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What changed in Wearable Devices Ltd.'s 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of Wearable Devices Ltd.'s 2022 and 2023 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+350 added−359 removedSource: 20-F (2024-03-15) vs 20-F (2023-03-22)

Top changes in Wearable Devices Ltd.'s 2023 20-F

350 paragraphs added · 359 removed · 272 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

51 edited+5 added−18 removed255 unchanged
Biggest changeWe expect that this trend will continue as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including: ● the level of demand for our neural input devices and our ability to maintain or increase the size and engagement of our users; ● the demand and volume of our licensing agreements with third-party companies such as computer electronics manufacturers; ● the continued market acceptance of, and the growth of the market for, neural input technology for wearable computing devices; ● the timing and success of new product and service introductions by us or our competitors or any other change in the competitive landscape of our market; ● pricing pressure as a result of competition or otherwise; ● delays or disruptions in our supply, manufacturing, or distribution chain; ● errors in our forecasting of the demand for our products, which could lead to lower revenue or increased costs, or both; ● the mix of products sold in a reported period; ● seasonal buying patterns of consumers; ● increases in and timing of sales and marketing and other operating expenses that we may incur to grow and expand our operations and to remain competitive; ● insolvency, credit, or other difficulties confronting our suppliers, contract manufacturers, or logistics providers leading to disruptions in our supply or distribution chain; ● levels of product returns, stock rotation, and price protection rights; ● adverse litigation judgments, settlements, or other litigation-related costs; ● changes in the legislative or regulatory environment, such as with respect to privacy, information security, consumer product safety, and advertising; ● product recalls, regulatory proceedings, or other adverse publicity about our products; ● fluctuations in foreign exchange rates; ● costs related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs; and ● general economic conditions in either domestic or international markets. 17 Any one of the factors above or the cumulative effect of some of the factors above may result in significant fluctuations in our operating results.
Biggest changeWe expect that this trend will continue as a result of a number of factors, many of which are outside of our control and may be difficult to predict, including: ● the level of demand for our neural input devices and our ability to maintain or increase the size and engagement of our users; ● the demand and volume of our licensing agreements with third-party companies such as computer electronics manufacturers; ● the continued market acceptance of, and the growth of the market for, neural input technology for wearable computing devices; ● the timing and success of new product and service introductions by us or our competitors or any other change in the competitive landscape of our market; ● pricing pressure as a result of competition or otherwise; ● delays or disruptions in our supply, manufacturing, or distribution chain; ● errors in our forecasting of the demand for our products, which could lead to lower revenue or increased costs, or both; ● the mix of products sold in a reported period; ● seasonal buying patterns of consumers; ● increases in and timing of sales and marketing and other operating expenses that we may incur to grow and expand our operations and to remain competitive; ● insolvency, credit, or other difficulties confronting our suppliers, contract manufacturers, or logistics providers leading to disruptions in our supply or distribution chain; ● levels of product returns, stock rotation, and price protection rights; ● adverse litigation judgments, settlements, or other litigation-related costs; ● changes in the legislative or regulatory environment, such as with respect to privacy, information security, consumer product safety, and advertising; ● product recalls, regulatory proceedings, or other adverse publicity about our products; ● fluctuations in foreign exchange rates; ● costs related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs; ● 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; and ● general economic conditions in either domestic or international markets. 17 Any one of the factors above or the cumulative effect of some of the factors above may result in significant fluctuations in our operating results.
In addition, we cannot assure you that our investment in research and development will lead to any corresponding revenue, in which case our business, results of operations and financial condition would also be adversely affected. 3 The failure to effectively manage the introduction of new or enhanced products may adversely affect our operating results.
In addition, we cannot assure you that our investment in research and development will lead to any corresponding revenue, in which case our business, results of operations and financial condition would also be adversely affected. The failure to effectively manage the introduction of new or enhanced products may adversely affect our operating results.
If we are not able to compete effectively against our current or potential competitors, our prospects, operating results, and financial condition could be adversely affected. An economic downturn or economic uncertainty may adversely affect consumer discretionary spending and demand for our products and services. Our products and services may be considered discretionary items for consumers.
If we are not able to compete effectively against our current or potential competitors, our prospects, operating results, and financial condition could be adversely affected. 12 An economic downturn or economic uncertainty may adversely affect consumer discretionary spending and demand for our products and services. Our products and services may be considered discretionary items for consumers.
Our shareholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds. The Warrants are listed on Nasdaq separately from our Ordinary Shares and this may provide investors with an arbitrage opportunity that could adversely affect the trading price of our Ordinary Shares.
Our shareholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds. 19 The Warrants are listed on Nasdaq separately from our Ordinary Shares and this may provide investors with an arbitrage opportunity that could adversely affect the trading price of our Ordinary Shares.
Our sensitivity to economic cycles and any related fluctuation in consumer demand for our products and services may have an adverse effect on our operating results and financial condition. 13 Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our services and have a negative impact on our business.
Our sensitivity to economic cycles and any related fluctuation in consumer demand for our products and services may have an adverse effect on our operating results and financial condition. Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our services and have a negative impact on our business.
However, Israeli laws and regulations applicable to Israeli companies do not contain any provisions comparable to the U.S. proxy rules, the U.S. rules relating to the filing of reports on Form 10-Q or 8-K or the U.S. rules relating to liability for insiders who profit from trades made in a short period of time, as referred to above. 22 Furthermore, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic registrants that are non-accelerated filers are required to file their annual report on Form 10-K within 90 days after the end of each fiscal year.
However, Israeli laws and regulations applicable to Israeli companies do not contain any provisions comparable to the U.S. proxy rules, the U.S. rules relating to the filing of reports on Form 10-Q or 8-K or the U.S. rules relating to liability for insiders who profit from trades made in a short period of time, as referred to above. 21 Furthermore, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic registrants that are non-accelerated filers are required to file their annual report on Form 10-K within 90 days after the end of each fiscal year.
If the use of the internet is adversely affected by these issues, demand for our services could suffer. Our business is subject to a variety of U.S. and international laws and regulations, including those regarding privacy, cybersecurity and data protection.
If the use of the internet is adversely affected by these issues, demand for our services could suffer. 13 Our business is subject to a variety of U.S. and international laws and regulations, including those regarding privacy, cybersecurity and data protection.
Our servers and equipment may be subject to cyber-security crimes, ransom hijacking, computer viruses, break-ins and similar disruptions from unauthorized tampering with computer systems. We can provide no assurance that our current IT system are fully protected against third-party intrusions, viruses, hacker attacks, information or data theft or other similar threats.
Our servers and equipment may be subject to cyber-security crimes, ransom hijacking, computer viruses, break-ins and similar disruptions from unauthorized tampering with computer systems. We can provide no assurance that our current IT system is fully protected against third-party intrusions, viruses, hacker attacks, information or data theft or other similar threats.
Risks Related to Ownership of our Ordinary Shares and Warrants ● Our current officers and directors and holders of more than 5% of our Ordinary Shares currently beneficially own an aggregate of approximately 55.1% of our Ordinary Shares and are able to exert significant control over matters submitted to our shareholders for approval; ● Our Warrants, which are speculative in nature, are listed on Nasdaq separately and may provide investors with an arbitrage opportunity that could adversely affect the trading price of our Ordinary Shares; ● Certain warrant holders may be entitled to receive additional Ordinary Shares, to the extent we engage in future dilutive issuances; ● We do not know whether a market for the Ordinary Shares or Warrants will be sustained or what the trading price of the Ordinary Shares or Warrants will be.
Risks Related to Ownership of our Ordinary Shares and Warrants ● Our current officers and directors and holders of more than 5% of our Ordinary Shares currently beneficially own an aggregate of approximately 32.2% of our Ordinary Shares and are able to exert significant control over matters submitted to our shareholders for approval; ● Our Warrants, which are speculative in nature, are listed on Nasdaq separately and may provide investors with an arbitrage opportunity that could adversely affect the trading price of our Ordinary Shares; ● Certain warrant holders may be entitled to receive additional Ordinary Shares, to the extent we engage in future dilutive issuances; ● We do not know whether a market for the Ordinary Shares or Warrants will be sustained or what the trading price of the Ordinary Shares or Warrants will be.
In part because we have incurred losses in each year since our inception, our audited consolidated financial statements for the period ended December 31, 2021 contained an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.
In part because we have incurred losses in each year since our inception, our audited consolidated financial statements for the period ended December 31, 2023 contained an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2023.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2024.
These events and conditions, along with other matters, indicated that a material uncertainty existed as of December 31, 2021, that could cast significant doubt on our ability to continue as a going concern. The financial statements for the year ended December 31, 2022 have been prepared assuming that we will continue as a going concern.
These events and conditions, along with other matters, indicated that a material uncertainty existed as of December 31, 2023, that could cast significant doubt on our ability to continue as a going concern. The financial statements for the year ended December 31, 2023 have been prepared assuming that we will continue as a going concern.
Concerns regarding privacy, data protection, and information security may also cause some of our customers to stop using our products and platform and decline to renew their subscriptions, and make it harder to acquire new customers. To the extent we do not effectively address these risks, our business, financial condition, results of operations, and prospects could be materially adversely affected.
Concerns regarding privacy, data protection, and information security may also cause some of our customers to stop using our products and platform and make it harder to acquire new customers. To the extent we do not effectively address these risks, our business, financial condition, results of operations, and prospects could be materially adversely affected.
However, we estimate there will be a three-to-five-year period from the time we are first introduced to such a customer to signing a licensing agreement and as of March 20, 2023, we have not entered into any licensing agreements. This is a significant amount of time and negotiations may break down during the course of such negotiations.
However, we estimate there will be a three-to-five-year period from the time we are first introduced to such a customer to signing a licensing agreement and as of March 13, 2024, we have not entered into any licensing agreements. This is a significant amount of time and negotiations may break down during the course of such negotiations.
We were granted 180 calendar days, or until May 22, 2023, to regain compliance with the Minimum Bid Price Requirement. In the event we do not regain compliance with the Minimum Bid Price Requirement by May 22, 2023, we may be eligible for an additional 180-calendar day grace period.
We were granted 180 calendar days, or until April 22, 2024, to regain compliance with the Minimum Bid Price Requirement. In the event we do not regain compliance with the Minimum Bid Price Requirement by April 22, 2024, we may be eligible for an additional 180-calendar day grace period.
There can be no assurance that any limitations of liability provisions in our subscriptions with customers would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim.
There can be no assurance that any limitations of liability provisions with customers would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim.
We have recently begun to spend significant amounts on advertising and other marketing campaigns to acquire new users, and we expect to increase these advertising and marketing efforts, which may not be successful or cost effective.
We spend significant amounts on advertising and other marketing campaigns to acquire new users, and we expect to increase these advertising and marketing efforts, which may not be successful or cost effective.
Risks Related to Operations in Israel ● Conditions in Israel affect our operations and may limit our ability to produce or sell our products and our ability to raise additional funds; ● We may be subject to the limitations resulting from our receipt of Israeli government grants for certain of our research and development activities, the terms of which may require us to pay royalties and to satisfy specified conditions; ● Provisions of Israeli law and our amended and restated articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, us, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders.
Risks Related to Operations in Israel ● Conditions in Israel, including implications of political, economic and military instability arising from the Israel-Hamas war , affect our operations and may limit our ability to produce or sell our products and our ability to raise additional funds; ● We may be subject to the limitations resulting from our receipt of Israeli government grants for certain of our research and development activities, the terms of which may require us to pay royalties and to satisfy specified conditions; ● Provisions of Israeli law and our amended and restated articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, us, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders.
We have recently begun to spend significant amounts on advertising and other marketing campaigns, such as online advertising and social media, to acquire new users and we expect our marketing expenses to increase in the future as we continue to spend significant amounts to acquire new users and increase awareness of our products and services.
We spend significant amounts on advertising and other marketing campaigns, such as online advertising and social media, to acquire new users and we expect our marketing expenses to increase in the future as we continue to spend significant amounts to acquire new users and increase awareness of our products and services. We expect to increase advertising and marketing efforts.
On November 25, 2022, we received a written notification from the Listing Qualifications Department of the Nasdaq Stock Market LLC 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.
On October 24, 2023, we received a written notification from the Listing Qualifications Department of the Nasdaq Stock Market LLC 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 may not be able to raise capital on terms acceptable to us or at all, and the sale of additional shares, equity or debt securities could result in additional dilution to our shareholders; ● If we have a going concern opinion in the future, as we did in 2021, this could materially limit our ability to raise additional funds, which could prevent us from obtaining new financing on reasonable terms or at all; ● Our operating results could be materially harmed if we are unable to accurately forecast consumer demand for our products and services and adequately manage our inventory.
We may not be able to raise capital on terms acceptable to us or at all, and the sale of additional shares, equity or debt securities could result in additional dilution to our shareholders; ● We have a going concern opinion which could prevent us from obtaining new financing on reasonable terms or at all; ● Our operating results could be materially harmed if we are unable to accurately forecast consumer demand for our products and services and adequately manage our inventory.
Risks Related to Our Financial Condition and Operations 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, and the sale of additional shares or equity or debt securities could result in additional dilution to our shareholders.
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, and the sale of additional shares or equity or debt securities could result in additional dilution to our shareholders.
If we are unable to maintain compliance with these Nasdaq requirements, our Ordinary Shares will be delisted from Nasdaq. 20 In the event that our Ordinary Shares or Warrants 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 and Warrants 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 the event that our Ordinary Shares or Warrants 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 and Warrants 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.
Our management might need to devote substantial time to new compliance initiatives as well as compliance with ongoing U.S. requirements; ● There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq, which could result in a de-listing of our Ordinary Shares or Warrants. 2 Risks Related to Our Business There is no assurance that wrist SNC will be the dominant input method in the wearable computing and consumer electronics industry.
Our management is required to devote substantial time to compliance with ongoing SEC and Nasdaq requirements; ● There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq, which could result in a de-listing of our Ordinary Shares or Warrants. 2 Risks Related to Our Business There is no assurance that wrist SNC will be the dominant input method in the wearable computing and consumer electronics industry.
Any failure or perceived failure by us, our products or our platform to comply with new or existing U.S., EU or other foreign privacy, cybersecurity or data protection laws, regulations, policies, industry standards or legal obligations, any failure to bind our suppliers and contractors to appropriate agreements or to manage their practices or any systems failure or security incident that results in the unauthorized access to, or acquisition, release or transfer of, personally identifiable information or other data relating to customers or individuals may result in governmental investigations, inquiries, enforcement actions and prosecutions, private claims and litigation, fines and penalties, adverse publicity or potential loss of business. 15 Our business is subject to the risk of earthquakes, fire, power outages, floods, and other catastrophic events, and to interruption by manmade problems such as terrorism.
Any failure or perceived failure by us, our products or our platform to comply with new or existing U.S., EU or other foreign privacy, cybersecurity or data protection laws, regulations, policies, industry standards or legal obligations, any failure to bind our suppliers and contractors to appropriate agreements or to manage their practices or any systems failure or security incident that results in the unauthorized access to, or acquisition, release or transfer of, personally identifiable information or other data relating to customers or individuals may result in governmental investigations, inquiries, enforcement actions and prosecutions, private claims and litigation, fines and penalties, adverse publicity or potential loss of business.
We must successfully manage introductions of new consumer products or enhanced product features. Introductions of new consumer products could adversely impact the sales of our existing products to consumers. For instance, consumers may decide to purchase new products instead of existing products.
We make efforts to release new consumer products or enhanced product features successfully. The release of new consumer products could adversely impact the sales of our existing products to consumers. For instance, consumers may decide to purchase new products instead of existing products.
As of March 20, 2023, our current officers and directors and holders of more than 5% of our Ordinary Shares beneficially own an aggregate of approximately 55.1% of our Ordinary Shares. Consequently, they are able to exert significant control over matters submitted to our shareholders for approval.
As of March 13, 2024, our current officers and directors and holders of more than 5% of our Ordinary Shares beneficially own an aggregate of approximately 32.2% of our Ordinary Shares. Consequently, they are able to exert significant control over matters submitted to our shareholders for approval.
For more information, see “Item 8.A. - Consolidated Statements and Other Financial Information – Dividends.” Management will have broad discretion as to the use of the proceeds from the potential exercise of the Warrants. Our management will have broad discretion in the allocation of the net proceeds, if any, from the exercise of the Warrants.
For more information, see “Item 8.A. - Consolidated Statements and Other Financial Information – Dividends.” Management will have broad discretion as to the use of the proceeds from the potential exercise of the Warrants and from our recently completed public offering.
Our primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar denominated sales and operating expenses worldwide. Weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of our foreign currency-denominated sales and earnings, and generally leads us to raise international pricing, potentially reducing demand for our products.
Weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of our foreign currency-denominated sales and earnings, and generally leads us to raise international pricing, potentially reducing demand for our products.
This will require us to invest resources in research and development and also require that we: ● design new innovative, intuitive natural and accurate gestures to suit a large variety of wearable computing devices, operating system platforms and form factors, that differentiate our products from those of our competitors; ● integrate successfully the hardware and the software into consumer electronics companies’ products; ● respond effectively to technological changes or product announcements by our competitors; and ● adjust to changing market conditions and consumer preferences quickly and cost-effectively.
This will require us to invest resources in research and development and also require that we: ● design new innovative, intuitive natural and accurate gestures to suit a large variety of wearable computing devices, operating system platforms and form factors, that differentiate our products from those of our competitors; ● integrate successfully the hardware and the software into consumer electronics companies’ products; ● respond effectively to technological changes or product announcements by our competitors; and ● adjust to changing market conditions and consumer preferences quickly and cost-effectively. 3 If there are delays in or we fail to complete our existing and new development programs, we may not be able to meet the requirements, needs and preferences of our customers and consumers and our results of operations and financial condition would be adversely affected.
Additionally, although we endeavor to have our products and platform comply with applicable laws and regulations, these and other obligations may be modified, they may be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements, contractual commitments or our practices.
These regulations may inhibit our ability to expand into those markets or prohibit us from continuing to offer services in those markets without significant additional costs. 14 Additionally, although we endeavor to have our products and platform comply with applicable laws and regulations, these and other obligations may be modified, they may be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements, contractual commitments or our practices.
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.
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.
Further, an inactive market may also impair our ability to raise capital through the sale of additional equity securities and may impair our ability to enter into strategic partnerships or acquire companies, products, or services by using our equity securities as consideration. 19 We have never paid cash dividends on our share capital, and we do not anticipate paying any cash dividends in the foreseeable future.
Further, an inactive market may also impair our ability to raise capital through the sale of additional equity securities and may impair our ability to enter into strategic partnerships or acquire companies, products, or services by using our equity securities as consideration.
Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent state privacy legislation in the United States, which could increase our potential liability and adversely affect our business. 14 Similarly, many other countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and use of personal data obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often more restrictive than those in the United States.
Similarly, many other countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and use of personal data obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often more restrictive than those in the United States.
Risks Related to the Ownership of the Ordinary Shares and Warrants Our current officers and directors and holders of more than 5% of our Ordinary Shares currently beneficially own an aggregate of approximately 55.1% of our Ordinary Shares and they will be able to exert significant control over matters submitted to our shareholders for approval.
If our revenue does not increase to offset these increases in our operating expenses, we may not be profitable in future periods. 18 Risks Related to the Ownership of the Ordinary Shares and Warrants Our current officers and directors and holders of more than 5% of our Ordinary Shares currently beneficially own an aggregate of approximately 32.2% of our Ordinary Shares and they will be able to exert significant control over matters submitted to our shareholders for approval.
In addition to and as evidenced by the COVID-19 global pandemic, our business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins, and similar events.
Our business is subject to the risk of earthquakes, fire, power outages, floods, and other catastrophic events, and to interruption by manmade problems such as terrorism. Our business is vulnerable to damage or interruption from earthquakes, fires, floods, pandemics, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins, and similar events.
In addition, in connection with operating as a public company, we will incur additional significant legal, accounting, and other expenses that we did not incur as a private company. If our revenue does not increase to offset these increases in our operating expenses, we may not be profitable in future periods.
In addition, in connection with operating as a public company, we will incur additional significant legal, accounting, and other expenses that we did not incur as a private company.
There can be no assurance that the market price of our Ordinary Shares will ever equal or exceed the exercise price of the Warrants. In the event that our Ordinary Shares price does not exceed the exercise price of such Warrants during the period when such Warrants are exercisable, the Warrants may not have any value.
There can be no assurance that the market price of our Ordinary Shares will ever equal or exceed the exercise price of the Warrants.
Conversely, a strengthening of the Israeli shekel or foreign currencies relative to the U.S. dollar will increase our Israeli operations costs, and could cause us to increase our international pricing and become less competitive. Additionally, strengthening of foreign currencies may also increase our cost of product components denominated in those currencies, thus adversely affecting gross margins.
Conversely, a strengthening of the Israeli shekel or foreign currencies relative to the U.S. dollar will increase our Israeli operations costs and could cause us to increase our international pricing and become less competitive. We may not be able to sustain our revenue growth rate or profitability in the future.
As of December 31, 2022, we had an accumulated deficit of approximately $13.4 million. If we will receive a going concern opinion in the future , it could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise in the future.
As of December 31, 2023, we incurred accumulated losses of approximately $21.2 million. 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 also include an explanatory paragraph with respect to our ability to continue as a going concern.
In addition, many large, broad-based consumer electronics companies either compete in our market or adjacent markets or have announced plans to do so, including Apple and Facebook. For example, in December 2021, Apple released the Apple Watch AssistiveTouch capability to users for controlling the Apple Watch, with gesture recognition functionalities that do not require any additional sensors.
In addition, many large, broad-based consumer electronics companies either compete in our market or adjacent markets or have announced plans to do so, including Apple and Facebook.
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.
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 and it risks our ability to continue operating as a going concern.
We also continue to see jurisdictions imposing data localization laws, which require personal information, or certain subcategories of personal information to be stored in the jurisdiction of origin. These regulations may inhibit our ability to expand into those markets or prohibit us from continuing to offer services in those markets without significant additional costs.
We also continue to see jurisdictions imposing data localization laws, which require personal information, or certain subcategories of personal information to be stored in the jurisdiction of origin.
We may not be able to sustain our revenue growth rate or profitability in the future. Our recent revenue growth should not be considered indicative of our future performance.
Our recent revenue growth should not be considered indicative of our future performance.
It is also possible that we may face reputational harm if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to alter our products, processes, or sources of supply to avoid such materials.
It is also possible that we may face reputational harm if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to alter our products, processes, or sources of supply to avoid such materials. 15 Risks Related to Our Financial Condition and Operations Our financial statements for the year ended December 31, 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.
This going concern opinion could prevent us from obtaining new financing on reasonable terms or at all and risk our ability to continue operating as a going concern.
General Risk Factors ● We incur significant increased costs as a result of the listing of our securities for trading on Nasdaq.
General Risk Factors ● We incur significant costs as a result of our being a public company.
See “Item 7.B - Related Party Transactions — Share Purchase Agreement with Alpha” for information on how the amount of additional Ordinary Shares or additional shares underlying the warrants for Alpha and other investors from the April 2021 financing will be calculated. 21 The JOBS Act will allow us to postpone the date by which we must comply with some of the laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC, which could undermine investor confidence in our company and adversely affect the market price of our securities.
In the event that our Ordinary Shares price does not exceed the exercise price of such Warrants during the period when such Warrants are exercisable, the Warrants may not have any value. 20 The JOBS Act will allow us to postpone the date by which we must comply with some of the laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC, which could undermine investor confidence in our company and adversely affect the market price of our securities.
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. We have completed our IPO, but we may require additional financing in the future.
Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through existing cash, debt or equity financing. We have completed our IPO and follow on fund raising, but we require additional financing in the near future. We cannot be certain that additional funding will be available to us on acceptable terms, if at all.
Accordingly, it is not possible at this time to estimate the long-term impact that COVID-19 could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted. We operate in a highly competitive market. If we do not compete effectively, our prospects, operating results, and financial condition could be adversely affected.
The development and growth of this relatively new market may also prove to be a short-term trend. We operate in a highly competitive market. If we do not compete effectively, our prospects, operating results, and financial condition could be adversely affected.
If we will receive a going concern opinion in the future, this could limit our ability to raise additional funds and continue operating as a going concern. 18 Our financial performance is subject to risks associated with changes in the value of the U.S. dollar, Israeli shekel, versus local currencies.
Our financial performance is subject to risks associated with changes in the value of the U.S. dollar, Israeli shekel, versus local currencies. Our primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar denominated sales and operating expenses worldwide.
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If there are delays in or we fail to complete our existing and new development programs, we may not be able to meet the requirements, needs and preferences of our customers and consumers and our results of operations and financial condition would be adversely affected.
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For example, in October 2023, Apple released the Apple Watch Ultra2 Double Tap capability, which allows users to tap the index finger and thumb together twice to answer a call, reply to a message, see and scroll through the Smart Stack and more based on the watch’s Inertial Measurement Unit (IMU) and Photoplethysmography (PPG) sensors.
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We expect to increase advertising and marketing efforts.
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Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent state privacy legislation in the United States, which could increase our potential liability and adversely affect our business.
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The development and growth of this relatively new market may also prove to be a short-term trend. The COVID-19 pandemic could harm our business and results of operations. In light of the uncertain situation relating to the spread of COVID-19, as well as government mandates, we implemented a hybrid work model, which combines office and remote work.
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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.
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We continue to monitor the situation and may adjust our current policies as more information and public health guidance becomes available.
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Our management will have broad discretion in the allocation of the net proceeds, if any, from the exercise of the Warrants and from our recently completed public offering, which closed on November 13, 2023.
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We may temporarily suspend travel and doing business in person or other measures that may negatively affect our customer success efforts, sales and marketing efforts, challenge our ability to enter into customer contracts in a timely manner, slow down our recruiting efforts, or create operational or other challenges, any of which could harm our business and results of operations.
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If we are unable to maintain compliance with these Nasdaq requirements, our Ordinary Shares will be delisted from Nasdaq.
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In addition, COVID-19 has disrupted and may continue to disrupt the operations of our customers for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns, all of which could negatively impact our business and results of operations.
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More generally, the COVID-19 pandemic has adversely affected economies and financial markets globally, leading to an economic downturn, which could decrease technology spending and adversely affect demand for our products and harm our business and results of operations.
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The increase in remote working may increase exposure vulnerabilities, resulting in privacy, data protection, data security and fraud risks, and our understanding of applicable legal and regulatory requirements, as well as the latest guidance from regulatory authorities in connection with the COVID-19 pandemic, may be subject to legal or regulatory challenge, particularly as regulatory guidance evolves in response to future developments.
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To date, the main impact from COVID-19 on us has been on our B2B engagements. Due to the economic uncertainty, consumer electronics companies and consumer electronics brands halted new product releases. Additionally, it was more challenging for us to identify new B2B customers as many in-person conventions, tradeshows and conferences were cancelled.
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Therefore, COVID-19 prevented us from advancing with existing customers and acquiring new B2B customers. 12 COVID-19 has also impacted our manufacturing and production. Due to COVID-19, procurement of components has resulted in longer lead times and components shortages, with higher prices than before COVID-19. Manufacturing cycles are now longer.
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Additionally, our inability to be physically present in the manufacturing sites has resulted in longer communication and iteration cycles. We also witnessed an increase in shipment costs and longer shipment times.
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While the duration and extent of the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the extent and effectiveness of containment and mitigation actions, including restrictions on economic activity and the continued rollout of an efficient worldwide vaccination campaign, it has already had an adverse effect on the global economy, and the ultimate societal and economic impact of the COVID-19 pandemic remains unknown.
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While we have developed and expect to continue to develop plans to help mitigate the potential negative impact of COVID-19, these efforts may not be effective, and any protracted economic downturn will likely limit the effectiveness of our efforts.
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Our financial statements for the year ended December 31, 2021, contained an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.
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Alpha and other investors in the April 2021 financing may be entitled to additional Ordinary Shares and additional shares underlying the warrants they hold, pursuant to April 2021 SPAs, to the extent we engage in future dilutive issuances.
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Pursuant to the April 2021 SPA we entered into with Alpha Capital Anstalt, or Alpha, and certain other investors, beginning on April 22, 2021 and until the earlier of (i) the 90th calendar day after the expiration of the investors’ applicable lock-ups or (ii) three years from April 22, 2021, if we or our subsidiary shall issue any Ordinary Shares or equivalents of Ordinary Shares, in an equity transaction other than an exempt issuance, entitling any person or entity to acquire Ordinary Shares at an effective price per share less than the per share purchase price of $2.25 (subject to prior adjustment for reverse and forward stock splits and the like), or an SPA Dilutive Issuance, then, for no additional consideration, we shall immediately issue to Alpha and other investors in the April 2021 financing that number of additional Ordinary Shares equal to (a) the per share purchase price of $2.25 divided by amount actually paid in new cash consideration by third parties for each Ordinary Share in the SPA Dilutive Issuance less (b) the number of Ordinary Shares issued to Alpha and other investors at the closing of the April 2021 financing pursuant to the April 2021 SPAs.
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While we do not expect an SPA Dilutive Issuance to occur prior to three years from April 22, 2021, if an SPA Dilutive Issuance will take place prior to the 90th calendar day after the expiration of the applicable lock-ups, we cannot predict the amount that will be paid in new cash consideration by third parties for each ordinary share issued in the SPA Dilutive Issuance, and are therefore cannot determine the extent of dilution to shareholders as a result of the additional securities to be issued.
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This could cause further dilution to your share ownership. For example, we have issued an aggregate of 169,125 Ordinary Shares to Alpha and the other investors in the April 2021 financing as a result of our IPO.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

91 edited+30 added−22 removed116 unchanged
Biggest changeTechnologies which are used in all devices for input, interaction, control and operation, include: ● Handheld devices such as computer mice, presentation clickers, gaming controllers, and styluses. ● Touch based devices such as the touchpad or touchscreen. ● Keyboard technology devices or digital displays which contain alphanumeric symbols to input text and for navigation. ● Voice assistant devices and services which interpret human speech to digital commands and speech-to-text input. ● Gesture detection sensors such as gesture detection cameras, LiDar, Radar and additional optional technologies that sense the finger and hand movements. ● Wearable input devices such as smart gloves, wearable keyboards, wearable computer mice, smart rings, and smart wearable clickers. ● Neural interface devices that are based on capturing bio-potential signals and transforming signal patterns to input commands, in invasive implant and in non-invasive wearable methods.
Biggest changeTechnologies which are used in all devices for input, interaction, control and operation, include: ● Handheld devices such as computer mice, presentation clickers, gaming controllers, and styluses. ● Touch based devices such as the touchpad or touchscreen. ● Keyboard technology devices or digital displays which contain alphanumeric symbols to input text and for navigation. ● Voice assistant devices and services which interpret human speech to digital commands and speech-to-text input. ● Gesture detection sensors such as gesture detection cameras, LiDar, Radar and additional optional technologies that sense the finger and hand movements. ● Wearable input devices such as smart gloves, wearable keyboards, wearable computer mice, smart rings, and smart wearable clickers. ● Neural interface devices that are based on capturing bio-potential signals and transforming signal patterns to input commands, in invasive implant and in non-invasive wearable methods. 38 According to an article “Worldwide Wearables Market Is Forecast to Rebound in 2023 ,” by International Data Corporation, or IDC, published in June 2023 by IDC, in 2023, a total of 504.1 million units of wearable devices will be shipped to consumers, of which approximately 157.3 million are smartwatches and approximately 32.1 million smart wristbands.
The business model and pricing are dependent on the integration level required, the development period, the exclusivity rights, the scope of the reference engineering design, and the expected volume of units that the customer is expected to sell. In the seventh and final phase, the commercial contract with the customer in signed.
The business model and pricing are dependent on the integration level required, the development period, the exclusivity rights, the scope of the reference engineering design, and the expected volume of units that the customer is expected to sell. In the seventh and final phase, the commercial contract with the customer is signed.
The motivations of the customers are: ● inadvertent error prevention for an equipment operator to avoid mistakes and defects by monitoring, correcting, drawing attention, or preventing human errors as they occur; and ● process engineering and business activities to continuously improve all functions and involve all employees from senior management to the assembly line workers 47 Manufacturing and assembly lines contain multiple manual tasks that employees perform repeatedly without being monitored with regard to accuracy or the employees’ physical conditions.
The motivations of the customers are: ● inadvertent error prevention for an equipment operator to avoid mistakes and defects by monitoring, correcting, drawing attention, or preventing human errors as they occur; and ● process engineering and business activities to continuously improve all functions and involve all employees from senior management to the assembly line workers Manufacturing and assembly lines contain multiple manual tasks that employees perform repeatedly without being monitored with regard to accuracy or the employees’ physical conditions.
By integrating our Mudra technology into a smartwatch, our business customers can: ● Offer a touchless input operation method feature for the smartwatch; ● Diversify their product line offering by introducing new hardware products, software applications, and user service; ● Integrate touchless interaction into existing applications; ● Enable developers to introduce exciting new applications in entertainment, gaming, fitness, digital health, using a gesture-based watch OS; and ● Increase eco-system products connectivity by controlling multiple connected devices from the watch, using gestures.
By integrating our Mudra technology into a smartwatch, our business customers can: ● Offer a touchless input operation method feature for the smartwatch; ● Diversify their product line offering by introducing new hardware products, software applications, and user service; ● Integrate touchless interaction into existing applications; 47 ● Enable developers to introduce exciting new applications in entertainment, gaming, fitness, digital health, using a gesture-based watch OS; and ● Increase eco-system products connectivity by controlling multiple connected devices from the watch, using gestures.
New entrants that move from the forearm or the wrist back to the inner wrist area will need to develop all these layers, reduce the number of sensors to fit the wrist area size, re-design device form factor and electronics, collect and train algorithms using new biopotential signals patterns, re-design their data communication protocol, and define the gestures and user interaction, as if they are developing a new device altogether. 51 ○ Broad mobile, API, and algorithms compatibility.
New entrants that move from the forearm or the wrist back to the inner wrist area will need to develop all these layers, reduce the number of sensors to fit the wrist area size, re-design device form factor and electronics, collect and train algorithms using new biopotential signals patterns, re-design their data communication protocol, and define the gestures and user interaction, as if they are developing a new device altogether. ○ Broad mobile, API, and algorithms compatibility.
We aim towards a “blue ocean” strategy, where we do not compete with established market solutions, but rather we create a whole new arena where multiple input methods can co-exist together to provide the best user experience for the consumer. ○ We seek to work with multiple consumer electronics companies and consumer electronics brands.
We aim towards a “blue ocean” strategy, where we do not compete with established market solutions, but rather we create a whole new arena where multiple input methods can co-exist together to provide the best user experience for the consumer. 50 ○ We seek to work with multiple consumer electronics companies and consumer electronics brands.
This will allow us to gain unparalleled insights on trends, behaviors, and usage. - Flexible gestures and user-interaction choices. Our platform supports the development and implementation of a large variety of new gestures. We can tailor gestures for each use-case per user requests or our own internal insights.
This will allow us to gain unparalleled insights on trends, behaviors, and usage. 37 - Flexible gestures and user-interaction choices. Our platform supports the development and implementation of a large variety of new gestures. We can tailor gestures for each use-case per user requests or our own internal insights.
We believe that we can leverage the growing public acceptance and awareness of wearable neural technologies and the rising adoption of wearable device 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.
We believe that we can leverage the growing public acceptance and awareness of wearable neural technologies and the rising adoption of wearable device to market multiple Mudra-based consumer products. 51 ● Introduce new features, use-cases, software applications, and services. We plan to continue introducing new features and services to increase user engagement and revenue.
At this time, we are not a party to any pending litigation for infringement of intellectual property rights. 53 Research and Development We are passionate about developing innovative products and services that allow interaction and control of computers to become natural and intuitive as real-life experiences.
At this time, we are not a party to any pending litigation for infringement of intellectual property rights. Research and Development We are passionate about developing innovative products and services that allow interaction and control of computers to become natural and intuitive as real-life experiences.
The miniaturized flex-rigid electronics design and manufacturing offer a flexible shell with dynamic semi flex-rigid printed circuit board, to meet strict bill of materials and design for assembly requirements, and consumer laws. Figure 2: The Three Pillars of the Mudra Technology Figure 2 above displays the three pillars of our technology.
The miniaturized flex-rigid electronics design and manufacturing offer a flexible shell with dynamic semi flex-rigid printed circuit board, to meet strict bill of materials and design for assembly requirements, and consumer laws. 40 Figure 2: The Three Pillars of the Mudra Technology Figure 2 above displays the three pillars of our technology.
All necessary integration design information to start serial manufacturing and integration into the consumer electronics customer device are delivered. Consumer Electronics Brands We define consumer electronics brands as a B2B market, where these customers have all the necessary resources to develop, manufacture and market a single product or product line of a consumer electronic device.
All necessary integration design information to start serial manufacturing and integration into the consumer electronics customer device are delivered. 45 Consumer Electronics Brands We define consumer electronics brands as a B2B market, where these customers have all the necessary resources to develop, manufacture and market a single product or product line of a consumer electronic device.
