Wearable Devices Ltd. Announces a Warrant Inducement Transaction for $2.4 Million in Gross Proceeds

Rhea-AI Summary

Wearable Devices (NASDAQ:WLDS) has entered into a warrant inducement agreement with an existing institutional investor, generating $2.4 million in gross proceeds. The transaction involves the immediate exercise of existing warrants for 1,661,000 ordinary shares at $1.45 per share.

In exchange, the investor will receive new unregistered warrants to purchase up to 3,322,000 ordinary shares at $1.71 per share, exercisable upon shareholder approval and expiring five years thereafter. The transaction is expected to close around August 7, 2025. The company plans to use the proceeds for working capital and general corporate purposes.

Positive

• Immediate cash injection of $2.4 million to strengthen working capital
• Successfully incentivized warrant exercise from existing institutional investor
• New warrants priced at $1.71, representing an 18% premium to previous warrants

Negative

• Potential future dilution from 3,322,000 new warrant shares
• New warrants represent approximately 2x the number of shares exercised
• Transaction requires shareholder approval for new warrants to become exercisable

Insights

Financial Analyst

Wearable Devices secured $2.4M through warrant exercise at $1.45/share, issuing new warrants at $1.71 to strengthen working capital position.

Wearable Devices has executed a strategic financial maneuver by inducing an existing institutional investor to immediately exercise warrants, generating $2.4 million in gross proceeds. The investor exercised 1,661,000 warrants at $1.45 per share, and in return, received new unregistered warrants to purchase up to 3,322,000 ordinary shares at $1.71 per share—representing an 18% premium over the exercise price of the original warrants.

This transaction effectively provides Wearable Devices with immediate capital while delaying potential dilution. The new warrants aren't immediately exercisable—they require shareholder approval first and will have a five-year exercise window afterward. This structure gives the company breathing room while securing needed funds for operations.

The proceeds are earmarked for working capital and general corporate purposes, suggesting the company is focusing on strengthening its operational foundation rather than specific strategic initiatives. For a company pioneering AI-based wearable gesture control technology, maintaining adequate working capital is crucial for continued R&D and market development.

This warrant inducement reflects a common capital-raising approach for smaller public companies, particularly those in capital-intensive technology sectors. While it does create potential future dilution if the new warrants are exercised, the premium pricing and staggered structure demonstrate management's attempt to balance immediate funding needs with long-term shareholder value preservation.

Yokneam Illit, Israel, Aug. 06, 2025 (GLOBE NEWSWIRE) -- Wearable Devices Ltd. (the “Company” or “Wearable Devices”) (Nasdaq: WLDS, WLDSW), an award-winning pioneer in artificial intelligence (“AI”)-based wearable gesture control technology, today announced its entry into a warrant inducement agreement with an existing institutional investor of the Company for the immediate exercise of warrants to purchase up to 1,661,000 of its ordinary shares (the “Existing Warrants”) at an exercise price of $1.45 per share for gross cash proceeds of approximately $2.4 million, before deducting  fees and other transaction expenses. The Company intends to use the net proceeds from the warrant inducement transaction for working capital and other general corporate purposes.

In consideration for the immediate exercise in full of the Existing Warrants, the investor will receive in a private placement new unregistered warrants to purchase up to 3,322,000 of its ordinary shares (the “New Warrants”). The New Warrants will have an exercise price of $1.71 per share and will be initially exercisable on the date that shareholder approval of the issuance of the New Warrants is obtained (the “Approval Date”) and will expire five (5) years following the Approval Date. The closing of the warrant inducement transaction is expected to occur on or about August 7, 2025, subject to satisfaction of customary closing conditions.

The private placement of the New Warrants and the shares underlying the New Warrants offered to the institutional investor will be made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder. Accordingly, the securities issued in the private placement may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in this warrant inducement transaction, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Wearable Devices Ltd.

Wearable Devices Ltd. (Nasdaq: WLDS, WLDSW) is a growth company pioneering human-computer interaction through its AI-powered neural input touchless technology. Leveraging proprietary sensors, software, and advanced AI algorithms, the Company’s consumer products - the Mudra Band and Mudra Link - are defining the neural input category both for wrist-worn devices and for brain-computer interfaces. These products enable touch-free, intuitive control of digital devices using gestures across multiple operating systems.

Operating through a dual-channel model of direct-to-consumer sales and enterprise licensing and collaborations, Wearable Devices empowers consumers with stylish, functional wearables for enhanced experiences in gaming, productivity, and extended reality (“XR”). In the business sector, the Company provides enterprise partners with advanced input solutions for immersive and interactive environments, from AR/virtual reality /XR to smart environments.

By setting the standard for neural input in the XR ecosystem, Wearable Devices is shaping the future of seamless, natural user experiences across some of the world’s fastest-growing tech markets. Wearable Devices’ ordinary shares and warrants trade on the Nasdaq Capital Market under the symbols “WLDS” and “WLDSW,” respectively.

Forward-Looking Statements

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,” “will” or other comparable terms. For example, we are using forward-looking statements when we discuss the expected closing date of the warrant inducement transaction, including the closing of the private placement, the use of proceeds, and the satisfaction of customary closing conditions. 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: 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 our annual report on Form 20-F for the year ended December 31, 2024, filed on March 20, 2025 and our other filings with the SEC, including the registration statement on Form F-1, as amended (File No. 333-284023). 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 Relations Contact

Michal Efraty
IR@wearabledevices.co.il

FAQ

What is the size of Wearable Devices' (WLDS) warrant inducement transaction?

The warrant inducement transaction generates $2.4 million in gross proceeds through the exercise of warrants for 1,661,000 ordinary shares at $1.45 per share.

How many new warrants will WLDS issue in the inducement transaction?

WLDS will issue new unregistered warrants to purchase up to 3,322,000 ordinary shares at an exercise price of $1.71 per share.

When will the new WLDS warrants become exercisable?

The new warrants will become exercisable upon obtaining shareholder approval and will expire five years after the approval date.

How will Wearable Devices use the proceeds from the warrant exercise?

The company will use the net proceeds for working capital and other general corporate purposes.

What is the exercise price of the new WLDS warrants compared to the existing ones?

The new warrants have an exercise price of $1.71 per share, compared to $1.45 per share for the existing warrants, representing an 18% premium.