruptions and delays[38](index=38&type=chunk)[65](index=65&type=chunk) - Political, economic, and military instability in Israel, including the ongoing Israel-Hamas war, could adversely affect operations, fundraising, and product sales[42](index=42&type=chunk)[158](index=158&type=chunk) [Information on the Company](index=41&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY.) This section details the company's history, business operations, organizational structure, and physical assets, covering its transition to commercialization, 'Mudra' technology, B2B/B2C offerings, and growth strategy [History and Development of the Company](index=41&type=section&id=A.%20History%20and%20Development%20of%20the%20Company.) Wearable Devices Ltd., incorporated in Israel in 2014, develops non-invasive neural input interfaces, with its shares and warrants listed on Nasdaq, qualifying as an 'emerging growth company' and 'foreign private issuer' - The company was incorporated in Israel in 2014, developing a non-invasive neural input interface for digital device control via a wearable wristband[206](index=206&type=chunk) - The company is classified as an 'emerging growth company' and 'foreign private issuer', exempting it from certain U.S. SEC reporting and governance requirements[208](index=208&type=chunk)[209](index=209&type=chunk) [Business Overview](index=42&type=section&id=B.%20Business%20Overview.) The company commercializes its 'Mudra' neural interface technology via B2B and B2C strategies, including the Mudra Band for Apple Watch and development kits for AR/VR, leveraging proprietary sensors and AI for gesture control, and expanding into new markets - The company envisions the user's hand as a universal input device for touchless interaction, positioning its technology as a standard for the Metaverse[212](index=212&type=chunk) - The company commenced shipment of its first B2C product, the 'Mudra Band' for Apple Watch, and plans to launch the 'Mudra XR wristband' for smart glasses in **Q4 2024**[211](index=211&type=chunk)[253](index=253&type=chunk) - The B2B strategy involves selling the Mudra Development Kit to over **100 companies**, including **30 multinational technology firms**, aiming for licensing agreements[217](index=217&type=chunk) - The company's technology is a vertically integrated platform combining hardware, software (AI algorithms), and humanware, creating a significant competitive moat[223](index=223&type=chunk)[237](index=237&type=chunk) - The company holds **two U.S. patents** for its wrist-wearable gesture control system, with additional patent applications pending in the U.S. and China[310](index=310&type=chunk)[311](index=311&type=chunk) [Organizational Structure](index=61&type=section&id=C.%20Organizational%20Structure.) Wearable Devices Ltd. has one wholly-owned subsidiary, Mudra Wearable, Inc., incorporated in Delaware, responsible for U.S. marketing and distribution with two full-time staff - The company has a single wholly-owned subsidiary, Mudra Wearable, Inc., based in Delaware, handling U.S. marketing and distribution[328](index=328&type=chunk) [Property, Plant and Equipment](index=61&type=section&id=D.%20Property,%20Plant%20and%20Equipment.) The company's headquarters are in a leased **7,880 sq. ft.** facility in Yokne'am Illit, Israel, with its U.S. subsidiary leasing a small office in California, both considered sufficient - The company leases its main headquarters of approximately **7,880 sq. ft.** in Yokne'am Illit, Israel, with the lease expiring **January 31, 2025**[329](index=329&type=chunk) - The U.S. subsidiary leases an **80 sq. ft.** office in Redwood City, California on a month-to-month basis[330](index=330&type=chunk) [Operating and Financial Review and Prospects](index=62&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS.) This section analyzes the company's financial condition and operations, noting increased revenues to **$82 thousand** but a widened net loss to **$7.8 million** in 2023 due to higher operating expenses, and addresses going concern issues, liquidity, cash flow, and critical accounting estimates [Operating Results](index=62&type=section&id=A.