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 SaaS model. 52 ● Integrate our Mudra technology into existing devices .
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 SaaS model. ● Integrate our Mudra technology into existing devices .
These use-cases involve utilizing the Mudra SNC sensor as a platform to be used in additional verticals, such as frontline workers, patients, and athletes and sport enthusiasts. 37 ● A Push-Pull strategy to win both B2B and B2C sales .
These use-cases involve utilizing the Mudra SNC sensor as a platform to be used in additional verticals, such as frontline workers, patients, and athletes and sport enthusiasts. ● A Push-Pull strategy to win both B2B and B2C sales .
The components used in our products are sourced either directly by us or on behalf of us by our contract manufacturers from a variety of component suppliers selected by us and located worldwide. Our operations employees coordinate our relationships with our contract manufacturers and component suppliers.
The components used in our products are sourced either directly by us or on behalf of us by our contract manufacturers from a variety of component suppliers selected by us and located worldwide. 53 Our operations employees coordinate our relationships with our contract manufacturers and component suppliers.
In addition, we are not required to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies registered under the Exchange Act. B.
In addition, we are not required to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies registered under the Exchange Act. 34 B.
We drive consumers to our website through online and offline advertising as well as marketing promotions. We plan to offer additional channels as we increase our production capability. 54 Retail channel.
We drive consumers to our website through online and offline advertising as well as marketing promotions. We plan to offer additional channels as we increase our production capability. Retail channel.
The Mudra Band for Apple Watch is aimed at four major consumer markets: (i) users who are Apple enthusiasts and like buying Apple related products; (ii) users who are technology early adopters and like purchasing innovative consumer gadgets; (iii) users who are active sport and fitness users, and (iv) crowd-funding backers who ordered the device in our Indiegogo crowdfunding campaign.
The Mudra Band for Apple Watch is aimed at four major consumer markets: (i) users who are Apple afficionados and like buying Apple related products; (ii) users who are technology early adopters and like purchasing innovative consumer gadgets; (iii) users who are active sport and fitness users, and (iv) crowd-funding backers who ordered the device in our Indiegogo crowdfunding campaign.
We then use transfer learning, a machine learning method for storing knowledge gained while solving one problem and applying it to a different but related problem, to implement new insights and wisdom into our next generation algorithms, devices, and user experiences. 43 Our Products We are offering both B2B and B2C products. B2B products.
We then use transfer learning, a machine learning method for storing knowledge gained while solving one problem and applying it to a different but related problem, to implement new insights and wisdom into our next generation algorithms, devices, and user experiences. 42 Our Products We are offering both B2B and B2C products. B2B products.
Our technology includes both a non-invasive neural input interface for the wrist that allows building innovative user experiences and applications for digital devices and a smart watch band that lets the user control the Apple ecosystem using subtle finger movements.
Our technology includes both a non-invasive neural input interface for the wrist that allows building innovative user experiences and applications for digital devices and a smart watch band that lets the user control the Apple ecosystem using gestures, subtle hand and finger movements.
As ambient computing is becoming more and more prevalent, and with multiple connected devices, a smooth hand-off and transition from controlling one device to another is crucial for a seamless immersive user experience.
As spatial computing is becoming more and more prevalent, and with multiple connected devices, a smooth hand-off and transition from controlling one device to another is crucial for a seamless immersive user experience.
Using our Mudra technology allows the user to be fully immersed into an entertaining digital experience that feels like a real-life interaction. In February 2023, we released new Mudra Air-Touch functionality that allows users to toggle and switch between connected devices.
Using our Mudra technology allows the user to be fully immersed into an entertaining digital experience that feels like a real-life interaction. Recent Developments (2023-2024) In February 2023, we released new Mudra Air-Touch functionality that allows users to toggle and switch between connected devices.
We provide access to our platform via the Mudra Inspire development kit, which contains the Mudra Inspire wristband, to allow the customer to evaluate the device form factor and user experience, and through the API, which grants access to development of new applications based on the Mudra gesture set with no commercial rights.
We provide access to our platform via the Mudra Development Kit (formerly named Mudra Inspire), which contains the Mudra wristband, to allow the customer to evaluate the device form factor and user experience, and through the API, which grants access to development of new applications and user experiences, based on the Mudra gesture set, with no commercial rights.
Our sensors are placed in proximity to the ulnar, median and radial nerves close to the inner wrist skin surface area. These signals are directly correlated with the hand and finger movements and with fingertip pressure between fingers or on external objects. ● Acceleration and Rotation .
Our SNC sensors are placed in proximity to the ulnar, median and radial nerves close to the inner wrist skin surface area. These signals are directly correlated with the hand and finger movements and with fingertip pressure between fingers or on external objects. ● Acceleration and Movement .
The customer pays per site where the solution is implemented and on the number of users, on monthly or annual automatic renewable subscription. Information Technology, Software Solutions Providers We define information technology, or software solutions providers, as a B2B market, where the customers offer third-party clients with project management needs, from conception to installation.
The customer will pay per site where the solution is implemented and on the number of users, on monthly or annual automatic renewable subscription. 46 Information Technology, Software Solutions Providers We define information technology, or software solutions providers, as a B2B market, where the customers offer third-party clients with project management needs, from conception to installation.
This was used as the first point of engagement with B2B clients to validate our technology. It was launched in June 2018 and over 200 kits have been sold since. This product is now sold only to B2B customers as part of a pilot transaction.
This was used as the first point of engagement with B2B clients to validate our technology. It was launched in June 2018 under the name Mudra Inspire, and over 200 kits have been sold since. This product is now sold only to B2B customers as part of a pilot transaction.
This complete sensor system with the required gesture functionalities is then integrated into the customer device. We also give the customer the option to develop its own OS software and algorithm software. ● Mudra Inspire .
This complete sensor system with the required gesture functionalities is then integrated into the customer device. We also give the customer the option to develop its own OS software and algorithm software. ● Mudra Development Kit .
It can also monitor the movement frequency and infer stress of the employee to alert when performance is degrading during a work day, or over time. Based on customer feedback and pilot transactions, the business model for this customer segment is SaaS. We supply the wrist devices, specific software, and the cloud and integration solution.
It can also monitor the movement frequency and infer stress of the employee to alert when performance is degrading during a work day, or over time. Based on customer feedback and pilot transactions, the business model for this customer segment may be SaaS. In such model, we will supply the wrist devices, specific software, and the cloud and integration solution.
We offer two ways for our business customers to access our technology: (i) paid pilot projects which include the purchase of a Mudra Inspire or research software to evaluate the experience and to validate the technology, and (ii) an SNC sensor module to integrate into a customer device (including AR/VR headsets, smartphones, smartwatches, televisions, and laptops) under a license agreement.
We offer two ways for our business customers to access our technology: (i) paid pilot projects which include the purchase of a Mudra Development Kit to evaluate the experience and to validate the technology, and (ii) an SNC sensor module to integrate into a customer device (including AR/VR headsets, smartphones, smartwatches, televisions, and laptops) under a license agreement.
Our monthly rent payment for this facility is NIS 57,794 (approximately $16,800) during the first lease year and will be increased to NIS 72,722 (approximately $21,100) during the second lease year During the option lease periods, the lease payment may be increased up to 10% as compared to the second lease year.
Our monthly rent payment for this facility is NIS 57,794 (approximately $16,000) during the first lease year and will be increased to NIS 72,722 (approximately $20,000) during the second lease year During the option lease periods, the lease payment may be increased up to 10% as compared to the second lease year.
In addition to consumer electronics, we have recently expanded our brand to include neurotech and brain-computer interface sensors, with additional verticals that include Industry 4.0 – a new phase in the Industrial Revolution that focuses on interconnectivity, automation, machine learning, and real-time data, digital health, sport analytics, and more.
In addition to consumer electronics, we have recently expanded our brand to include neurotech and brain-computer interface sensors, with additional verticals that include Industry 4.0 – a new phase in the Industrial Revolution that focuses on interconnectivity, automation, machine learning, and real-time data, digital health, sport analytics, and more. 35 The core of our platform is Mudra, which means “gesture” in Sanskrit.
Furthermore, we developed functionality that allows users to toggle and switch between connected devices and provides a seamless transition of control across devices such as an iPhone, iPad, Mac computer, and Apple TV devices, as well as other connected devices including smart glasses, using handsfree and touchless subtle finger and wrist movements. 42 Our Mudra platform supports discrete gestures, continuous gestures, and air-touch gestures: ● Discrete gestures.
Furthermore, we developed functionality that allows users to toggle and switch between connected devices and provides a seamless transition of control across devices such as an iPhone, iPad, Mac computer, and Apple TV devices, as well as other connected devices including smart glasses, using handsfree and touchless subtle finger and wrist movements.
If a separate team from a company bought the Mudra Inspire, we consider such team as a new customer. If the same team bought the Mudra Inspire, we do not consider it as a new customer.
If a separate team from a company bought the Mudra Inspire, we consider such team as a new customer.
While cycling, the rider wears gloves and has the fingers clenched on the bike steering wheel. 45 Figure 4: Number of Our B2B Customers and Use-Cases In Figure 4 above, the chart on the left illustrates the number of total business customers buying the Mudra Inspire, which was 27 in the second half of 2018 (all of which were new customers), 82 in 2019 (55 of which were new customers), 103 in 2020 (21 of which were new customers), 121 in 2021 (18 of which were new customers), and 126 in 2022 (5 of which are new customers).
Figure 4: Number of Our B2B Customers and Use-Cases In Figure 4 above, the chart on the left illustrates the number of total business customers buying the Mudra Inspire, which was 27 in the second half of 2018 (all of which were new customers), 82 in 2019 (55 of which were new customers), 103 in 2020 (21 of which were new customers), 121 in 2021 (18 of which were new customers), and 126 in 2022 (5 of which are new customers).
The chart on the right above illustrates the number of total business customer use-cases for integrating or implementing our Mudra technology into their devices, products or services: 21 in the second half of 2018 (all of which were new use-cases), 59 in 2019 (38 of which were new use-cases), 74 in 2020 (15 of which were new use-cases), 89 in 2021 (15 of which were new use-cases), and 92 in 2022 (3 of which were new use-cases).
If the same team bought the Mudra Inspire, we do not consider it as a new customer. 44 The chart on the right above illustrates the number of total business customer use-cases for integrating or implementing our Mudra technology into their devices, products or services: 21 in the second half of 2018 (all of which were new use-cases), 59 in 2019 (38 of which were new use-cases), 74 in 2020 (15 of which were new use-cases), 89 in 2021 (15 of which were new use-cases), and 92 in 2022 (3 of which were new use-cases).
As of March 20, 2023, we have not signed a license agreement with any of these companies.
As of March 13, 2024, we have not signed a license agreement with any of these companies.
Using the domain expertise and the insights we have gathered and continue to gather as users provide feedback, we define the standard for interaction with wearables and digital devices.
We develop the hardware and the software from the bottom up and define the user-experience. Using the domain expertise and the insights we have gathered and continue to gather as users provide feedback, we define the standard for interaction with wearables and digital devices.
Organizational Structure We have one wholly-owned subsidiary – Mudra Wearable Inc., or Mudra Wearable, which was incorporated in Delaware. Mudra Wearable has one employee that acts as executive Vice President of U.S. operations. Mudra Wearable is responsible for the marketing and distribution of our products in the United States. D.
Organizational Structure We have one wholly-owned subsidiary, Mudra Wearable, which was incorporated in Delaware. Mudra Wearable has two full-time employees. One employee acts as general manager and chief marketing officer and the other is an Executive Vice President of U.S. operations. Mudra Wearable is responsible for the marketing and distribution of our products in the United States. D.
By making communication with computers much easier, we intend to empower users to interact with computers and work, enjoy entertainment, and live better. Our stylish, elegant devices have a small size and shape, and support natural, intuitive, and subtle finger movements and gestures. - Human-centered design that optimizes user experience. Our products are designed around our customers’ user experience.
By making communication with computers much easier, we intend to empower users to interact with computers and work, enjoy entertainment, and live better. Our stylish, elegant devices have a small size and shape, and support natural, intuitive, and subtle finger movements and gestures.
Face computers are considered devices that have a potential to replace smartphones by the end of the decade. This product category includes AR glasses and VR head-mounted devices. Smart computing devices include smartphones, tablets, desktop computers, and laptop computers.
Face computers are considered devices that have a potential to replace smartphones by the end of the decade. This product category includes AR glasses, such as the Apple Vision Pro, and VR head-mounted devices, such as the Meta Quest3. Smart computing consumer devices include smartphones, tablets, desktop computers, and gaming consoles.
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 services and software development companies, industrial companies, and utility providers.
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 services and software development companies, industrial companies, and utility providers.
The user’s real-world environment is clear and not blocked by the hands. VR headsets use digital displays which cover eyes to immerse the user in a fully computer-generated alternative environment, displaying computer-generated video capture which entirely occludes the user’s natural surroundings. VR headset input solutions include handheld controllers, a gesture camera, a keyboard, a mouse, input gloves, and voice commands.
The user’s real-world environment is clear and not blocked by the hands. 48 VR headsets use digital displays which cover eyes to immerse the user in a fully computer-generated alternative environment, displaying computer-generated video capture which entirely occludes the user’s natural surroundings.
This phase may also include defining new gestures, collecting new gesture data from users, developing algorithms, and writing the program. 46 In the fifth phase, upon successful completion of the customer’s pilot transaction, a full technical specification of the solution and the integration method are discussed, including: definition of the wrist device form factor, material, and design; definition of the software, and compute unit requirements; the full set of gestures and interactions; and finally, the complete product specification and integration methods.
In the fifth phase, upon successful completion of the customer’s pilot transaction, a full technical specification of the solution and the integration method are discussed, including: definition of the wrist device form factor, material, and design; definition of the software, and compute unit requirements; the full set of gestures and interactions; and finally, the complete product specification and integration methods.
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.
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, we have one China patent application, and one U.S. patent application. As of March 20, 2023, we do not conduct any material business in China. In addition to patent laws, we rely upon a combination of designs, copyrights, trade secrets, domain names and trademark rights, and contractual restrictions such as confidentiality agreements, licenses, and intellectual property assignment agreements.
In addition to patent laws, we rely upon a combination of designs, copyrights, trade secrets, domain names and trademark rights, and contractual restrictions such as confidentiality agreements, licenses, and intellectual property assignment agreements.
The product is planned to launch in the fourth quarter of 2024. 44 What our platform devices track Our products track the following signals which our algorithms decipher to classify the user intent hand and finger gestures: ● SNC .
We are now defining the product specification as we receive feedback from AR and VR experts. The product is planned to launch in the fourth quarter of 2024. What our platform devices track Our products track the following signals which our algorithms decipher to classify the user intent hand and finger gestures: ● Fingertip Pressure .
We believe that our new Mudra Air-Touch switch and toggle feature is an important step forward in the functionality of our products and further fulfills our mission of setting the input standard for the Metaverse. 50 Competition The basic input pillars of HCI are through text, navigation, and digital element interaction.
We believe that our new Mudra Air-Touch switch and toggle feature is an important step forward in the functionality of our products and further fulfills our mission of setting the input standard for the Metaverse. In June 2023, we released Mudra Air-Touch functionality for Android devices.
Our technology layers are interdependent and are optimized to the wrist area thus creating a significant protection moat - there is a very high interdependency between each layer to adjacent layers, and developing similar solutions requires expertise in each individual layer. 41 The first pillar is hardware , which includes electrodes, band design, including form factor and materials, the SNC sensor and the miniaturized flex-rigid electronics.
Our technology layers are interdependent and are optimized to the wrist area thus creating a significant protection moat - there is a very high interdependency between each layer to adjacent layers, and developing similar solutions requires expertise in each individual layer.
Our Customers Our customers include businesses and private consumers, as we operate in both the B2B and B2C sectors. We define “customer” as an individual or entity that has purchased our products.
Currently, our platform can sync with mobile devices operating with iOS8 and above, Android 8.0 and above, and Windows 10 and above. Our Customers Our customers include businesses and private consumers, as we operate in both the B2B and B2C sectors. We define “customer” as an individual or entity that has purchased our products.
In addition, the participation of the IIA in our research and development expenses was nil in 2022 as compared IIA participation of $288 thousand during 2021. We believe that the receipt of these IIA grants in the years 2015 to 2023 is a positive signal that our technology is innovative and feasible.
This increase in research and development expenses, net was partially offset by an increase in IIA participation of approximately $432 thousand. We believe that the receipt of these IIA grants in the years 2015 to 2023 is a positive signal that our technology is innovative and feasible.
This also enables us to mine meta-data to build hand and finger movements and gestures database, which we believe has huge monetization opportunities.
Establishing a direct connection with customers and users enables us to learn, improve and enhance our product offerings. This also enables us to mine meta-data to build hand and finger movements and gestures database, which we believe has huge monetization opportunities.
The SNC sensors were developed specifically for the inner wrist area; therefore, they are able to sense low energy biopotentials and to maintain optimal bandwidth and minimize external interference sources.
Band design includes the modeling of the curvature of the band to snuggly fit the wrist area, and feel pleasant and comfortable to be worn on daily basis. The SNC sensors were developed specifically for the inner wrist area; therefore, they are able to sense low energy biopotentials and to maintain optimal bandwidth and minimize external interference sources.
Neural wrist area competitors include Pison Technology Inc. and CoolSo Inc., and Wispr.ai, whereas Electroencephalogram-based companies include Neuralink Corporation and NextMind (acquired by Snap in March 2022). We believe that our competitive advantages include: ○ Push-Pull strategy all along the value chain and creating a blue ocean business environment.
There are also multiple participants which utilize emerging wearable, sensor, and bio-potential signals to offer neural and wearable interfaces such as Coolso and Wispr.ai, whereas Electroencephalogram-based companies include Neuralink Corporation and NextMind (acquired by Snap in March 2022). We believe that our competitive advantages include: ○ Push-Pull strategy all along the value chain and creating a blue ocean business environment.
Moving a single finger or softly tapping the finger or thumb. ● Continuous gestures. Applying various gradations of fingertip pressure to manipulate digital objects. ● Air-touch gestures. Combining the above with hand and forearm movements, such as “slide-to-unlock”.
Our Mudra platform supports discrete gestures, continuous gestures, and air-touch gestures: ● Discrete gestures. Moving a single finger or softly tapping the finger or thumb. ● Continuous gestures. Applying various gradations of fingertip pressure to manipulate digital objects. ● Air-touch gestures.
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. 36 Figure 1: Our Mudra Platform Figure 1 above displays the appearance and major features of our current products—the Mudra Band for Apple Watch in black and white band color, and the Mudra Inspire (seen above from right to left).
