Wearable Devices Announces First Half 2022 Financial Results

YOKNE’AM ILLIT, Israel, Sept. 29, 2022 (GLOBE NEWSWIRE) -- Wearable Devices Ltd. (Nasdaq: WLDS) (“Wearable Devices” or the “Company”), a growth company developing a non-invasive neural input interface technology for B2B and B2C customers, today announced its financial results for the six months ended June 30, 2022.

Wearable Devices continued its investment in research and development activities and together with the expenses incurred in connection with the Company’s initial public offering (“IPO”), the Company’s net loss increased to $(2,051,000), or $(0.18) per diluted share, for the six months ended June 30, 2022, as compared to a net loss of $(640,000), or $(0.08) per diluted share for the six months ended June 30, 2021.

As previously announced, on September 15, 2022, the Company closed its IPO of 3,750,000 units. Each unit was offered at a public offering price of $4.25 and consisted of one ordinary share and two warrants to purchase one ordinary share each, at an initial exercise price of $4.00 per ordinary share. In addition, the underwriter for the IPO partially exercised its over-allotment option with respect to 1,125,000 warrants to purchase 1,125,000 ordinary shares. The gross proceeds of the offering were approximately $16 million before deducting underwriting discounts, commissions and offering expenses.

Commenting on the IPO and the upcoming goals of the Company, Mr. Asher Dahan, Chairman of the Board and Chief Executive Officer of Wearable Devices, said, “We are thankful to all our investors and very excited about the successful IPO, which is an important step as we bring to market revolutionary solutions that enable the user’s hand to become a universal input device for touchless interaction with technology. We believe that neural-based interfaces will become as common to interaction with wearable computing and digital devices in the near future as the touchscreen is a universal input method for smartphones. This IPO enables us to drive the development of our innovative technology for B2B customers and transition to production on our B2C wearable Mudra wrist band for controlling digital devices using subtle finger movements.

With the Metaverse widely considered to be the future of the internet, we believe the neural control interface market is positioned for growth given that user interfaces frequently dictate the pace of technology advancements. On the B2B side, more than 100 companies have purchased our Mudra Inspire development kit, and 30 of those are multinational technology companies. These companies are exploring various input and control use-cases for their products, across multiple countries and industry sectors, including consumer electronics manufacturers, consumer electronics brands, electronic components manufacturers, IT 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.

On the B2C side of our business, we are launching a smart band for the Apple Watch which allows users to control the watch and operate applications using same-hand touchless finger movements.  We plan to utilize IPO proceeds in part to deliver pre-orders of our Mudra Band and to solidify production capabilities and volumes. In parallel, we intend to increase our marketing efforts to further expand global awareness of our brand,” said Mr. Dahan.

About Wearable Devices Ltd.

Wearable Devices is a growth company developing a non-invasive neural input interface technology in the form of a wrist wearable band for controlling digital devices using subtle finger movements. 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, and we believe that our technology is setting the standard input interface for the Metaverse. Since our technology was introduced to the market, we have been working with both Business-to-Business and Business-to-Consumer customers as part of our push-pull strategy. Combining our own proprietary sensors and Artificial Intelligence, or AI, algorithms into a stylish wristband, our Mudra platform enables users to control digital devices through subtle finger movements and hand gestures, without physical touch or contact. For more information, visit https://www.wearabledevices.co.il/.

Forward-Looking Statement Disclaimer

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “should,” “could,” “seek,” “intend,” “plan,” “goal,” “estimate,” “anticipate” or other comparable terms. For example, we are using forward-looking statements when we are discussing our beliefs regarding the neural control interface market position, Metaverse being the future of the internet, our technological capabilities and our future financial performance. All statements other than statements of historical facts included in this press release regarding our strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: our use of proceeds from the offering; the trading of our ordinary shares or warrants and the development of a liquid trading market; our ability to successfully market our products and services; the acceptance of our products and services by customers; our continued ability to pay operating costs and ability to meet demand for our products and services; the amount and nature of competition from other security and telecom products and services; the effects of changes in the cybersecurity and telecom markets; our ability to successfully develop new products and services; our success establishing and maintaining collaborative, strategic alliance agreements, licensing and supplier arrangements; our ability to comply with applicable regulations; and the other risks and uncertainties described in the prospectus dated September 12, 2022 and our other filings with 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.