%20Operating%20Results.) For the year ended December 31, 2023, revenues increased **82%** to **$82 thousand**, but operating loss grew to **$8.2 million** and net loss to **$7.8 million** due to significant increases in R&D, sales and marketing, and G&A expenses Results of Operations (Years Ended December 31) | | 2023 | 2022 | | :--- | :--- | :--- | | **Revenues** | $82 thousand | $45 thousand | | **Operating loss** | $(8,186) thousand | $(6,458) thousand | | **Net loss** | $(7,814) thousand | $(6,496) thousand | - Revenues increased by **82%** in 2023, primarily due to B2C Mudra Band sales[351](index=351&type=chunk) - R&D expenses increased by **46%** to **$3.3 million** in 2023, mainly due to higher labor, materials, and subcontractor costs for Mudra Band production[353](index=353&type=chunk) - Sales and marketing expenses increased by **47%** to **$2.0 million** in 2023, driven by higher labor costs, exhibition and travel, and advertising[354](index=354&type=chunk) - General and administrative expenses rose by **48%** to **$2.9 million** in 2023, mainly due to increased labor costs, insurance, and professional services for the public company[355](index=355&type=chunk) [Liquidity and Capital Resources](index=65&type=section&id=B.%20Liquidity%20and%20Capital%20Resources.) The company faces substantial doubt about its going concern ability due to recurring losses and negative cash flows, with an accumulated deficit of **$21.2 million** as of December 31, 2023, and existing cash expected to fund operations only through **June 2024**, alongside contingent royalty obligations to the IIA - The company has suffered recurring losses and negative cash flows, with dependency on external funding raising substantial doubt about its ability to continue as a going concern[359](index=359&type=chunk) - As of **December 31, 2023**, the company had an accumulated deficit of **$21.2 million** and expects existing cash to fund operations only through **June 2024**[361](index=361&type=chunk) Cash Flow Summary (in thousands USD) | | For the Year Ended December 31, | | :--- | :---: | :---: | | | **2023** | **2022** | | Net cash used in operating activities | $(8,434) | $(5,714) | | Net cash used in investing activities | $(4,248) | $(66) | | Net cash provided by financing activities | $3,119 | $14,879 | | **Net (decrease) increase in cash** | **$(9,563)** | **$9,099** | - The company has a contingent obligation to pay royalties to the Israel Innovation Authority (IIA) up to a principal amount of **$2.2 million** as of **December 31, 2023**, based on future sales of IIA-funded products[383](index=383&type=chunk) [Research and Development, Patents and Licenses](index=69&type=section&id=C.%20Research%20and%20development,%20patents%20and%20licenses,%20etc.) The company incurred net R&D expenses of approximately **$3.3 million** in 2023 and **$2.3 million** in 2022, primarily due to higher labor, material, and subcontractor costs for Mudra Band production, partially offset by IIA participation Net Research and Development Expenses | Year Ended December 31, | Amount (in thousands USD) | | :--- | :--- | | 2023 | $3,316 | | 2022 | $2,271 | [Trend Information](index=69&type=section&id=D.%20Trend%20information.) As of the report date, the company employs **29 full-time** and **10 part-time** staff, planning to maintain staffing and expenses in 2024 to support business development, R&D, and Mudra Band manufacturing, with a target **Q4 2024** launch for the Mudra XR wristband - The company plans to launch its new 'Mudra XR wristband' product by **Q4 2024**[390](index=390&type=chunk) - The company intends to maintain its current employee count (**29 full-time**, **10 part-time**) and expense levels through 2024 to support R&D, business development, and manufacturing[389](index=389&type=chunk) [Critical Accounting Estimates](index=69&type=section&id=E.%20Critical%20Accounting%20Estimates.) The company's critical accounting estimates involve significant management judgment, particularly in revenue recognition for multi-deliverable B2B transactions, accounting for government grants, and fair valuing share-based compensation using the Black-Scholes model - Revenue recognition requires significant judgment, especially for B2B pilot transactions and development kits with multiple performance obligations (e.g., hardware, API, support) that must be identified and allocated[392](index=392&type=chunk)[395](index=395&type=chunk)[396](index=396&type=chunk) - Share-based compensation is valued using the Black-Scholes model, requiring assumptions about expected term, volatility, dividend yield, and risk-free interest rates[398](index=398&type=chunk) - Government grants from the IIA are recognized when entitled based on costs incurred or milestones, recorded as a deduction from R&D or sales and marketing expenses[397](index=397&type=chunk) [Directors, Senior Management and Employees](index=71&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES.) This section details the company's leadership, compensation, board structure, and employees, including executive backgrounds, 2023 compensation, staggered board, committee compositions, adherence to Israeli corporate law, Nasdaq exemptions, and employee share option plans [Directors and Senior Management](index=71&type=section&id=A.