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.
The outcome is, generally, a software or a mobile application which includes customer specific requests for which gestures perform certain functions on a specific device and operating system.
The outcome is, generally, a software or a mobile application which includes customer specific requests for which gestures perform certain functions on a specific device and operating system. This phase may also include defining new gestures, collecting new gesture data from users, developing algorithms, and writing the program.
Figure 3: The Mudra Platform Gestures Types Figure 3 above displays the three types of Mudra gestures – discrete gestures, continuous gestures, and air-touch gestures.
Combining the above with hand and forearm movements, such as “slide-to-unlock”. 41 Figure 3: The Mudra Platform Gestures Types Figure 3 above displays the three types of Mudra gestures – discrete gestures, continuous gestures, and air-touch gestures.
The Mudra Band for Apple Watch is our first consumer product, launched in June 2020. The band connects to the Apple Watch and allows a user touchless operation and control Apple ecosystem products.
The Mudra Band for Apple Watch is our first consumer product, launched in June 2020. The band connects to the Apple Watch and allows a user touchless operation and control Apple ecosystem products. So far we have delivered over one thousand units of the Mudra Bands for Apple Watches since the first batch was delivered to customers in September 2023.
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. The product is in its final stages of manufacturing.
Mudra Development Kit, originally named 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 2024, the Mudra Band for Apple Watch, our flagship B2C product was included in the “Best of CES 2024” products list by SlashGear.
Taking the aforementioned figures into consideration, the TAM that we are targeting is 11.05 billion devices shipped between 2023 to 2026. The smart-computing and smart-home device categories present several challenges that need to be addressed before we will be able to take advantage of this opportunity.
The smart-computing and smart-home device categories present several challenges that need to be addressed before we will be able to take advantage of this opportunity.
Punch-cards were replaced by the QWERTY keyboard to input text and for two-dimensional navigation starting in the 1960s. The computer mouse, which allowed users to navigate and interact with digital elements on a Graphical User-Interface, was introduced in the 1980s. Touchpads became popular as a mouse replacement for laptop computers in the 1990s.
The computer mouse, which allowed users to navigate and interact with digital elements on a Graphical User-Interface, was introduced in the 1980s. Touchpads became popular as a mouse replacement for laptop computers in the 1990s. Gesture recognition cameras to detect body, hand and finger movement were introduced in the early 2000s.
We use an inertia measurement unit to measure the wrist acceleration in three-axes and to measure the wrist rotation on four quaternions. These measurements are used to estimate the direction the hand is moving and the palm orientation in relationship to the forearm and body.
We use an inertia measurement unit to measure the wrist acceleration in three-axes and to measure the wrist rotation on four quaternions.
Our Mudra technology allows the mobile phone end-user to benefit from turning the phone into a stationary hub for work, video streaming, and gaming.
Our Mudra technology allows the mobile phone end-user to benefit from turning the phone into a stationary hub for work, video streaming, and gaming. The user can access a world of new experiences by integrating touchless interactions with connected eco-system devices to achieve more of the phone.
We cannot be certain that we will be successful in protecting our proprietary rights. While we believe our patents, patent applications, hardware, software and other proprietary know-how have value, changing technology makes our future success dependent principally upon our ability to successfully achieve continuing innovation.
While we believe our patents, patent applications, hardware, software and other proprietary know-how have value, changing technology makes our future success dependent principally upon our ability to successfully achieve continuing innovation. 52 Litigation may be necessary in the future to enforce our proprietary rights, to determine the validity and scope of the proprietary rights of others, or to defend us against claims of infringement or invalidity by others.
One of our major challenges is to determine whether consumers will be reluctant to adopt our products and services as an alternative to established, traditional devices, such as remote controls, touchscreens, keyboards and mice. As a result, we plan to focus on delivering the greatest value to users by first focusing on the wearables and face computer device categories.
One of our major challenges is to determine whether consumers will be reluctant to adopt our products and services as an alternative to established, traditional devices, such as remote controls, touchscreens, camera gesture control solutions, keyboards and mice.
We expect additional consumer offerings will include applications for a variety of devices which will add value to the consumer beyond hardware functions. 48 The value of Mudra Input Technology to Our Customers Smartwatch operation methods include touchscreen, buttons, digital crown, bezel, and wrist gestures.
The value of Mudra Input Technology to Our Customers Smartwatch operation methods include touchscreen, buttons, digital crown, bezel, and wrist gestures.
We believe that our technology is setting the standard input interface for the Metaverse. ● Wearable computing is reshaping business processes and consumer entertainment patterns: The use of wearable technology makes it easier for frontline and assembly line workers to operate more efficiently and provide better service. It boosts labor efficiency, reduces quality defects and revisions, and improves safety.
We believe that the input method for wearable computing will have to be re-invented as well, with interactions beyond the touchscreen. ● Spatial computing is reshaping business processes and consumer entertainment patterns: The use of wearable technology makes it easier for frontline and assembly line workers to operate more efficiently and provide better service.
Defining the right gesture and binding it with the correct function is important for high adoption of our input solution for wearable computing, and for our platform solution to become ubiquitous in multiple digital devices. 38 Industry Overview and Market Opportunity Total Addressable Market Every digital device - whether worn on the body, placed on a desk, held in the hands, or hung on a wall - requires an interface.
Defining the right gesture and binding it with the correct function is important for high adoption of our input solution for wearable computing, and for our platform solution to become ubiquitous in multiple digital devices.
Compatibility and Wireless Syncing In order to reach the widest set of corporate customers and customer users, we focus on ensuring that our devices are compatible with a broad range of mobile devices and OSs. Currently, our platform can sync with mobile devices operating with iOS8 and above, Android 8.0 and above, and Windows 10 and above.
These measurements are used to estimate the direction the hand is moving and the palm orientation in relationship to the forearm and body. 43 Compatibility and Wireless Syncing In order to reach the widest set of corporate customers and customer users, we focus on ensuring that our devices are compatible with a broad range of mobile devices and OSs.
We plan to develop and offer additional consumer electronics products for controlling and interacting with computers and digital devices.
We plan to develop and offer additional consumer electronics products for controlling and interacting with computers and digital devices. We expect additional consumer offerings will include applications for a variety of devices which will add value to the consumer beyond hardware functions.
AR glasses input solutions include gesture recognition cameras, temple area touchpads, wired remote, handheld clicker, handheld remote, and voice commands.
AR glasses use semi-transparent display lenses to overlay digital data and digital holograms into the user’s real-world view. AR glasses input solutions include gesture recognition cameras, temple area touchpads, wired remote, handheld clicker, handheld remote, and voice commands.
We research and develop electrode materials and geometry to achieve a durable electrode that sustains its physical properties on wrist skin contact and endures thousands of wear/off cycles. Band design includes the modeling of the curvature of the band to snuggly fit the wrist area, and feel pleasant and comfortable to be worn on daily basis.
The first pillar is hardware , which includes electrodes, band design, including form factor and materials, the SNC sensor and the miniaturized flex-rigid electronics. We research and develop electrode materials and geometry to achieve a durable electrode that sustains its physical properties on wrist skin contact and endures thousands of wear/off cycles.
A smart band for the Apple Watch which allows users to control Apple ecosystem devices such as iPhone, Mac computer, AppleTV, and Pad using subtle touchless finger movements. The product was launched in June 2020 via an Indiegogo crowd funding campaign, and has been offered for booking directly to consumers since September 2020.
A neural input wristband which allows users to control Apple ecosystem devices such as iPhone, Mac computer, Apple TV, and iPad using subtle touchless finger movements and gestures. The product was launched in June 2020 and was delivered to consumers for the first time in September 2023.
The core of our platform is Mudra, which means “gesture” in Sanskrit language. Mudra– our 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.
Mudra– our 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.
We are conducting extensive user-tests and observations to custom-tailor each gesture with the right control function. ● Learning through cloud-based calibrations and mobile apps. We are building a large hand and fingers gesture database. The information is stored anonymized on cloud-based servers, which allows us to gain meaningful insights on user trends, behaviors, and usage of our products.
We are conducting extensive user-tests and observations to custom-tailor each gesture with the right control function. We use familiar gestures such as tap and pinch and glide, which can be performed in relaxed and comfortable body postures. ● Learning through cloud-based calibrations and mobile apps. We are building a large hand and fingers gesture database.
Our gestures are discrete or continuous hand and finger movements, deciphered from neural signals at the wrist. Our interface can control multiple digital devices using a single interface. In addition to consumer electronics, we have recently expanded our brand to include neurotech and brain/computer interface monitoring, with additional verticals including Industry 4.0, digital health, sport analytics, and more.
In addition to consumer electronics, we have recently expanded our brand to include neurotech and brain/computer interface monitoring, with additional verticals including Industry 4.0, digital health, sport analytics, and more. 36 Our Strengths We believe that our strengths include: ● Direct relationships with the world’s leading multinational technology consumer electronics companies .
Voice assistants are now commonly used with smart home devices. The pace of technology advancements has always been dictated by user interfaces. With the future of computers tilting increasingly toward wearable devices, especially as smartwatches and smart glasses enter the market, HCI methods for wearable computing will need to be reinvented as well.
With the future of computers tilting increasingly toward wearable devices, especially as smartwatches and smart glasses enter the market, HCI methods for wearable computing will need to be reinvented as well. We believe that the industry’s foreseeable future is based on wearable computers for different body parts, instead of computers that are restricted to lying on a desk.
We believe that the industry’s foreseeable future is based on wearable computers for different body parts, instead of computers that are restricted to lying on a desk. The industry of digital computers peripherals and input devices has evolved dramatically in the past 70 years. It started in the 1950s with punch-cards as the major input method.
The industry of digital computers peripherals and input devices has evolved dramatically in the past 70 years. It started in the 1950s with punch-cards as the major input method. Punch-cards were replaced by the QWERTY keyboard to input text and for two-dimensional navigation starting in the 1960s.
Wearable technology is gaining importance among consumers owing to its diverse applications in the industrial sector, healthcare, and consumer electronics, among others. ● Neurotech market and brain-computer interfaces are gaining traction: The neurotech industry is based on connecting human brains to computers, so that brain-computer interfaces open up a new area of economic enterprise.
Recent advancements in sensors and signal processing combined with artificial intelligence algorithms have enabled the emergence of wrist-based wearable neural input technology, thus opening a wide range of applications in HCI and bio-potential signals monitoring. ● Neurotech market and brain-computer interfaces are gaining traction: The neurotech industry is based on connecting human brains to computers, so that brain-computer interfaces open up a new area of economic enterprise.
The Total Addressable Market, or TAM, of digital devices that we are targeting can be categorized into three segments—wearable computers, face computers and home digital devices. We view Mudra as an all-encompassing input, operation, and control interface for all digital devices, connecting the physical world with digital devices using subtle finger movements and gestures.
We view Mudra as an all-encompassing input, operation, and control interface for all digital devices, connecting the physical world with digital devices using subtle finger movements and gestures. The basic pillars of Human-Computer Interface, or HCI, input are text, navigation, and digital element interaction. The most common interface solutions include the keyboards and mice for PCs.
IDC forecasts the market for wearable devices will reach 628.3 million units shipped to consumers in 2026, of which 194.2 million will be smartwatches.
IDC forecasts the market for wearable devices will reach 629.4 million units shipped to consumers in 2027, of which 206.2 million will be smartwatches. This industry is expected to show a healthy 6.8% five-year compound annual growth rate.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

45 edited+20 added−18 removed40 unchanged
Biggest changeFinance income (expense), net Finance expenses, net was approximately $38 thousand for the year ended December 31, 2022, compared to finance income, net of approximately $55 thousand for the year ended December 31, 2021. Finance expenses, net was primarily due to interest on senior secured credit facility, bank charges and net currency exchange rates differences, offset by interest on deposits.
Biggest changeFinance expenses, net in 2022 was primarily due to interest on senior secured credit facility, bank charges and net currency exchange rates differences, offset by interest on deposits. 57 Net loss and the total comprehensive loss As a result of the foregoing, our total comprehensive and net loss for the year ended December 31, 2023 was approximately $7.8 million, compared to approximately $6.5 million for the same period ended December 31, 2022, an increase of approximately $1.3 million, or 20%.
Net cash provided by financing activities Cash provided by financing activities during the year ended December 31, 2022 totaled to approximately $14.9 million, mainly as a result of consideration of our IPO in which we issued 3,750,000 Ordinary Shares and warrants to purchase 8,625,000 Ordinary Shares, the conversion of SAFEs into 118,204 Ordinary shares and the exercise of 40,000 warrants into shares.
Cash provided by financing activities during the year ended December 31, 2022 totaled approximately $14.9 million, mainly as a result of consideration of our IPO in which we issued 3,750,000 Ordinary Shares and warrants to purchase 8,625,000 Ordinary Shares, the conversion of SAFEs into 118,204 Ordinary shares and the exercise of 40,000 warrants into shares.
Under the applicable laws, we are required to pay royalties at the rate of 3%-3.5% of sales of products developed with the funds provided by the IIA, up to an amount equal to 100% of the IIA research and development grants received, linked to the dollar including accrued interest at the LIBOR rate.
Under the applicable laws, we are required to pay royalties at the rate of 3%-3.5% of sales of products developed with the funds provided by the IIA, up to an amount equal to 100% of the IIA research and development grants received, linked to the dollar including accrued interest.
These grants are recognized at the time the Company is entitled to such grants based on the costs incurred or milestones achieved as provided by the relevant agreement and included as a deduction from research and development or sales and marketing expenses, respectively. 65
These grants are recognized at the time the Company is entitled to such grants based on the costs incurred or milestones achieved as provided by the relevant agreement and included as a deduction from research and development or sales and marketing expenses, respectively.
Following the consummation of our IPO, $100 thousand received under the SAFEs were repaid in cash and $400 thousand was converted into 118,204 Ordinary Shares, based on the public offering price of $4.23 per Ordinary Share. 61 On July 4, 2022, we entered into a senior secured credit facility agreement, or the Credit Facility Agreement, with Pure Capital to borrow from time to time amounts from Pure Capital for the purposes of financing our ongoing activities and the payment of certain expenses in connection with our IPO, or the Credit Facility.
Following the consummation of our IPO, $100 thousand received under the SAFEs were repaid in cash and $400 thousand was converted into 118,204 Ordinary Shares, based on the public offering price of $4.23 per Ordinary Share. 59 On July 4, 2022, we entered into a senior secured credit facility agreement, or the Credit Facility Agreement, with Pure Capital to borrow from time to time amounts from Pure Capital for the purposes of financing our ongoing activities and the payment of certain expenses in connection with our IPO, or the Credit Facility.
For more information, see also “Item 10.E – Taxation - Israeli Tax Considerations and Government Programs - Tax Benefits and Grants for Research and Development.” 63 In January 2023, the IIA approved a program to finance further development of our manufacturing process of our wearable neural interface in Israel, for a period of 12 months starting February 1, 2023.
For more information, see also “Item 10.E – Taxation - Israeli Tax Considerations and Government Programs - Tax Benefits and Grants for Research and Development.” 61 In January 2023, the IIA approved a program to finance further development of our manufacturing process of our wearable neural interface in Israel, for a period of 12 months starting February 1, 2023.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 55 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS A. Operating Results The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this annual report on Form 20-F.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS A. Operating Results The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this annual report on Form 20-F.
As a condition for obtaining approval to manufacture outside of Israel (or following a declaration that up to 10% of the production is transferred abroad), we would be required to pay increased royalties, which usually amount to 1% in addition to the standard royalties rate 3%-3.5%, and also the total amount of our liability to IIA may be increased to between 120% and 300% of the grants we received from IIA, depending on the manufacturing volume that is performed outside of Israel (less royalties already paid to IIA).
As a condition for obtaining approval to manufacture outside of Israel (or following a declaration that up to 10% of the production is transferred abroad), we would be required to pay increased royalties, which usually amount to 1% in addition to the standard royalties rate 3%-3.5%, and also the total amount of our liability to IIA may be increased to between 100% and 150% of the grants we received from IIA, depending on the manufacturing volume that is performed outside of Israel (less royalties already paid to IIA).
The payment terms of the Mudra Inspire development kits are upon delivery of the hardware, while the payment terms of the pilot transactions are within the pilot period. Operating Expenses Our current operating expenses consist of four components—cost of materials, research and development expenses, sales and marketing expenses and general and administrative expenses.
The payment terms of the Mudra Inspire development kits are upon delivery of the hardware, while the payment terms of the pilot transactions are within the pilot period. 55 Operating Expenses Our current operating expenses consist of four components—cost of revenues, research and development expenses, sales and marketing expenses and general and administrative expenses.
Financial Income and Expense Financial income consists of interest on deposits while financial expenses consist of interest on senior secured credit facility, bank charges and net currency exchange rates differences . 57 Comparison of the Years Ended December 31, 2022 and 2021 Results of Operations The following table summarizes our results of operations for the periods presented.
Financial Income and Expense Financial income mainly consists of interest on deposits while financial expenses consist of interest on senior secured credit facility, bank charges and net currency exchange rates differences . Comparison of the Years Ended December 31, 2023 and 2022 Results of Operations The following table summarizes our results of operations for the periods presented.
Labor costs are the most significant component of operating expenses and consist of salaries (including benefits) and share-based compensation. Cost of materials Cost of materials consists primarily of cost of component parts of our products sold. Research and Development Expenses, net Research and development expenses consist primarily of labor cost , subcontractors and materials.
Labor costs are the most significant component of operating expenses and consist of salaries (including benefits) and share-based compensation. Cost of revenues Cost of revenues consists primarily of cost of component parts of our products sold and outbound freight charges. Research and Development Expenses, net Research and development expenses consist primarily of labor cost , subcontractors and materials.
Our primary uses of cash from operating activities are for labor costs, professional services, and IPO costs. Cash used in operating activities mainly consists of our net loss adjusted for certain non-cash items, including share-based compensation , depreciation expenses and changes in operating assets and liabilities during each period.
Our primary uses of cash from operating activities are for labor costs, research and development expenses for materials and subcontractors and professional services. Cash used in operating activities mainly consists of our net loss adjusted for certain non-cash items, including share-based compensation , depreciation expenses and changes in operating assets and liabilities during each period.
Off-Balance Sheet Arrangements We have headquarters which are located at 5 Ha-Tnufa St., Yokne’am Illit, Israel. This facility comprises approximately 732 square meters, or 7,880 square feet, of space.
Off-Balance Sheet Arrangements Our headquarters are located at 5 Ha-Tnufa St., Yokne’am Illit, Israel. This facility comprises approximately 732 square meters, or 7,880 square feet of space.