Investor Contact:

John Nesbett/Jennifer Belodeau
IMS Investor Relations
203.972.9200
wearablesdevices@imsinvestorrelations.com

WEARABLE DEVICES LTD. AND ITS SUBSIDIARY

 

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

U.S. dollars (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

320

 

 

1,274

 

Trade receivables

 

17

 

 

8

 

Governmental grant receivable

 

55

 

 

62

 

Other receivables and prepaid expenses

 

18

 

 

47

 

Deferred initial public offering cost

 

25

 

 

-

 

Inventories

 

8

 

 

11

 

 

 

 

 

 

 

 

TOTAL CURRENT ASSETS

 

443

 

 

1,402

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

Right-of-use asset

 

25

 

 

-

 

Property and equipment, net

 

47

 

 

43

 

 

 

 

 

 

 

 

TOTAL NON-CURRENT ASSETS

 

72

 

 

43

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

515

 

 

1,445

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEARABLE DEVICES LTD. AND ITS SUBSIDIARY

 

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

U.S. dollars (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payables

 

88

 

 

72

 

Advance payments

 

284

 

 

273

 

Deferred revenues

 

23

 

 

24

 

Accrued payroll and other employment related accruals

 

293

 

 

222

 

Accrued expenses

 

170

 

 

47

 

Lease liability

 

25

 

 

-

 

SAFEs

 

500

 

 

-

 

TOTAL CURRENT LIABILITIES

 

1,383

 

 

638

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

Ordinary shares, NIS 0.01 par value:

 

 

 

 

 

 

Authorized 20,000,000 and 50,000,000 as of December 31, 2021 and June 30, 2022, respectively; Issued and outstanding 11,136,850 shares as of December 31, 2021 as of June 30, 2022

 

31

 

 

31

 

Additional paid-in capital

 

8,065

 

 

7,689

 

Accumulated losses

 

(8,964

)

 

(6,913

)

 

 

 

 

 

 

 

TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)

 

(868

)

 

807

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

 

515

 

 

1,445

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



WEARABLE DEVICES LTD. AND ITS SUBSIDIARY

 

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

U.S. dollars (in thousands)

 

 

 

 

 

 

 

 

 

 

 

Six months 

 

Six months

 

 

ended

 

ended

 

 

June 30,

 

June 30,

 

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

U.S. dollars

 

 

in thousands

 

 

(except per share
amounts)

 

 

 

 

 

Revenues

 

28

 

 

107

 

Cost of materials

 

(5

)

 

(7

)

Research and development, net

 

(944

)

 

(388

)

Sales and marketing expenses, net

 

(471

)

 

(130

)

General and administrative expenses

 

(587

)

 

(188

)

Initial public offering expenses

 

(74

)

 

-

 

OPERATING LOSS

 

(2,053

)

 

(606

)

FINANCING INCOME (EXPENSES),net

 

2

 

 

(34

)

COMPREHENSIVE AND NET LOSS

 

(2,051

)

 

(640

)

 

 

 

 

 

Net loss per ordinary share, basic and diluted

 

(0.18

)

 

(0.08

)

Weighted average number of ordinary shares outstanding basic and diluted

 

11,136,850

 

 

8,282,329

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. dollars (in thousands)

 

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

June 30,

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss

 

(2,051

)

 

(640

)

 

 

 

 

 

Adjustments required to reconcile net loss to net cash used in

 

 

 

 

operating activities -

 

 

 

 

 

 

 

 

 

Depreciation

 

11

 

 

4

 

Share based compensation expenses

 

376

 

 

62

 

Accrued interest on convertible securities

 

-

 

 

21

 

 

 

 

 

 

Changes in operating assets and liabilities items:

 

 

 

 

Decrease in inventory

 

3

 

 

5

 

Increase in trade receivables

 

(9

)

 

-

 

Increase in deferred initial public offering cost

 

(25

)

 

-

 

Decrease (increase) in governmental grants receivables

 

7

 

 

(104

)

Decrease (increase) in other receivables and prepaid expenses

 

29

 

 

(44

)

Increase in advance payments

 

11

 

 

102

 

Increase (decrease) in deferred revenues

 

(1

)

 

2

 

Increase in accounts payable

 

16

 

 

18

 

Increase in accrued payroll and other employment related accruals

 

71

 

 

117

 

Decrease in advance payments on governmental grants

 

-

 

 

(42

)

Increase in accrued expenses

 

123

 

 

8

 

Net cash used in operating activities

 

(1,439

)

 

(491

)

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Purchase of property and equipment

 

(15

)

 

(14

)

Net cash used in investing activities

 

(15

)

 

(14

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from issuance of ordinary shares and warrants, net of issuance cost

 

-

 

 

2,925

 

Proceeds from issuance of SAFEs

 

500

 

 

-

 

Exercise of options to ordinary shares

 

-

 

 

1

 

Net cash provided by financing activities

 

500

 

 

2,926

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

(954

)

 

2,421

 

CASH AT BEGINNING OF PERIOD

 

1,274

 

 

475

 

CASH AT END OF PERIOD

 

320

 

 

2,896

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

Conversion of convertible securities into ordinary shares

 

-

 

 

3,072

 

Right-of-use asset recognized against lease liability

 

56

 

 

-