%20Directors%20and%20Senior%20Management.) The company is led by co-founders Asher Dahan (CEO and Chairman) and Guy Wagner (CSO and President), with a five-member board including two independent directors, structured into three staggered classes - Asher Dahan serves as both Chief Executive Officer and Chairman of the Board, a dual role permitted for **five years** post-IPO under Israeli law[400](index=400&type=chunk) - The board of directors comprises **five members**, including co-founders Asher Dahan and Guy Wagner, and independent directors Yaacov Goldman and Ilana Lurie[399](index=399&type=chunk) [Compensation](index=74&type=section&id=B.%20Compensation.) For FY 2023, total compensation for all **11 directors and senior management** was approximately **$2.22 million**, including salaries, benefits, and share-based compensation, with employment agreements for executive officers including non-competition and confidentiality clauses Aggregate Compensation for Directors and Senior Management (2023) | Compensation Type | Amount (USD) | | :--- | :--- | | Salary, bonuses and Related Benefits | $1,687,179 | | Pension, Retirement and Other Similar Benefits | $409,577 | | Share Based Compensation | $123,303 | | **Total** | **$2,220,059** | Compensation of 5 Most Highly Compensated Officers (2023) | Executive Officer | Total Compensation (USD) | | :--- | :--- | | Alon Mualem | $327,157 | | Barry Kaplan | $304,181 | | Leeor Langer | $296,601 | | Asher Dahan | $292,283 | | Guy Wagner | $291,182 | [Board Practices](index=75&type=section&id=C.%20Board%20Practices.) The company's **five-member** board is staggered into three classes, with a combined Audit, Compensation, and Financial Statement Examination Joint Committee, following Israeli corporate law which differs from U.S. standards on director nominations and compensation, and utilizes a **2015 Share Option Plan** with **3,188,597 shares** reserved - The board of directors is staggered into **three classes**, with each class serving a **three-year term**[422](index=422&type=chunk) - The company formed a Joint Committee combining Audit, Compensation, and Financial Statement Examination functions, chaired by Yaacov Goldman[466](index=466&type=chunk) - The company adopted the **2015 Share Option Plan**, reserving up to **3,188,597 Ordinary Shares** for grants to employees, consultants, and directors[499](index=499&type=chunk) - The company provides for indemnification, insurance, and exculpation for its office holders to the fullest extent permitted by Israeli law[475](index=475&type=chunk)[479](index=479&type=chunk)[481](index=481&type=chunk) [Employees](index=89&type=section&id=D.%20Employees.) As of the report date, Wearable Devices employs **29 full-time** and **10 part-time** staff, primarily in Israel, with additional consultants and subcontractors, and is subject to Israeli labor laws despite no union representation - As of the report date, the company has **29 full-time employees**, **10 part-time employees**, and several external consultants and subcontractors[504](index=504&type=chunk) - None of the employees are union members, but the company is subject to certain Israeli labor laws and collective bargaining agreement provisions through extension orders[505](index=505&type=chunk) [Major Shareholders and Related Party Transactions](index=90&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS.) This section details beneficial ownership as of **March 13, 2024**, with co-founders Guy Wagner (**8.8%**), Asher Dahan (**6.6%**), and Leeor Langer (**6.6%**), and Alumot (**5.9%**) as major shareholders, and related party transactions primarily involving executive employment and option grants [Major Shareholders](index=90&type=section&id=A.