Our monthly rent payment for this facility is NIS 57,794 (approximately $16,800) during the first lease year and will be increased to NIS 72,722 (approximately $21,100) during the second lease year During the option lease periods, the lease payment may be increased up to 10% as compared to the second lease year.
Our monthly rent payment for this facility is NIS 57,794 (approximately $16,000) during the first lease year and will be increased to NIS 72,722 (approximately $20,000) during the second lease year During the option lease periods, the lease payment may be increased up to 10% as compared to the second lease year.
Results of Operations— Comparison of the years ended December 31, 2022 and December 31, 2021— Research and Development Expenses, net.” D. Trend information As of the date of this annual report, we employ 28 full-time employees (including one employee located in the United States), and ten part-time employees.
Results of Operations— Comparison of the years ended December 31, 2023 and December 31, 2022— Research and Development Expenses, net.” D. Trend information As of the date of this annual report, we employ 29 full-time employees (including one employee located in Lithuania and two employees located in the United States), and ten part-time employees.
Upon the consummation of our IPO, on September 19, 2022, we repaid the outstanding credit, in a total amount of $800,000 to Pure Capital from the proceeds of the IPO.
Upon the consummation of our IPO, we repaid the outstanding credit, in a total amount of $800,000 to Pure Capital from the proceeds of the IPO.
We intend to continue and increase the number of employees and expenses during 2023, mainly to support our business development activities, the continuous research and development activity of our Mudra technology, and to manufacture the Mudra Band, which includes the purchase of components, manufacturing of components, and assembly of the product.
We intend to maintain this number of employees and expenses during 2024, mainly to support our business development activities, the continuous research and development activity of our Mudra technology, and to manufacture the Mudra Band, which includes the purchase of components, manufacturing of components, and assembly of the product.
Liquidity and Capital Resources Overview We are still in our development stage and at an early stage of generating revenues. Therefore, we have suffered recurring losses from operations and negative cash flows from operations since inception.
B. Liquidity and Capital Resources Overview We are still in a transition phase from development stage to an early stage of generating revenues. Therefore, we have suffered recurring losses from operations and negative cash flows from operations since inception.
In June 2022, we received from one of our shareholders, Alpha, the contractually required written consent, or the June 2022 Consent, to proceed with an initial public offering of our Ordinary Shares in the United States in exchange for a cash payment of $300,000 from the proceeds of that offering and certain price protection terms, which amount was paid on September 28, 2022, following the completion of the IPO.
In June 2022, we received from one of our shareholders, Alpha Capital Anstalt, or Alpha,, the contractually required written consent, or the June 2022 Consent, to proceed with an initial public offering of our Ordinary Shares in the United States in exchange for a cash payment of $300,000 from the proceeds of that offering and certain price protection terms, which amount was paid on September 28, 2022, following the completion of the IPO. 60 On September 20, 2022, the volume weighted average of our share price was less than the exercise price of $2.00 for the Warrants.
The royalty payments to the IMEI are on an annual basis. As of December 31, 2022, the maximum obligation with respect to the grant received from the IMEI, contingent upon entitled future sales, was $102 thousand.
The royalty payments to the IMEI are on an annual basis. As of December 31, 2023, the maximum obligation with respect to the grant received from the IMEI, contingent upon entitled future sales, was $95 thousand linked to the consumer price index.
During the years ended December 31, 2022 and 2021, net cash used in operating activities was approximately $5.7 million and approximately $2.1 million, respectively.
During the years ended December 31, 2023 and 2022, net cash used in operating activities was approximately $8.4 million and approximately $5.7 million, respectively.
A pilot transaction has multiple performance obligations and it generally takes a few months but less than one year. Each Mudra Inspire development kit sale also has multiple performance obligations. In those transactions, each obligation: hardware and API (for Mudra Inspire development kit) and tailor-made software application and technical support (for a pilot transaction) is distinct and separately identifiable.
Each Mudra Inspire development kit sale also has multiple performance obligations. In those transactions, each obligation: hardware and API (for Mudra Inspire development kit) and tailor-made software application and technical support (for a pilot transaction) is distinct and separately identifiable.
General and administrative expenses General and administrative expenses increased by approximately $1,320 thousand, or 210%, to approximately $1,948 thousand for the year ended December 31, 2022, from approximately $628 thousand for the year ended December 31, 2021.
General and administrative expenses General and administrative expenses increased by approximately $934 thousand, or 48%, to approximately $2,882 thousand for the year ended December 31, 2023, from approximately $1,948 thousand for the year ended December 31, 2022.
For the Year Ended December 31, U.S. dollars 2022 2021 Net cash used in operating activities $ (5,714 ) $ (2,103 ) Net cash used in investing activities (66 ) (36 ) Net cash provided by financing activities 14,879 2,938 Net increase (decrease) in cash and cash equivalents $ 9,099 $ 799 60 Operating Activities We have generated negative cash flows.
For the Year Ended December 31, U.S. dollars 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 increase (decrease) in cash and cash equivalents $ (9,563 ) $ 9,099 58 Operating Activities We have generated negative cash flow.
We follow five steps to record revenue: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy our performance obligations.
We follow five steps to record revenue: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy our performance obligations. 62 In 2023, we started production of our B2C consumer product, the “Mudra Band” and started to generate revenues, all of which were pre-paid.
Our operations have been funded substantially through issuance of convertible securities to certain investors which were converted to equity, issuance of shares and warrants and through Israeli governmental grants. On September 15, 2022, we closed the IPO.
Our operations have been funded substantially through issuance of convertible securities to certain investors which were converted to equity, issuance of shares and warrants, through Israeli governmental grants, and an underwritten public offering in November 2023 and our IPO.
Year Ended December 31, U.S. dollars in thousands 2022 2021 Revenues $ 45 $ 142 Cost of materials $ (10 ) $ (10 ) Research and development expenses, net $ (2,271 ) $ (1,411 ) Sales and marketing expenses, net $ (1,370 ) $ (665 ) General and administrative expenses $ (1,948 ) $ (628 ) Initial public offering expenses $ (904 ) $ (97 ) Operating loss $ (6,458 ) $ (2,669 ) Finance (expense) income, net $ (38 ) $ 55 Comprehensive and net loss $ (6,496 ) $ (2,614 ) Revenues Revenues decreased by approximately $97 thousand, or 68%, to approximately $45 thousand for the year ended December 31, 2022 from approximately $142 thousand for the year ended December 31, 2021.
Year Ended December 31, U.S. dollars in thousands 2023 2022 Revenues $ 82 $ 45 Cost of revenues $ (62 ) $ (10 ) Research and development expenses, net $ (3,316 ) $ (2,271 ) Sales and marketing expenses, net $ (2,008 ) $ (1,370 ) General and administrative expenses $ (2,882 ) $ (1,948 ) Public offering expenses $ - $ (904 ) Operating loss $ (8,186 ) $ (6,458 ) Finance (expense) income, net $ 372 $ (38 ) Net loss and the total comprehensive loss $ (7,814 ) $ (6,496 ) 56 Revenues Revenues increased by approximately $37 thousand, or 82%, to approximately $82 thousand for the year ended December 31, 2023 from approximately $45 thousand for the year ended December 31, 2022.
There is no assurance that such financing will be obtained . We believe that our existing cash, including the proceeds from the IPO , will be sufficient to support working capital and capital expenditure requirements through June 2024.
We believe that our existing cash, including the proceeds from the underwritten public offering in November 2023 , will be sufficient to support working capital and capital expenditure requirements through June 2024.
In addition, the terms of the grants under the Research Law require that the manufacturing of products resulting from IIA-funded programs be carried out in Israel, unless a prior written approval of the IIA is obtained. In December 2022, we received an approval from the IIA to transfer some of our manufacturing activities abroad.
As December 31, 2023, we had a contingent obligation to pay royalties to the IIA in the principal amounted of $2.2 million. In addition, the terms of the grants under the Research Law require that the manufacturing of products resulting from IIA-funded programs be carried out in Israel, unless a prior written approval of the IIA is obtained.
We considered the impact of COVID-19 on our estimates and assumptions and determined that there were no material adverse impacts on our consolidated financial statements as of December 31, 2022 and December 31, 2021. 56 Components of Results of Operations Revenues Revenue is recognized when (or as) control of the promised goods or services is transferred to the customer, and in an amount that reflects the consideration we are contractually due in exchange for those services or goods.
Components of Results of Operations Revenues Revenue is recognized when (or as) control of the promised goods or services is transferred to the customer, and in an amount that reflects the consideration we are contractually due in exchange for those services or goods.
A pilot transaction has multiple performance obligations and it generally takes a few months but less than one year. Each Mudra Inspire development kit sale has multiple performance obligations.
We believe that the delivery date is the most appropriate point in time indicating control has transferred to the customer. A pilot transaction has multiple performance obligations and it generally takes a few months but less than one year. Each Mudra Inspire development kit sale has multiple performance obligations.
The most critical accounting policies, discussed below, pertain to areas where judgment of management, historical factors and estimates require a high degree of involvement when determining the final reported balance in the Company’s consolidated financial statements. 64 Revenue recognition Revenue is recognized when (or as) control of the promised goods or services is transferred to the customer, and in an amount that reflects the consideration we are contractually due in exchange for those services or goods.
The most critical accounting policies, discussed below, pertain to areas where judgment of management, historical factors and estimates require a high degree of involvement when determining the final reported balance in the Company’s consolidated financial statements.
Research and development expenses, net Research and development expenses, net increased by approximately $860 thousand , or 61%, to approximately $2.3 million for the year ended December 31, 2022 from approximately $1.4 million for the year ended December 31, 2021.
Sales and marketing expenses, net Sales and marketing expenses, net increased by approximately $638 thousand , or 47%, to approximately $2,008 thousand for the year ended December 31, 2023 from approximately $1,370 thousand for the year ended December 31, 2022.
Following the completion of the IPO, we are finalizing the manufacturing of our first B2C consumer product, the “Mudra Band” and expect it to be shipped to early-booking orders in the third quarter of 2023. E. Critical Accounting Estimates The preparation of the consolidated financial statements in conformity with U.S.
Following the delivery of our first B2C consumer product, the “Mudra Band”, we are developing the Mudra XR wristband with the aim of it being shipped to customers by the fourth quarter of 2024. E. Critical Accounting Estimates The preparation of the consolidated financial statements in conformity with U.S.
The increase was primarily due to an increase of approximately $684 thousand in labor costs, an increase of approximately $400 thousand in professional services and an increase of approximately $128 thousand in share-based compensation expenses.
The increase was primarily due to an increase of approximately $306 thousand in labor costs, mainly due to the increase in the number of employees, an increase of approximately $420 thousand in insurance and public company expenses and an increase of approximately $314 thousand in professional services.
The primary factors affecting operating cash flows during these periods were net losses of approximately $6.5 million and approximately $2.6 million during the years ended December 31, 2022 and 2021, respectively, partially offset by non-cash adjustments of approximately $766 thousand and approximately $511 thousand, respectively.
These factors were partially offset by non-cash adjustments of approximately $196 thousand and approximately $813 thousand during the years ended December 31, 2023 and 2022, respectively. Net cash used in investing activities Cash used in investing activities for the years ended December 31, 2023 and 2022 was approximately $4.2 million and $66 thousand, respectively.
As of December 31, 2022, our principal source of liquidity was cash, totaling approximately $10.4 million. 59 As of December 31, 2022, the Company had incurred accumulated losses of $13.4 million and expects to continue to fund its operations through issuances of convertible securities, Ordinary Shares and warrants and through Israeli governmental grants.
As of December 31, 2023, the Company had incurred accumulated losses of $21.2 million and expects to continue to fund its operations through issuances of Ordinary Shares and warrants, convertible securities, and through Israeli governmental grants. There is no assurance that such financing will be obtained .
Our discussion and analysis for the year ended December 31, 2020 and December 31, 2021 can be found in our amendment number two to preliminary prospectus dated February 17, 2023, (as part of our Registration Statement on Form F-1, File No. 333-262838). Overview Our company develops a non-invasive neural input interface for controlling digital devices.
Our discussion and analysis for the year ended December 31, 2021 and December 31, 2022 can be found in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 22, 2023. Overview Our company develops a non-invasive neural input interface for controlling digital devices.
Cash provided by financing activities during the year ended December 31, 2021 totaled to approximately $2.9 million, mainly as a result of the issuance of 1,343,374 Ordinary Shares and warrants to purchase 671,687 Ordinary Shares for total consideration of $2.925 million, net of issuance expenses.
Net cash provided by financing activities Cash provided by financing activities during the year ended December 31, 2023 totaled approximately $3.1 million, mainly as a result of approximately $1.7 million from issuance of shares issued in the public offering, net of issuance cost, and of approximately $1.4 million of proceeds from the issuance of ordinary shares as a result of the exercise of warrants.
The increase was primarily due to an increase of approximately $757 thousand in labor costs, mainly due to the increase in the research and development personnel salaries and bonuses, offset by a decrease in subcontractors expenses of $205 thousand in 2022. In addition, during 2022, share-based compensation expenses increased in approximately $74 thousand.
The increase was primarily due to an increase of approximately $285 thousand in labor costs, mainly due to the increase in the number of employees, an increase of approximately $192 thousand in exhibitions, conventions, and travel expenses. an increase of approximately $219 thousand in consultant expenses and an increase of approximately $170 thousand in advertising expenses, offset by a decrease of approximately $339 thousand in share-based compensation.
Our monthly rent payment as of December 31, 2022, was approximately NIS 14,950 (approximately $4,800). We terminated this lease, effective March 31, 2023. We have off-balance sheet arrangements in connection with our research and development agreements with the IIA.
We have off-balance sheet arrangements in connection with our research and development agreements with the IIA.
Initial Public Offering On September 15, 2022, we closed the IPO and received gross proceeds of approximately $16 million before deducting underwriting discounts and commissions and before offering expenses ($14.9 million net proceeds after deducting approximately $1.1 million of underwriting discounts and commissions and approximately $13.3 million after deducting other offering costs).
On September 15, 2022, we closed the IPO with gross proceeds to the Company of approximately $16.0 million, before deducting underwriting discounts and other expenses paid by the Company. The offering consisted of 3,750,000 units each consisting of one ordinary share and two warrants to purchase one ordinary share each priced to the public at $4.25 per unit.
In the year 2021, costs are net from governmental grants from the Israeli Ministry of Economy and Industry, or the IMEI. General and Administrative Expenses General and administrative expenses consist primarily of labor cost , professional service fees and facilities . Initial Public Offering Expenses Initial public offering expenses consist of professional service fees relating to the IPO .
General and Administrative Expenses General and administrative expenses consist primarily of labor cost , professional service fees and facilities . Public Offering Expenses Public offering expenses consist of professional service fees relating to a firm commitment underwritten initial public offering we closed on September 15, 2022 .
In connection with the IPO, we received gross proceeds of approximately $16.0 million before deducting underwriting discounts and commissions and before offering expenses ($14.9 million net proceeds after deducting approximately $1.1 million of underwriting discounts and commissions and approximately $13.3 million after deducting other offering costs).
On November 13, 2023, we closed a public offering with gross proceeds to the Company of $2.0 million, before deducting underwriting discounts and other expenses paid by the Company, and net proceeds of approximately $1.7 million after such discounts and expenses. The offering consisted of 4,444,444 ordinary shares priced to the public at $0.45 per share.
Comprehensive and net loss As a result of the foregoing, our total comprehensive and net loss for the year ended December 31, 2022 was approximately $6.49 million, compared to approximately $2.61 million for the same period ended December 31, 2021, an increase of approximately $3.88 million, or 149%. B.
The primary factors affecting operating cash flows were a net loss of approximately $7.8 million and an increase of inventory of approximately $1.0 million during the year ended December 31, 2023, as compared to net loss of approximately $6.5 million during the years ended December 31, 2022.
Removed
We are finalizing the manufacturing of our first B2C consumer product, the “Mudra Band” and expect it to be shipped to early-booking orders in the third quarter of 2023.
Added
We are continuing to ship out our first B2C consumer product, the Mudra Band, and expect to launch the Mudra XR wristband, which supports hands-free interaction, in the fourth quarter of 2024.
Removed
Selling directly to consumers will allow us to learn, improve and enhance our consumer product offerings, and enable us to mine meta-data to build a large hand and finger movements and gestures database, which presents significant monetization opportunities.
Added
In 2023, we started production of our B2C consumer product, the “Mudra Band”, and started to generate revenues, all of which were pre-paid. The Mudra Band allows touchless operation and control of the watch and iPhone by using an app which is considered combined with the band as one performance obligation.
Removed
In connection with the IPO, we issued and sold 3,750,000 Ordinary Shares and 8,625,000 Warrants (after giving effect to the partial exercise of the underwriter’s over-allotment option). The Ordinary Shares and Warrants were approved for listing on the Nasdaq and commenced trading under the symbol “WLDS” and “WLDSW,” respectively, on September 13, 2022.
Added
Revenue derived from the sale of Mudra Band is recognized at a point of time when control transfers to the customer. We believe that the delivery date is the most appropriate point in time indicating control has transferred to the customer. A pilot transaction has multiple performance obligations and it generally takes a few months but less than one year.
Removed
Impact of COVID-19 The COVID-19 pandemic has created, and may continue to create, significant uncertainty in macroeconomic conditions, and the extent of its impact on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak.
Added
The increase was mainly due to revenues from the sale of our B2C Mudra Bands. Cost of revenues The cost of revenues increased by approximately $52 thousand, or 520%, to approximately $62 thousand for the year ended December 31, 2023 from approximately $10 thousand for the year ended December 31, 2022.
Removed
The decrease was mainly due to the fact that 2021 revenues included $84 thousand of revenues received with respect to a pilot transaction delivered. Cost of materials The cost of materials was approximately $10 thousand for each of the years ended December 31, 2022 and December 31, 2021 .
Added
The increase was mainly due to manufacturing costs associated with the sales of our B2C Mudra Bands. Research and development expenses, net Research and development expenses, net increased by approximately $1.0 million , or 46%, to approximately $3,316 thousand for the year ended December 31, 2023 from approximately $2,271 thousand for the year ended December 31, 2022.
Removed
In addition, no IIA grant received in 2022 and approximately $288 thousand received in 2021. 58 Sales and marketing expenses, net Sales and marketing expenses, net increased by approximately $705 thousand , or 106%, to approximately $1,370 thousand for the year ended December 31, 2022 from approximately $665 thousand for the year ended December 31, 2021.
Added
The increase was primarily due to an increase of approximately $497 thousand in labor costs, mainly due to the increase in the number of employees in the research and development, an increase in materials expenses of approximately $427 thousand, an increase in subcontractors expenses of approximately $263 thousand and an increase in travel expenses of approximately $129 thousand, due to the beginning of Mudra Band’s production abroad, offset by an increase in IIA participation of approximately $432 thousand.