%20Major%20Shareholders.) As of **March 13, 2024**, major shareholders include co-founders Guy Wagner (**8.8%**), Asher Dahan (**6.6%**), Leeor Langer (**6.6%**), and Alumot (**5.9%**), with all directors and senior management owning **25.4%**, and ownership percentages decreased in 2023 due to dilution Beneficial Ownership of Major Shareholders (as of March 13, 2024) | Holder | Percentage Owned | | :--- | :--- | | Guy Wagner (Co-founder, Director) | 8.8% | | Asher Dahan (Co-founder, CEO) | 6.6% | | Leeor Langer (Co-founder, CTO) | 6.6% | | Alumot | 5.9% | | All directors and senior management as a group | 25.4% | - The percentage ownership of major shareholders, including co-founders, decreased during 2023 due to dilution from warrant exercises in June and a public offering in November[514](index=514&type=chunk) [Related Party Transactions](index=92&type=section&id=B.%20Related%20Party%20Transactions.) The company's related party transactions primarily involve standard employment and compensation agreements with executive officers and directors, including salaries, bonuses, and option grants under the **2015 Share Option Plan**, with customary non-competition and confidentiality clauses - The company has entered into written employment agreements with all executive officers, including customary provisions for non-competition, confidentiality, and invention assignment[520](index=520&type=chunk) - The company has granted stock options to its officers and certain directors under its **2015 Share Option Plan**[522](index=522&type=chunk) [Financial Information](index=93&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION.) This section refers to detailed financial statements in Item 18, confirms no material legal proceedings, states the company has never paid cash dividends and does not plan to, citing Israeli law restrictions, and notes no significant changes since the financial statements date - The company has never declared or paid cash dividends and does not plan to in the foreseeable future[528](index=528&type=chunk) - Under Israeli law, dividend distributions are limited and depend on the company meeting specific earnings and solvency criteria[529](index=529&type=chunk) - The company was not subject to any material legal proceedings during the period covered by the financial statements[527](index=527&type=chunk) [The Offer and Listing](index=94&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING.) The company's Ordinary Shares (WLDS) and Warrants (WLDSW) began trading on Nasdaq Capital Market on **September 13, 2022**, but received a non-compliance notice on **October 24, 2023**, for failing the **$1.00** minimum bid price, with a compliance deadline of **April 22, 2024**, and a potential **180-day** extension - The company's Ordinary Shares (WLDS) and Warrants (WLDSW) commenced trading on the Nasdaq Capital Market on **September 13, 2022**[533](index=533&type=chunk) - On **October 24, 2023**, the company was notified by Nasdaq of non-compliance with the minimum bid price requirement, as its share price was below **$1.00** for **30 consecutive business days**[535](index=535&type=chunk) - The company has until **April 22, 2024**, to regain compliance, with a possible **180-day** extension, and is considering a reverse stock split to meet the requirement[535](index=535&type=chunk)[536](index=536&type=chunk) [Additional Information](index=94&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION.) This section covers supplementary corporate information, including material contracts, exchange controls, and detailed Israeli and U.S. tax considerations, such as corporate tax rates, IIA grants, and the potential risk of Passive Foreign Investment Company (PFIC) classification for U.S. holders [Material Contracts](index=95&type=section&id=C.%20Material%20Contracts.) The company's material contracts from the past two years include a Senior Credit Facility Agreement with L.I.A. Pure Capital Ltd. from **July 2022**, its Compensation Policy, and a Form of Indemnification Agreement for officers and directors - Key material contracts include the Senior Credit Facility Agreement with L.I.A. Pure Capital Ltd., the company's Compensation Policy, and the Form of Indemnification Agreement[548](index=548&type=chunk) [Exchange Controls](index=95&type=section&id=D.%20Exchange%20Controls.) Currently, no Israeli currency control restrictions affect dividend payments or share distributions to non-residents, though legislation allows for future imposition, and non-resident ownership is unrestricted except for citizens of countries at war with Israel - No Israeli currency control restrictions currently apply to dividend payments or proceeds from share sales for non-residents, although the government retains the power to impose them[543](index=543&type=chunk) [Taxation](index=95&type=section&id=E.%20Taxation.) This subsection details tax implications for the company and shareholders, including Israel's **23%** corporate tax rate, IIA grant royalty obligations and restrictions, and the significant risk of Passive Foreign Investment Company (PFIC) classification for U.S. shareholders - The standard corporate tax rate for Israeli companies is **23%**[549](index=549&type=chunk) - The company receives grants from the Israel Innovation Authority (IIA), subjecting it to royalty payments on future revenues and restrictions on transferring manufacturing or know-how outside of Israel[553](index=553&type=chunk)[554](index=554&type=chunk)[555](index=555&type=chunk) - There is a risk the company may be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, potentially leading to adverse tax treatment for U.S. shareholders on distributions and dispositions of shares[144](index=144&type=chunk)[588](index=588&type=chunk) - Dividends paid to non-Israeli residents are generally subject to a **25%** withholding tax, or **30%** for a 'substantial shareholder', unless reduced by an applicable tax treaty[574](index=574&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=105&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) The company's primary market risk is foreign currency exchange rates between the U.S. dollar and New Israeli Shekel (NIS), as most operating expenses are NIS-denominated; a hypothetical **10%** adverse change would have increased 2023 operating expenses by approximately **$580 thousand** - The company's main market risk is foreign currency exchange risk, as its revenues are in U.S. dollars while most operating expenses are in New Israeli Shekels (NIS)[608](index=608&type=chunk) - In 2023, the NIS devalued against the U.S. dollar by **3.1%**; a hypothetical **10%** adverse change in the exchange rate would have increased 2023 operating expenses by approximately **$580 thousand**[609](index=609&type=chunk) - The company partially hedged its foreign currency risk in 2023, after not hedging at all in 2022[610](index=610&type=chunk) PART II [Material Modifications to the Rights of Security Holders and Use of Proceeds](index=106&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS.) The company issued **3,750,000 Ordinary Shares** and **8,625,000 Warrants** in its IPO, raising approximately **$16 million** in gross proceeds, with net proceeds used as described in the final prospectus - The company raised approximately **$16 million** in gross proceeds from its IPO through the issuance of **3,750,000 Ordinary Shares** and **8,625,000 Warrants**[618](index=618&type=chunk) [Controls and Procedures](index=106&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES.) As of **December 31, 2023**, management concluded the company's disclosure controls and internal control over financial reporting (based on COSO) were effective, with no auditor attestation report required as an emerging growth company - Management concluded that as of **December 31, 2023**, the company's disclosure controls and procedures were effective[621](index=621&type=chunk) - Based on the COSO framework, management concluded that the company's internal control over financial reporting was effective as of **December 31, 2023**[625](index=625&type=chunk) - As an emerging growth company, the company is exempt from providing an auditor's attestation report on internal control over financial reporting[626](index=626&type=chunk) [Corporate Governance and Other Disclosures](index=108&type=section&id=ITEM%2016.%20CORPORATE%20GOVERNANCE%20AND%20OTHER%20DISCLOSURES) This section covers governance and disclosures, including Mr. Goldman's designation as an audit committee financial expert, the Code of Business Ethics, **$138,500** in 2023 accountant fees, adherence to Israeli corporate governance as a foreign private issuer, and the audit committee's oversight of the cybersecurity risk management program [Audit Committee Financial Expert](index=108&type=section&id=ITEM%2016A.%20AUDIT%20COMMITTEE%20FINANCIAL%20EXPERT.) The board determined Mr. Yaacov Goldman qualifies as an 'audit committee financial expert' under SEC and Nasdaq rules, with all audit committee members being independent - The board has identified Mr. Yaacov Goldman as the audit committee financial expert[629](index=629&type=chunk) [Code of Ethics](index=108&type=section&id=ITEM%2016B.