Removed
The increase was primarily due to an increase of approximately $494 thousand in labor costs mainly due to the increase in sales personnel salaries and bonuses, and an increase of approximately $289 thousand in share-based compensation.
Added
This increase was partially offset by a decrease of approximately $113 thousand in share-based compensation expenses. Finance income (expense), net Finance income, net was approximately $372 thousand for the year ended December 31, 2023, compared to finance expense, net of approximately $38 thousand for the year ended December 31, 2022.
Removed
Initial public offering expenses Initial public offering expenses include specifically identifiable incremental expenses directly related to the preparation and filing of the registration statement on Form F-1, such as legal and printing expenses.
Added
Finance income, net in 2023 was primarily due to interest on bank deposits, partially offset by bank charges.
Removed
In connection with the IPO, we issued and sold 3,750,000 Ordinary Shares and 8,625,000 Warrants (after giving effect to the partial exercise of the underwriter’s over-allotment option).
Added
Considering the above, our dependency on external funding for our operations raises a substantial doubt about our ability to continue as a going concern. As of December 31, 2023, our principal source of liquidity was cash and proceeds from our IPO from September 2022 and the public offering from November 2023, totaling approximately $15 million net.
Removed
Since our inception until the IPO, we financed our operations primarily through issuances of shares and issuances of convertible securities for aggregate proceeds of approximately $6.3 million (net of issuance expenses) and through Israeli governmental grants for aggregate gross proceeds of approximately $1.8 million.
Added
The primary factors affecting investing cash flows during 2023 was an increase of $4.1 million in short term deposits.
Removed
During 2022, we entered into SAFEs for aggregate proceeds of $500 thousand, of which $100 thousand was paid back in cash upon the closing of the IPO and the remaining amount was converted to Ordinary Shares upon the closing of the IPO.
Added
In June 2023, we issued an additional 724,139 Ordinary Shares upon the exercise of Warrants at an exercise price of $2.00 per share for aggregate proceeds of $1.4 million.
Removed
During the third quarter of 2022, we received an aggregate of $800 thousand under a senior secured credit facility agreement as further described below, which was fully repaid on September 19, 2022.
Added
Until October 25, 2023, the interest was calculated at a rate based on 12-month LIBOR applicable to US Dollar deposits. However, on October 25, 2023, the IIA published a directive concerning changes in royalties to address the expiration of the LIBOR.
Removed
Net cash used in investing activities Cash used in investing activities for the years ended December 31, 2022 and 2021 was $66 thousand and $36 thousand, respectively, which was mainly used for the purchase of computer and software.
Added
Under such directive, regarding IIA grants approved by the IIA prior to January 1, 2024 but which are outstanding thereafter, as of January 1, 2024 the annual interest is calculated at a rate based on 12-month Secured Overnight Financing Rate, or SOFR, or at an alternative rate published by the Bank of Israel plus 0.71513%; and, for grants approved on or following January 1, 2024 the annual interest shall be the higher of (i) the 12 months SOFR interest rate, plus 1%, or (ii) a fixed annual interest rate of 4%.
Removed
Pursuant to the April 2021 SPA, we entered into with Alpha and certain other investors, beginning on April 22, 2021 and until the earlier of (i) the 90th calendar day after the expiration of the investors’ applicable lock-ups or (ii) three years from April 22, 2021, if we or our subsidiary shall issue any Ordinary Shares or equivalents of Ordinary Shares, in an equity transaction other than an exempt issuance, entitling any person or entity to acquire Ordinary Shares at an effective price per share less than the per share purchase price of $2.25 (subject to prior adjustment for reverse and forward stock splits and the like), then, for no additional consideration, we shall immediately issue to Alpha and other investors in the April 2021 financing that number of additional Ordinary Shares equal to (a) the per share purchase price of $2.25 divided by amount actually paid in new cash consideration by third parties for each Ordinary Share in the SPA Dilutive Issuance less (b) the number of Ordinary Shares issued to Alpha and other investors at the closing of the April 2021 financing pursuant to the April 2021 SPAs. 62 On September 20, 2022, the volume weighted average of our share price was less than the exercise price of $2.00 for the Warrants.
Added
In December 2022, we received an approval from the IIA to transfer some of our manufacturing activities abroad.
Removed
Pursuant to the June 2022 Consent, the investors in the April 2021 financing waived their rights for such adjustments as of the date of the IPO, and deferred such adjustments (if any) to be effected on the 90th calendar day following the closing of the IPO.
Added
In addition, we have one consultant located in Japan. We have two sub-contractors located in India, performing front end software application development.
Removed
Our previous offices were located at Ha-Ta’asiya St 2 Yokne’am Illit, Israel. This facility comprised approximately 200 square meters, or 2,140 square feet, of space. Our current lease, which we entered into on July 1, 2018, expired on September 30, 2022, and is now occupied on a month-to-month basis.
Added
Revenue recognition Revenue is recognized when (or as) control of the promised goods or services is transferred to the customer, and in an amount that reflects the consideration we are contractually due in exchange for those services or goods.
Removed
In September 2021, the Bank of Israel, which determines annual interest rates, published a directive which stated that annual interest at a variable rate linked to the LIBOR rate for loans in U.S. dollars will be replaced by the Secured Overnight Financing Rate, or the SOFR, in June 2023.
Added
The Mudra Band allows touchless operation and control of the watch and iPhone by using an app which is considered combined with the band as one performance obligation. Revenue derived from the sale of Mudra Band is recognized at a point of time when control transfers to the customer.
Removed
We believe that this change would not have a material impact on our results or our financial position. As December 31, 2022, we had a contingent obligation to pay royalties to the IIA in the principal amounted of $1.8 million.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

69 edited+11 added−13 removed122 unchanged
Biggest changeThe compensation policy must furthermore consider the following additional factors: ● the education, skills, expertise and accomplishments of the relevant director or executive; ● the director’s or executive’s roles and responsibilities and prior compensation agreements with him or her; ● the relationship between the cost of the terms of service of an office holder and the average median compensation of the other employees of the company (including those employed through manpower companies), including the impact of disparities in salary upon work relationships in the company; ● the possibility of reducing variable compensation at the discretion of the board of directors; and the possibility of setting a limit on the exercise value of non-cash variable compensation; and ● as to severance compensation, the period of service of the director or executive, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company. 76 The compensation policy must also include the following principles: ● with the exception of office holders who report directly to the chief executive officer, the link between variable compensation and long-term performance and measurable criteria; ● the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation at the time of its grant; ● the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements; ● the minimum holding or vesting period for variable, equity-based compensation; and ● maximum limits for severance compensation.
Biggest changeThe compensation policy must furthermore consider the following additional factors: ● the education, skills, expertise and accomplishments of the relevant director or executive; ● the director’s or executive’s roles and responsibilities and prior compensation agreements with him or her; ● the relationship between the cost of the terms of service of an office holder and the average median compensation of the other employees of the company (including those employed through manpower companies), including the impact of disparities in salary upon work relationships in the company; ● the possibility of reducing variable compensation at the discretion of the board of directors; and the possibility of setting a limit on the exercise value of non-cash variable compensation; and 73 ● as to severance compensation, the period of service of the director or executive, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company.
Alon Mualem, Chief Financial Officer Mr. Alon Mualem has served as our Chief Financial Officer since January 7, 2022. Mr. Mualem previously served as the Chief Financial Officer of Eltek Ltd. (Nasdaq: ELTK), an Israeli public company, from January 2019 to January 2022. Mr. Mualem served as the Chief Financial Officer of SharpLink Gaming Ltd.
Alon Mualem has served as our Chief Financial Officer since January 7, 2022. Mr. Mualem previously served as the Chief Financial Officer of Eltek Ltd. (Nasdaq: ELTK), an Israeli public company, from January 2019 to January 2022. Mr. Mualem served as the Chief Financial Officer of SharpLink Gaming Ltd.
Such benefits may include, to the extent applicable to the executive, payments, contributions and/or allocations for savings funds, education funds (referred to in Hebrew as “Keren Hishtalmut”), pension, severance, risk insurances (e.g., life or work disability insurance) and payments for social security . (2) Computed based on Black-Scholes option pricing model .
Such benefits may include, to the extent applicable to the executive, payments, contributions and/or allocations for savings funds, education funds (referred to in Hebrew as “Keren Hishtalmut”), pension, severance, risk insurances (e.g., life or work disability insurance) and payments for social security . (2) Computed based on the Black-Scholes option pricing model .
Independent Directors Under the Companies Law An “independent director” is either an external director or a director who meets the same non-affiliation criteria as an external director (except for (i) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (ii) the requirement for accounting and financial expertise or professional qualifications), as determined by the audit committee, and who has not served as a director of the company for more than nine consecutive years.
Independent Directors Under the Companies Law An “independent director” under the Companies Law is either an external director or a director who meets the same non-affiliation criteria as an external director (except for (i) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (ii) the requirement for accounting and financial expertise or professional qualifications), as determined by the audit committee, and who has not served as a director of the company for more than nine consecutive years.
For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service.
For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service.
The duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a duty to: ● refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs; ● refrain from any action that is competitive with the company’s business; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and ● disclose to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder. 79 Insurance Under the Companies Law, a company may obtain insurance for any of its office holders against the following liabilities incurred due to acts he or she performed as an office holder, if and to the extent provided for in the company’s articles of association: ● breach of his or her duty of care to the company or to another person, to the extent such a breach arises out of the negligent conduct of the office holder; ● a breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company’s interests; and ● a financial liability imposed upon him or her in favor of another person.
The duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a duty to: ● refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs; ● refrain from any action that is competitive with the company’s business; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and ● disclose to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder. 76 Insurance Under the Companies Law, a company may obtain insurance for any of its office holders against the following liabilities incurred due to acts he or she performed as an office holder, if and to the extent provided for in the company’s articles of association: ● breach of his or her duty of care to the company or to another person, to the extent such a breach arises out of the negligent conduct of the office holder; ● a breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company’s interests; and ● a financial liability imposed upon him or her in favor of another person.
In addition, our compensation policy provides for maximum permitted ratios between the total variable (cash bonuses and equity-based compensation) and non-variable (base salary) compensation components, in accordance with an officer’s respective position with the company. 77 An annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets.
In addition, our compensation policy provides for maximum permitted ratios between the total variable (cash bonuses and equity-based compensation) and non-variable (base salary) compensation components, in accordance with an officer’s respective position with the company. An annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets.
Barel holds an MBA degree from the Bar Ilan University, a Master of Systems Engineering degree from the Technion – Israel Institute of Technology, and a BSc in Mechanical Engineering from the Tel-Aviv University. 67 Offir Remez, Executive Vice President of Business Development Mr. Offir Remez has served as our Executive Vice President of Business Development since November 2021.
Barel holds an MBA degree from the Bar Ilan University, a Master of Systems Engineering degree from the Technion – Israel Institute of Technology, and a BSc in Mechanical Engineering from the Tel-Aviv University. Offir Remez, Executive Vice President of Business Development Mr. Offir Remez has served as our Executive Vice President of Business Development since November 2021.
Unless the appointing director limits the time or scope of the appointment, the appointment is effective for all purposes until the appointing director ceases to be a director or terminates the appointment. 73 Committees of the Board of Directors Our board of directors has three standing committees, the audit committee, the compensation committee and the Financial Statement Examination Committee.
Unless the appointing director limits the time or scope of the appointment, the appointment is effective for all purposes until the appointing director ceases to be a director or terminates the appointment. Committees of the Board of Directors Our board of directors has three standing committees, the audit committee, the compensation committee and the Financial Statement Examination Committee.
The compensation committee is responsible for: (1) recommending the compensation policy to a company’s board of directors for its approval (and subsequent approval by the shareholders); and (2) duties related to the compensation policy and to the compensation of a company’s office holders, including: ● recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); ● recommending to the board of directors periodic updates to the compensation policy; ● assessing implementation of the compensation policy; ● determining whether the terms of compensation of certain office holders of the company need not be brought to approval of the shareholders; and ● determining whether to approve the terms of compensation of office holders that require the committee’s approval.
The compensation committee is responsible for: (1) recommending the compensation policy to a company’s board of directors for its approval (and subsequent approval by the shareholders); and (2) duties related to the compensation policy and to the compensation of a company’s office holders, including: ● recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); ● recommending to the board of directors periodic updates to the compensation policy; ● assessing implementation of the compensation policy; ● administering the Company’s clawback policy; ● determining whether the terms of compensation of certain office holders of the company need not be brought to approval of the shareholders; and ● determining whether to approve the terms of compensation of office holders that require the committee’s approval.
On December 15, 2022, our board of directors appointed Doron Cohen, of Fahn Kanne & Co., the Israeli member firm of Grant Thornton International Ltd., as our internal auditor. Our internal auditor is a partner of a firm which specializes in internal auditing.
On December 15, 2022, our board of directors re-appointed Doron Cohen, of Fahn Kanne & Co., the Israeli member firm of Grant Thornton International Ltd., as our internal auditor. Our internal auditor is a partner of a firm which specializes in internal auditing.
If a majority of the board of directors has a personal interest, then shareholder approval is generally also required. Disclosure of Personal Interests of a Controlling Shareholder Under the Companies Law, the disclosure requirements that apply to an office holder also apply to a controlling shareholder of a public company.
If a majority of the board of directors has a personal interest, then shareholder approval is generally also required. 79 Disclosure of Personal Interests of a Controlling Shareholder Under the Companies Law, the disclosure requirements that apply to an office holder also apply to a controlling shareholder of a public company.
Lurie earned her B.A. degree and an MBA degree with a specialization in Finance and Marketing from Hebrew University of Jerusalem. 68 Family Relationships There are no family relationships between any members of our executive management and our directors.
Lurie earned her B.A. degree and an MBA degree with a specialization in Finance and Marketing from Hebrew University of Jerusalem. Family Relationships There are no family relationships between any members of our executive management and our directors.
Arrangements for Election of Directors and Members of Management There are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were selected. B.
Arrangements for Election of Directors and Members of Management There are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were selected. 66 B.
Compensation The following table presents in the aggregate all compensation we paid to all of our directors and senior management as a group for the year ended December 31, 2022. The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period.
Compensation The following table presents in the aggregate all compensation we paid to all of our directors and senior management as a group for the year ended December 31, 2023. The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period.
However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company’s stated compensation policy, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide detailed reasons for their decision, after rediscussing the terms of the compensation and the shareholders’ non-approval. 83 Chief executive officer.
However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company’s stated compensation policy, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide detailed reasons for their decision, after rediscussing the terms of the compensation and the shareholders’ non-approval. 80 Chief executive officer.
Amounts paid in NIS are translated into U.S. dollars at the rate of NIS 3.36 = U.S. $1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar as reported by the Bank of Israel during such period of time.
Amounts paid in NIS are translated into U.S. dollars at the rate of NIS 3.69 = U.S. $1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar as reported by the Bank of Israel during such period of time.
Our independent registered public accounting firm and our internal auditor are invited to attend all meetings of our financial statements examination committee. 75 Compensation Committee Under the Companies Law, the board of directors of any public company must establish a compensation committee.
Our independent registered public accounting firm and our internal auditor are invited to attend all meetings of our financial statements examination committee. 72 Compensation Committee Under the Companies Law, the board of directors of any public company must establish a compensation committee.
In accordance with the Companies Law, we are required to disclose the compensation granted to our five most highly compensated officers. The table below reflects the compensation granted during or with respect to the year ended December 31, 2022.
In accordance with the Companies Law, we are required to disclose the compensation granted to our five most highly compensated officers. The table below reflects the compensation granted during or with respect to the year ended December 31, 2023.
All amounts reported in the tables below reflect the cost to the Company, in thousands of U.S. Dollars, for the year ended December 31, 2022.
All amounts reported in the tables below reflect the cost to the Company, in thousands of U.S. Dollars, for the year ended December 31, 2023.
Operations N/A Yaacov Goldman (1)(2)(3) 67 Independent Director Class II (5) Ilana Lurie (1)(2)(3) 48 Independent Director Class I (4) (1) Member of the Compensation Committee (2) Member of the Audit Committee and Financial Statement Examination Committee (3) Independent Director (as defined under Nasdaq Stock Market rules) (4) Class I directors shall hold office until the annual general meeting to be held in 2023 and until their successors shall have been elected and qualified.
Operations N/A Yaacov Goldman (1)(2)(3) 68 Independent Director Class II (5) Ilana Lurie (1)(2)(3) 49 Independent Director Class I (4) (1) Member of the Compensation Committee (2) Member of the Audit Committee and Financial Statement Examination Committee (3) Independent Director (as defined under Nasdaq Stock Market rules) (4) Class I directors shall hold office until the annual general meeting to be held in 2026 and until their successors shall have been elected and qualified.
Dahan serves both as our Chief Executive Officer and as the Chairman of our board of directors, in accordance with the provisions of the Companies Law and the Companies Regulations (Validity Period of a Decision According to Section 121 of the Companies Law), 5776-2016, which allows such dual office for a period of five years following the completion of the IPO.
Dahan serves both as our Chief Executive Officer and as the Chairman of our board of directors, in accordance with the provisions of the Companies Law and the Companies Regulations (Validity Period of a Decision According to Section 121 of the Companies Law), 5776-2016, which allows such dual office for a period of five years following the completion of the IPO. 64 Alon Mualem, Chief Financial Officer Mr.
Our amended and restated articles of association provide that the number of board of directors’ members (including external directors, if applicable) shall be set by our board of directors provided that it will consist of not less than three and not more than twelve.
Board Practices Our board of directors presently consists of five members. Our amended and restated articles of association provide that the number of board of directors’ members (including external directors, if applicable) shall be set by our board of directors provided that it will consist of not less than three and not more than twelve.
(5) Class II directors shall hold office until the annual general meeting to be held in 2024 and until their successors shall have been elected and qualified.
(5) Class II directors shall hold office until the annual general meeting to be held in 2024 and until their successors shall have been elected and qualified. (6) Class III directors shall hold office until the annual general meeting to be held in 2025 and until their successors shall have been elected and qualified.
Yaacov Goldman serving as chairman. 78 Internal Auditor Under the Companies Law, the board of directors of an Israeli public company must appoint an internal auditor nominated by the audit committee. The role of the internal auditor is to examine, among other things, whether a company’s actions comply with the law and proper business procedure.
Internal Auditor Under the Companies Law, the board of directors of an Israeli public company must appoint an internal auditor nominated by the audit committee. The role of the internal auditor is to examine, among other things, whether a company’s actions comply with the law and proper business procedure.