%20CODE%20OF%20ETHICS.) The company adopted a written Code of Business Ethics applicable to all directors, officers, and employees, available on its website, with amendments or waivers disclosed per SEC regulations - A Code of Business Ethics has been adopted and applies to all directors, officers, and employees[630](index=630&type=chunk) [Principal Accountant Fees and Services](index=108&type=section&id=ITEM%2016C.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES.) The company paid its principal accountant, Ziv Haft (BDO), **$138,500** in 2023 and **$112,000** in 2022, with 2023 fees primarily for audit services, all pre-approved by the audit committee Accountant Fees (in USD) | Fee Type | 2023 | 2022 | | :--- | :--- | :--- | | Audit fees | $136,000 | $100,000 | | Audit-related fees | - | $12,000 | | Tax fees | $2,500 | - | | All other fees | - | - | | **Total** | **$138,500** | **$112,000** | [Corporate Governance](index=109&type=section&id=ITEM%2016G.%20CORPORATE%20GOVERNANCE.) As a foreign private issuer, the company follows Israeli corporate governance practices instead of certain Nasdaq rules, with divergences in quorum requirements, director nominations, officer compensation approval, and shareholder approval for certain actions, all compliant with Israeli law - The company, as a foreign private issuer, follows Israeli corporate governance practices instead of certain Nasdaq rules[640](index=640&type=chunk)[641](index=641&type=chunk) - Exemptions from Nasdaq rules include director nominations, officer compensation approval, and shareholder approval requirements for certain transactions, which follow Israeli Companies Law procedures[642](index=642&type=chunk)[644](index=644&type=chunk) [Cybersecurity](index=111&type=section&id=ITEM%2016K.%20CYBERSECURITY.) The board and audit committee oversee the company's cybersecurity risk management program, which includes governance, cross-functional collaboration, technical safeguards, recovery planning, employee education, and third-party assessments, with no material cybersecurity attacks reported as of the report date - The audit committee oversees the company's cybersecurity risk management program, integrated into its overall risk management[648](index=648&type=chunk) - The cybersecurity strategy includes technical safeguards, recovery planning, regular employee training, and periodic assessments by third parties[649](index=649&type=chunk)[650](index=650&type=chunk) - As of the report date, the company states it has not experienced any cybersecurity attacks that have materially affected or are reasonably likely to affect its business, operations, or financial condition[652](index=652&type=chunk) PART III [Financial Statements](index=113&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS.) This section presents the company's audited consolidated financial statements for **FY 2023** and **2022**, prepared under U.S. GAAP, with the auditor's report including a 'Going Concern' paragraph due to recurring losses, negative cash flows, and external funding dependency, detailing assets, liabilities, equity, comprehensive loss, and cash flows - The independent auditor's report contains an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern due to recurring losses, negative cash flows, and dependence on external funding[670](index=670&type=chunk) Consolidated Balance Sheet Highlights (as of Dec 31, in thousands USD) | | 2023 | 2022 | | :--- | :--- | :--- | | **Total Assets** | $7,592 | $11,224 | | Cash and cash equivalents | $810 | $10,373 | | **Total Liabilities** | $2,066 | $1,244 | | **Total Shareholders' Equity** | $5,526 | $9,980 | Consolidated Statements of Comprehensive Loss (Year ended Dec 31, in thousands USD) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Revenues | $82 | $45 | $142 | | Operating Loss | $(8,186) | $(6,458) | $(2,669) | | **Net Loss** | **$(7,814)** | **$(6,496)** | **$(2,614)** | | Net loss per share | $(0.48) | $(0.53) | $(0.27) | - As of **December 31, 2023**, the company had an accumulated deficit of **$21.2 million**[693](index=693&type=chunk) - The company has a contingent liability to pay royalties to the Israel Innovation Authority (IIA) with a maximum principal of **$2.2 million** plus interest, contingent upon future sales of funded products[753](index=753&type=chunk)