Share Option Plan In September 2015, our board of directors adopted the 2015 Plan, pursuant to the provisions of the Israeli Income Tax Ordinance, or the Tax Ordinance. Following several amendments, our board of directors currently has the discretion to grant options, or Options, to purchase Ordinary Shares of our company from a pool of up to 2,257,458 Ordinary Shares.
Share Option Plan In September 2015, our board of directors adopted the 2015 Plan, pursuant to the provisions of the Israeli Income Tax Ordinance, or the Tax Ordinance. Following several amendments, our board of directors currently has the discretion to grant options, or Options, to purchase Ordinary Shares of our company from a pool of up to 3,188,597 Ordinary Shares.
As of March 20, 2023, the Company meets such conditions and therefore formed a Joint Committee. The members of our Joint Committee consist of Mr. Eli Bachar, Mr. Yaacov Goldman and Ms. Ilana Lurie, with Mr.
As of March 13, 2024, the Company meets such conditions and therefore formed a Joint Committee. The members of our Joint Committee consist of Mr. Eli Bachar, Mr. Yaacov Goldman and Ms. Ilana Lurie, with Mr. Yaacov Goldman serving as chairman.
As of March 21, 2023, 372,771, Ordinary Shares had been issued upon the exercise of Options, 1,247,689 Options had been allocated and/or granted but had not been exercised, and 636,998 Ordinary Shares remained available for future grants. 84 Pursuant to the 2015 Plan, the Options may be granted to employees, consultants and service providers, directors and non-employees of our company and/or our affiliates, or the Optionees; provided however, that the Optionees who are Israeli employees or directors (who are not controlling shareholders of our company) may only receive Options pursuant to Section 102 of the Tax Ordinance, or Section 102, and non-employees (and/or employees who are also controlling shareholders), may receive Options pursuant to Section 3(i) of the Tax Ordinance.
As of March 13, 2024, 372,771 Ordinary Shares had been issued upon the exercise of Options, 1,749,189 Options had been allocated and/or granted but had not been exercised, and 1,066,637 Ordinary Shares remained available for future grants. 81 Pursuant to the 2015 Plan, the Options may be granted to employees, consultants and service providers, directors and non-employees of our company and/or our affiliates, or the Optionees; provided however, that the Optionees who are Israeli employees or directors (who are not controlling shareholders of our company) may only receive Options pursuant to Section 102 of the Tax Ordinance, or Section 102, and non-employees (and/or employees who are also controlling shareholders), may receive Options pursuant to Section 3(i) of the Tax Ordinance.
Directors and Senior Management The following table sets forth information regarding our executive officers, key employees and directors as of March 20, 2023: Name Age Position Class Asher Dahan 44 Chief Executive Officer, Chairman of the Board of Directors Class III (6) Alon Mualem 55 Chief Financial Officer N/A Tamar Fleisher 42 Chief Operating Officer N/A Guy Wagner 45 Chief Scientific Officer, President and Director Class III (6) Leeor Langer 41 Chief Technology Officer N/A Shmuel Barel 47 Chief Marketing Officer N/A Offir Remez 52 Executive Vice President of Business Development N/A Eli Bachar (1)(2)(3) 39 Director Class II (5) Barry Kaplan 49 Executive Vice President of the U.S.
Directors and Senior Management The following table sets forth information regarding our executive officers, key employees and directors as of March 13, 2024: Name Age Position Class Asher Dahan 46 Chief Executive Officer, Chairman of the Board of Directors Class III (6) Alon Mualem 56 Chief Financial Officer N/A Tamar Fleisher 43 Chief Operating Officer N/A Guy Wagner 46 Chief Scientific Officer, President and Director Class III (6) Leeor Langer 42 Chief Technology Officer N/A Shmuel Barel 48 Chief Marketing Officer N/A Offir Remez 53 Executive Vice President of Business Development N/A Eli Bachar (1)(2)(3) 41 Director Class II (5) Barry Kaplan 53 Executive Vice President of the U.S.
Dahan worked as Electrical Validation Manager at Intel Haifa, Israel. He worked for Intel Haifa, Israel from 2006 to 2012 as Technical Leader and Engineer for High Speed Interfaces. Mr. Dahan has a BSc. in Electrical Engineering from Ort Braude College. Mr.
Guy Wagner and Mr. Leeor Langer in March 2014. From 2013 to 2015, Mr. Dahan worked as Electrical Validation Manager at Intel Haifa, Israel. He worked for Intel Haifa, Israel from 2006 to 2012 as Technical Leader and Engineer for High Speed Interfaces. Mr. Dahan has a BSc. in Electrical Engineering from Ort Braude College. Mr.
Board Practices—Approval of Related Party Transactions under Israeli law”); ● determining the approval process for transactions that are “non-negligible” (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; ● examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; ● examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; ● establishing procedures for the handling of employees’ complaints as to deficiencies in the management of our business and the protection to be provided to such employees; and ● where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto. 74 Our audit committee may not conduct any discussions or approve any actions requiring its approval (see “Management—Approval of Related Party Transactions under Israeli law”), unless at the time of the approval a majority of the committee’s members are present, which majority consists of independent directors under the Companies Law, including at least one external director, if applicable.
Board Practices—Approval of Related Party Transactions under Israeli law”); ● determining the approval process for transactions that are “non-negligible” (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; 71 ● examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; ● examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; ● establishing procedures for the handling of employees’ complaints as to deficiencies in the management of our business and the protection to be provided to such employees; and ● where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto.
The options have expiration dates ranging from April 26, 2028 to July 1, 2031, and an exercise price of $2.25 per share; (iii) options granted to Offir Remez to purchase 137,000 Ordinary Shares under the 2015 Plan.
The options have expiration dates ranging from April 2028 to August 2033, and an exercise price ranging from $1.32 to $2.25 per share; (iii) options granted to Offir Remez to purchase 157,000 Ordinary Shares under the 2015 Plan.
Asher Dahan has served as our director since March 2014 and as our Chief Executive Officer and as acting Chief Financial Officer since March 2016 and as the chairman of our board of directors since March 6, 2022. Mr. Dahan founded our company together with Mr. Guy Wagner and Mr. Leeor Langer in March 2014. From 2013 to 2015, Mr.
Asher Dahan, Chief Executive Officer, Chairman of the Board of Directors Mr. Asher Dahan has served as our director since March 2014 and as our Chief Executive Officer and as acting Chief Financial Officer since March 2016 and as the chairman of our board of directors since March 6, 2022. Mr. Dahan founded our company together with Mr.
We have one (1) sub-contractor located in India, performing front end software application development. None of our employees are members of a union or subject to the terms of a collective bargaining agreement.
In addition, we have one consultant located in Japan. We have two sub-contractors located in India, performing front end software application development. The majority of our employees are located in Israel. None of our employees are members of a union or subject to the terms of a collective bargaining agreement.
Barel served as Computer Aided Design Engineer at the Israeli Aircraft Industries, a major aerospace and aviation manufacturer in Israel, from February 2006 to January 2010. Mr.
(Nasdaq: AMAT), an international semiconductor equipment and software supplier. Previously, Mr. Barel served as Computer Aided Design Engineer at the Israeli Aircraft Industries, a major aerospace and aviation manufacturer in Israel, from February 2006 to January 2010. Mr.
In determining the number of directors required to have such expertise, our board of directors must consider, among other things, the type and size of the company and the scope and complexity of its operations.
Under the Companies Law, our board of directors must determine the minimum number of directors who are required to have accounting and financial expertise. In determining the number of directors required to have such expertise, our board of directors must consider, among other things, the type and size of the company and the scope and complexity of its operations.
Additionally, the nominee must provide details of such skills, and demonstrate an absence of any limitation under the Companies Law that may prevent his or her election, and affirm that all of the required election-information is provided to us, pursuant to the Companies Law. 71 Under the Companies Law, our board of directors must determine the minimum number of directors who are required to have accounting and financial expertise.
Additionally, the nominee must provide details of such skills, and demonstrate an absence of any limitation under the Companies Law that may prevent his or her election, and affirm that all of the required election-information is provided to us, pursuant to the Companies Law.
The Companies Law also permits a company to undertake in advance to indemnify an office holder, provided that if such indemnification relates to financial liability imposed on him or her, as described above, then the undertaking should be limited and shall detail the following foreseen events and amount or criterion: ● to events that in the opinion of the board of directors can be foreseen based on the company’s activities at the time that the undertaking to indemnify is made; and ● in amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances.
An “Administrative Procedure” is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law. 77 The Companies Law also permits a company to undertake in advance to indemnify an office holder, provided that if such indemnification relates to financial liability imposed on him or her, as described above, then the undertaking should be limited and shall detail the following foreseen events and amount or criterion: ● to events that in the opinion of the board of directors can be foreseen based on the company’s activities at the time that the undertaking to indemnify is made; and ● in amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances.
Joint Committee In accordance with the provisions of the Companies Law and the regulations promulgated pursuant to it and under certain conditions, an Israeli company may unite its audit committee, the compensation committee and the financial statement examination committee into one committee, or the Joint Committee.
Ilana Lurie, each of whom is “independent,” as such term is defined in under Nasdaq rules. 75 Joint Committee In accordance with the provisions of the Companies Law and the regulations promulgated pursuant to it and under certain conditions, an Israeli company may unite its audit committee, the compensation committee and the financial statement examination committee into one committee, or the Joint Committee.
Dahan serves both as our Chief Executive Officer and as the Chairman of our board of directors, in accordance with the provisions of the Companies Law and the Companies Regulations (Validity Period of a Decision According to Section 121 of the Companies Law), 5776-2016, which allows such dual office for a period of five years following the completion of the IPO.
Dahan serves both as our Chief Executive Officer and as the Chairman of our board of directors, in accordance with the provisions of the Companies Law and the Companies Regulations (Validity Period of a Decision According to Section 121 of the Companies Law), 5776-2016, which allows such dual office for a period of five years following the completion of the IPO. 69 The board of directors may, subject to the provisions of the Companies Law, delegate any or all of its powers to committees of the board, and it may, from time to time, revoke such delegation or alter the composition of any such committees, subject to certain limitations.
External directors, if applicable, may be elected for up to two additional three-year terms after their initial three-year term under certain circumstances. External directors may be removed from office only under the limited circumstances set forth in the Companies Law. Under the Companies Law, any shareholder holding at least one percent of our outstanding voting power may nominate a director.
External directors, if applicable, may be elected for up to two additional three-year terms after their initial three-year term under certain circumstances. External directors may be removed from office only under the limited circumstances set forth in the Companies Law.
However, any such shareholder may make such a nomination only if a written notice of such shareholder’s intent to make such nomination has been given to our board of directors.
However, any such shareholder may make such a nomination only if a written notice of such shareholder’s intent to make such nomination has been given to our board of directors, in accordance with the provisions of our articles of association and the Companies Law.
The options have expiration dates ranging from December 14, 2027 to November 1, 2031. 69 For so long as we qualify as a foreign private issuer, we will not be required to comply with the proxy rules applicable to U.S. domestic companies regarding disclosure of the compensation of certain executive officers on an individual basis.
The options expire in August 2033 and have an exercise price of $1.32. For so long as we qualify as a foreign private issuer, we will not be required to comply with the proxy rules applicable to U.S. domestic companies regarding disclosure of the compensation of certain executive officers on an individual basis.
Barel served as a Senior Marketing Analyst at Media World Ltd., a global investment and sales company, from February 2010 to December 2013. Prior thereto, between 2006 and 2010, Mr. Barel served as Application and Training Engineer at Applied Materials, Inc. (Nasdaq: AMAT), an international semiconductor equipment and software supplier. Previously, Mr.
Barel previously served as owner at SamsProjects, a consultancy business, from January 2014 to March 2018. Mr. Barel served as a Senior Marketing Analyst at Media World Ltd., a global investment and sales company, from February 2010 to December 2013. Prior thereto, between 2006 and 2010, Mr. Barel served as Application and Training Engineer at Applied Materials, Inc.
Directors’ Service Contracts Other than with respect to our directors who are also executive officers, we do not have written agreements with any director providing for benefits upon the termination of his employment with our company. C. Board Practices Our board of directors presently consists of five members.
For a description of the terms of our options and option plans, see “Item 6.C. Board Practices — Share Option Plan ” below. Directors’ Service Contracts Other than with respect to our directors who are also executive officers, we do not have written agreements with any director providing for benefits upon the termination of his employment with our company. C.
We expect that each such indemnification agreement will provide the office holder with indemnification permitted under applicable law and up to a certain amount, and to the extent that these liabilities are not covered by directors and officers insurance. 80 Exculpation Under the Companies Law, an Israeli company may not exculpate an office holder from liability for a breach of his or her duty of loyalty, but may exculpate in advance an office holder from his or her liability to the company, in whole or in part, for damages caused to the company as a result of a breach of his or her duty of care (other than in relation to distributions), but only if a provision authorizing such exculpation is included in its articles of association.
Exculpation Under the Companies Law, an Israeli company may not exculpate an office holder from liability for a breach of his or her duty of loyalty, but may exculpate in advance an office holder from his or her liability to the company, in whole or in part, for damages caused to the company as a result of a breach of his or her duty of care (other than in relation to distributions), but only if a provision authorizing such exculpation is included in its articles of association.
(3) Cash compensation amounts denominated in NIS were converted into U.S. dollars at the rate of NIS 3.36 per $1.00 (the average exchange rate in 2022). Employment Agreements with Executive Officers We have entered into written employment agreements with each of our executive officers. All of these agreements contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions.
(3) Cash compensation amounts denominated in NIS were converted into U.S. dollars at the rate of NIS 3.69 per $1.00 (the average exchange rate in 2023). 67 Employment Agreements with Executive Officers We have entered into written employment agreements with each of our executive officers.
In December 2022, our board of directors approved the amendment to our 2015 Plan to include restricted stock units under the 2015 Plan. D. Employees As of the date of this annual report, we employ 27 full-time employees, including senior management positions. We have ten part-time employees.
In December 2022, our board of directors approved the amendment to our 2015 Plan to include restricted stock units under the 2015 Plan. D. Employees As of the date of this annual report, we employ 29 full-time employees (including one employee located in Lithuania and two employees located in the United States), and 10 part-time employees.
Langer graduated cum laude and published his thesis and papers on digital pathology in peer reviewed journals. Shmuel Barel, Chief Marketing Officer Mr. Shmuel Barel has served as our Chief Marketing Officer since March 2018. Mr. Barel previously served as owner at SamsProjects, a consultancy business, from January 2014 to March 2018. Mr.
Langer graduated cum laude and published his thesis and papers on digital pathology in peer reviewed journals. Shmuel Barel, Chief Marketing Officer Mr. Shmuel Barel has served as our Chief Marketing Officer since March 2018 and has served as General Manager of Mudra Wearable since January 2024. Mr.
On the other hand, our compensation policy includes measures designed to reduce the executive officer’s incentives to take excessive risks that may harm us in the long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and the total compensation of an executive officer and minimum vesting periods for equity-based compensation.
On the other hand, our compensation policy includes measures designed to reduce the executive officer’s incentives to take excessive risks that may harm us in the long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and the total compensation of an executive officer and minimum vesting periods for equity-based compensation. 74 Our compensation policy also addresses our executive officer’s individual characteristics (such as his or her respective position, education, scope of responsibilities and contribution to the attainment of our goals) as the basis for compensation variation among our executive officers, and considers the internal ratios between compensation of our executive officers and directors and other employees.
Goldman has served as external director for Can-Fite BioPharma Ltd. (NYSE:CANF) since August 2017. Mr. Goldman also serves as a director of Avgol Industries 1953 Ltd., Mivne Real Estate (K.D) Ltd., and Prashkovsky Investments and Construction Ltd. Mr.
He provides consulting services to companies in strategic-financial areas, through his wholly owned company, Maanit-Goldman Management & Investments (2002) Ltd. Mr. Goldman has served as external director for Can-Fite BioPharma Ltd. (NYSE:CANF) since August 2017. Mr. Goldman also serves as a director of Avgol Industries 1953 Ltd., Mivne Real Estate (K.D) Ltd., and Prashkovsky Investments and Construction Ltd. Mr.
Before then, Mr. Remez served as an advisor to our Chief Executive Officer from June 2017 to October 2021. Mr. Remez served as a member on the board of directors of Adshir Ltd. from January 2014 to October 2021. Mr. Remez holds a M.Sc with excellence (magna cum laud) in Mathematics and Computer Science from the Tel Aviv University.
Before then, Mr. Remez served as an advisor to our Chief Executive Officer from June 2017 to October 2021. Mr. Remez served as a member on the board of directors of Adshir Ltd. from January 2014 to October 2021. Mr.
Furthermore, pursuant to these regulations, such company may reappoint a person as an independent director for additional terms, beyond nine years, which do not exceed three years each, if each of the audit committee and the board of directors determine, in that order, that in light of the independent director’s expertise and special contribution to the board of directors and its committees, the reappointment for an additional term is in the company’s best interest.
Furthermore, pursuant to these regulations, such company may reappoint a person as an independent director for additional terms, beyond nine years, which do not exceed three years each, if each of the audit committee and the board of directors determine, in that order, that in light of the independent director’s expertise and special contribution to the board of directors and its committees, the reappointment for an additional term is in the company’s best interest. 70 Alternate Directors Our amended and restated articles of association provide, as allowed by the Companies Law, that any director may, subject to the conditions set thereto including approval of the nominee by our board of directors, appoint a person as an alternate to act in his place, to remove the alternate and appoint another in his place and to appoint an alternate in place of an alternate whose office is vacated for any reason whatsoever.
Salary, bonuses and Related Benefits Pension, Retirement and Other Similar Benefits Share Based Compensation (1) All directors and senior management as a group, consisting of 10 persons as of December 31, 2022 $ 1,940,500 $ 285,483 $ 574,818 (1) Includes: (i) options granted to Alon Mualem to purchase 100,000 Ordinary Shares under the 2015 Plan.
Salary, bonuses and Related Benefits Pension, Retirement and Other Similar Benefits Share Based Compensation (1) All directors and senior management as a group, consisting of 11 persons as of December 31, 2023 $ 1,687,179 $ 409,577 $ 123,303 (1) Includes: (i) options granted to Alon Mualem to purchase 120,000 Ordinary Shares under the Wearable Devices Ltd. 2015 Share Option Plan, as amended, or the 2015 Plan.
From 2013 to 2021, Mr. Bachar was a director of Silentium Ltd. He was a director of Cupixel Ltd. from 2017 to 2021. Mr. Bachar holds a BA in Business Administration and Management from the Reichman University (previously known as IDC Herzliya). Barry Kaplan, Director, Executive Vice President of the U.S. Operations Mr.
Bachar holds a BA in Business Administration and Management from the Reichman University (previously known as IDC Herzliya). Barry Kaplan, Executive Vice President of the U.S. Operations Mr. Barry Kaplan has served as Executive Vice President of the U.S. operations since July 2021. Prior to our IPO, Mr. Kaplan also served as director from April 2018 to September 2022.
In addition, we have entered into agreements with each executive officer and director pursuant to which we will indemnify each of them up to a certain amount and to the extent that these liabilities are not covered by directors and officers insurance. 70 On March 6, 2022, our board of directors determined that it is in the best interest of our company to amend the employment agreements and approve new terms of compensation for each of our officers, subject to the approval of our shareholders.
In addition, we have entered into agreements with each executive officer and director pursuant to which we will indemnify each of them up to a certain amount and to the extent that these liabilities are not covered by directors and officers insurance.
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.
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. 68 Each director, except external directors (if applicable), will hold office until the next annual general meeting of our shareholders following his or her appointment, or until he or she resigns or unless he or she is removed by a majority vote of our shareholders at a general meeting of our shareholders or upon the occurrence of certain events, in accordance with the Companies Law and our amended and restated articles of association.
In addition, the shareholder approval must fulfill one of the following requirements: ● at least a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or ● the shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company. 82 In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years requires the abovementioned approval every three years; however, such transactions not involving the receipt of services or compensation can be approved for a longer term, provided that the audit committee determines that such longer term is reasonable under the circumstances.
In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years requires the abovementioned approval every three years; however, such transactions not involving the receipt of services or compensation can be approved for a longer term, provided that the audit committee determines that such longer term is reasonable under the circumstances.
Kaplan founded and worked as Chief Executive Officer at Gem Nation Corporation, a luxury jewelry and watch etailer. He was Chief Executive Officer and Chief Designer of Alexander Watch LLC from 2014 to 2017. Mr. Kaplan has a Bachelor of Commerce (B.Com) and a Bachelor of Accounting (B.Acc. Hons.) from University of the Witwatersrand (South Africa). Mr.
From 2012 to 2021, Mr. Kaplan worked as Chief of Operations at Stuhrling Original LLC . From 2003 to 2012, Mr. Kaplan founded and worked as Chief Executive Officer at Gem Nation Corporation, a luxury jewelry and watch etailer. He was Chief Executive Officer and Chief Designer of Alexander Watch LLC from 2014 to 2017. Mr.
Approval of Related Party Transactions under Israeli Law General Under the Companies Law, we may approve an action by an office holder from which the office holder would otherwise have to refrain, as described above, if: ● the office holder acts in good faith and the act or its approval does not cause harm to the company; and ● the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company’s approval of such matter. 81 Disclosure of Personal Interests of an Office Holder The Companies Law requires that an office holder disclose to the company, promptly, and, in any event, not later than the board meeting at which the transaction is first discussed, any direct or indirect personal interest that he or she may have and all related material information known to him or her relating to any existing or proposed transaction by the company.
Disclosure of Personal Interests of an Office Holder The Companies Law requires that an office holder disclose to the company, promptly, and, in any event, not later than the board meeting at which the transaction is first discussed, any direct or indirect personal interest that he or she may have and all related material information known to him or her relating to any existing or proposed transaction by the company.
The options expire on January 23, 2032 and have a weighted average exercise price of $0.003 per share; (ii) options granted to Barry Kaplan (a former director) to purchase 234,426 Ordinary Shares under the 2015 Plan.
The options have expiration dates ranging from January 2032 to August 2033, with an exercise price ranging from $0.003 to $1.32; (ii) options granted to Barry Kaplan (a former director) to purchase 254,426 Ordinary Shares under the 2015 Plan.
Kaplan did his accounting traineeship with Grant Thornton and is an expert and published author concerning the luxury watch industry. Yaacov Goldman, Independent Director Mr. Yaacov Goldman has served as one of our directors since September 2022. He provides consulting services to companies in strategic-financial areas, through his wholly owned company, Maanit-Goldman Management & Investments (2002) Ltd. Mr.
Kaplan has a Bachelor of Commerce (B.Com) and a Bachelor of Accounting (B.Acc. Hons.) from University of the Witwatersrand (South Africa). Mr. Kaplan did his accounting traineeship with Grant Thornton and is an expert and published author concerning the luxury watch industry. Yaacov Goldman, Independent Director Mr. Yaacov Goldman has served as one of our directors since September 2022.
However, the enforceability of the noncompetition provisions may be limited under applicable law.
All of these agreements contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable law.
Eli Bachar, Director Mr. Eli Bachar has served as our director since 2016. From 2013 to 2021, Mr. Bachar is a serial investor. He was a director of Xjet3D from 2014 to 2021. From 2015 to 2019, Mr. Bachar was a director of 6 Over 6 Vision Ltd. He was a director of GetSat Ltd. from 2014 to 2021.
Bachar was a director of 6 Over 6 Vision Ltd. He was a director of GetSat Ltd. from 2014 to 2021. From 2013 to 2021, Mr. Bachar was a director of Silentium Ltd. He was a director of Cupixel Ltd. from 2017 to 2021. Mr.
E. Share Ownership See “Item 7.A. Major Shareholders” below. 85
E. Share Ownership See “Item 7.A. Major Shareholders” below. F. Action to Recover Erroneously Awarded Compensation Not applicable. 82
The options expire on November 1, 2031 and have a weighted average exercise price of $0.003 per share. and (v) options granted to Shmuel Barel to purchase 142,213 Ordinary Shares under the 2015 Plan.
The options have expiration dates ranging from January 2032 to August 2033, with an exercise price ranging from $0.003 to $1.32, (v) options granted to Shmuel Barel to purchase 167,213 Ordinary Shares under the 2015 Plan.
The internal auditor undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to our audit committee. We provided a board observer right to one of our beneficial shareholders — Alpha — pursuant to a share purchase agreement, or the Alpha SPA, we entered into in April 2021.
The internal auditor undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to our audit committee. External Directors Under the Companies Law, a public company incorporated in Israel is required to appoint two external directors to serve on its board of directors.
The amendments to the agreements were approved at the shareholders meeting, which took place on March 14, 2022. For a description of the terms of our options and option plans, see “Item 6.C. Board Practices — Share Option Plan ” below.
On March 6, 2022, our board of directors determined that it is in the best interest of our company to amend the employment agreements and approve new terms of compensation for each of our officers, subject to the approval of our shareholders. The amendments to the agreements were approved at the shareholders meeting, which took place on March 14, 2022.
Executive Officer Salary and Related Benefits (1)(3) Bonus Payments, Benefits and Perquisites (3) Share-Based Compensation (2) Total (3) Asher Dahan $ 208,049 $ 125,015 $ - $ 333,064 Guy Wagner $ 206,381 $ 125,015 $ - $ 331,396 Leeor Langer $ 203,934 $ 125,015 $ - $ 328,949 Alon Mualem $ 256,866 $ 160,733 $ 189,824 $ 607,424 Offir Remez $ 185,554 $ 89,296 $ 306,868 $ 581,718 (1) Represents the directors’ and senior management’s gross salary plus payment of mandatory social benefits made by the company on behalf of such persons.
Executive Officer Salary, Bonuses and Related Benefits (1)(3) Social Benefits and Perquisites (3) Share-Based Compensation (2) Total (3) Asher Dahan $ 228,886 $ 62,482 $ 915 $ 292,283 Guy Wagner $ 228,886 $ 61,381 $ 915 $ 291,182 Leeor Langer $ 229,428 $ 61,851 $ 5,322 $ 296,601 Alon Mualem $ 197,314 $ 55,690 $ 74,153 $ 327,157 Barry Kaplan $ 250,000 $ 51,520 $ 2,661 $ 304,181 (1) Represents the directors’ and senior management’s gross salary plus payment of mandatory social benefits made by the company on behalf of such persons.
Removed
(6) Class III directors shall hold office until the annual general meeting to be held in 2025 and until their successors shall have been elected and qualified. 66 Asher Dahan, Chief Executive Officer, Chairman of the Board of Directors Mr.
Added
Remez holds a M.Sc with excellence (magna cum laud) in Mathematics and Computer Science from the Tel Aviv University. 65 Eli Bachar, Director Mr. Eli Bachar has served as our director since 2016. From 2013 to 2021, Mr. Bachar is a serial investor. He was a director of Xjet3D from 2014 to 2021. From 2015 to 2019, Mr.
Removed
Barry Kaplan has served as Executive Vice President of the U.S. operations since July 2021. Prior to our IPO, Mr. Kaplan also served as director from April 2018 to September 2022. From 2012 to 2021, Mr. Kaplan worked as Chief of Operations at Stuhrling Original LLC . From 2003 to 2012, Mr.
Added
The options have expiration dates ranging from December 2027 to August 2033; (vi) options granted to Asher Dahan to purchase 30,000 Ordinary Shares under the 2015 Plan. The options expire in August 2033 and have an exercise price of $1.32; (vii) options granted to Guy Wagner to purchase 30,000 Ordinary Shares under the 2015 Plan.
Removed
Each director, except external directors (if applicable), will hold office until the next annual general meeting of our shareholders following his or her appointment, or until he or she resigns or unless he or she is removed by a majority vote of our shareholders at a general meeting of our shareholders or upon the occurrence of certain events, in accordance with the Companies Law and our amended and restated articles of association.
Added
The options expire in August 2033 and have an exercise price of $1.32; (vii) options granted to Leeor Langer to purchase 30,000 Ordinary Shares under the 2015 Plan. The options expire in August 2033 and have an exercise price of $1.32; (vii) options granted to Yaacov Goldman to purchase 20,000 Ordinary Shares under the 2015 Plan.
Removed
The board of directors may, subject to the provisions of the Companies Law, delegate any or all of its powers to committees of the board, and it may, from time to time, revoke such delegation or alter the composition of any such committees, subject to certain limitations.
Added
The options expire in August 2033 and have an exercise price of $1.32; (vii) options granted to Ilana Lurie to purchase 20,000 Ordinary Shares under the 2015 Plan. The options expire in August 2033 and have an exercise price of $1.32; and (vii) options granted to Eli Bachar to purchase 20,000 Ordinary Shares under the 2015 Plan.
Removed
For more information, see “Item 7.B - Related Party Transactions— Share Purchase Agreement with Alpha.” Alpha’s board observer right shall last until we conduct an initial public offering of our Ordinary Shares, registered pursuant to an effective registration statement under the Securities Act, or the securities laws of another jurisdiction as determined by our board of directors, raising a gross amount of at least $10,000,000 and resulting in the listing of our Ordinary Shares on a trading market (which shall not include any market operated by OTC Markets, Inc.), or Qualified IPO.
Added
Under the Companies Law, any shareholder holding at least one percent of our outstanding voting power may nominate a director at a general meeting of the shareholders.
Removed
We were also obligated to receive Alpha’s prior written consent for a Qualified IPO, which we received in June 2022 in exchange for a cash payment of $300,000 to be paid to Alpha from our proceeds from the IPO, which we believe will constitute a Qualified IPO.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

16 edited+12 added−16 removed13 unchanged
Biggest change(5) 1,226,442 8.1 % Mudra CEO LLC (6) 912,235 6.0 % Directors and senior management who are not 5% holders: Eli Bachar* 276,640 1.8 % Barry Kaplan (7) 234,426 1.5 % Alon Mualem (8) 44,444 0.3 % Yaacov Goldman * 0 - Ilana Lurie * 0 - All directors and senior management as a group (8 persons) 5,055,510 32.2 % * Indicates director of the Company.
Biggest changeNo. of Shares Beneficially Owned Percentage Owned Holders of more than 5% of our voting securities: Asher Dahan * (1) 1,350,000 6.6 % Guy Wagner * (2) 1,800,000 8.8 % Leeor Langer (3) 1,350,000 6.6 % Alumot (4) 1,198,774 5.9 % Directors and senior management who are not 5% holders: Eli Bachar * (5) 276,640 1.3 % Barry Kaplan (6) 234,426 1.1 % Alon Mualem (7) 77,778 0.4 % Offir Remez (8) 137,000 0.7 % Shmuel Barel (9) 135,546 0.7 % Tamar Fleisher (10) 14,167 0.1 % Yaacov Goldman * (11) 0 - Ilana Lurie * (11) 0 - All directors and senior management as a group (11 persons) 5,375,557 25.4 % * Indicates director of the Company.
Major Shareholders The following table sets forth information regarding beneficial ownership of our Ordinary Shares as of March 20, 2023 by: ● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares; ● each of our directors, and executive officers; and ● all of our directors, and executive officers as a group.
Major Shareholders The following table sets forth information regarding beneficial ownership of our Ordinary Shares as of March 13, 2024 by: ● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares; ● each of our directors, and executive officers; and ● all of our directors, and executive officers as a group.
Ordinary Shares issuable pursuant to outstanding options or warrants to purchase Ordinary Shares that are exercisable, or securities that are convertible into Ordinary Shares, within 60 days after March 20, 2023, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options, warrants or convertible securities, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
Ordinary Shares issuable pursuant to outstanding options or warrants to purchase Ordinary Shares that are exercisable, or securities that are convertible into Ordinary Shares, within 60 days after March 13, 2024, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options, warrants or convertible securities, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
This number is not representative of the number of beneficial holders of our shares nor is it representative of where such beneficial holders reside, since many of these shares were held of record by brokers or other nominees.
Record Holders As of March 13, 2024, there were 25 shareholders of record of our Ordinary Shares. This number is not representative of the number of beneficial holders of our shares nor is it representative of where such beneficial holders reside, since many of these shares were held of record by brokers or other nominees.
Chaim Fischer has the sole voting and investment control over the shares. (7) Consists of 234,426 Ordinary Shares issuable upon exercise of outstanding options that are exercisable within 60 days. Mr. Kaplan’s options have expiration dates ranging from April 26, 2028 to July 1, 2031, and a weighted average exercise price of $2.251.
(6) Consists of 234,426 Ordinary Shares issuable upon exercise of outstanding options that are exercisable within 60 days. Mr. Kaplan’s options have expiration dates ranging from April 26, 2028 to July 1, 2031, and a weighted average exercise price of $2.251. In addition, Mr.
We describe our option plans under “Item 6.C Board Practices — Share Option Plan.” If the relationship between us and an executive officer or a director is terminated, except for cause (as defined in the various option plan agreements), options that are vested will generally remain exercisable for three months after such termination. 87 Employment Agreement with Barry Kaplan In July 2021, effective as of July 1, 2021, our subsidiary, Mudra Wearable Inc., entered into an employment agreement with Barry Kaplan.
We describe our option plans under “Item 6.C Board Practices — Share Option Plan.” If the relationship between us and an executive officer or a director is terminated, except for cause (as defined in the various option plan agreements), options that are vested will generally remain exercisable for three months after such termination.
(1) The beneficial ownership is based on a Schedule 13G filed by Mr. Dahan with the SEC on February 13, 2023. (2) The beneficial ownership is based on a Schedule 13G filed by Mr. Wagner with the SEC on February 13, 2023. (3) The beneficial ownership is based on a Schedule 13G filed by Mr.
(3) The beneficial ownership is based on a Schedule 13G filed by Mr. Langer with the SEC on February 13, 2023. In addition, Mr.
Muallem’s options have expiration dates January 2032, and a weighted average exercise price of $0.003. 86 Changes in Percentage Ownership by Major Shareholders Over the course of 2022, there was an increase in the percentage ownership of OurCrowd General Partner, L.P. (from 0% to 8.1%) as a result of their purchase of our shares from Hubble Ventures Co., Ltd.
Over the course of 2022, there was an increase in the percentage ownership of OurCrowd General Partner, L.P. (from 0% to 8.1%) as a result of their purchase of our shares from Hubble Ventures Co., Ltd.
Pursuant to the terms of his employment agreement, Mudra Wearable Inc. pays Mr. Kaplan a gross annual salary of $200,000 for his services as the Executive Vice President of the U.S. Operations. In addition to options received for service as one of our directors, on July 1, 2021, we also issued Mr.
Employment Agreement with Barry Kaplan In July 2021, effective as of July 1, 2021, our subsidiary, Mudra Wearable, entered into an employment agreement with Barry Kaplan. Pursuant to the terms of his employment agreement, Mudra Wearable pays Mr. Kaplan a gross annual salary of $200,000 for his services as the Executive Vice President of the U.S. Operations.
Over the course of 2021, there were decreases in the percentage ownership of our major shareholders of: (ii) Asher Dahan (from 29.2% to 12.1%), (iii) Leeor Langer (from 29.2% to 12.1%), and (vi) Guy Wagner (from 38.9% to 16.2%).
Additionally, Hubble Ventures Co., Ltd.’s ownership decreased from 11.0% to 0% as a result of the sale of their shares to OurCrowd General Partner, L.P. 84 Over the course of 2021, there were decreases in the percentage ownership of our major shareholders of: (ii) Asher Dahan (from 29.2% to 12.1%), (iii) Leeor Langer (from 29.2% to 12.1%), and (vi) Guy Wagner (from 38.9% to 16.2%).
Percentage of shares beneficially owned is based on 15,218,845 Ordinary Shares outstanding on March 20, 2023.
Percentage of shares beneficially owned is based on 20,387,428 Ordinary Shares outstanding on March 13, 2024.
On March 6, 2022, our board of directors approved and ratified the employment agreement by and between the Company and Mr. Kaplan. This amendment was subsequently approved by our shareholders on March 14, 2022. As of the effective date of the agreement, our board and shareholders have approved a grant payment to Mr.
Kaplan may terminate the employment agreement by providing 30 days’ prior written notice. 85 On March 6, 2022, our board of directors approved and ratified the employment agreement by and between the Company and Mr. Kaplan. This amendment was subsequently approved by our shareholders on March 14, 2022.
Kaplan for the completion of the IPO, in a total amount equal to three monthly salaries. In September 2022, the amount of the grant payment was increased to 5 monthly salary pursuant to the compensation committee approval and our board of directors approval.
As of the effective date of the agreement, our board and shareholders approved a grant payment to Mr. Kaplan for the completion of the IPO, in a total amount equal to three months’ salary. In September 2022, our board of directors approved the increase of Mr.
Kaplan options to purchase 50,000 Ordinary Shares under our 2015 Plan, at an exercise price of $2.25 per share. Pursuant to the employment agreement, we or Mr. Kaplan may terminate the employment agreement by providing 30 days’ prior written notice.
In addition to options received for service as one of our directors, on July 1, 2021, we also issued Mr. Kaplan options to purchase 50,000 Ordinary Shares under our 2015 Plan, at an exercise price of $2.25 per share. Pursuant to the employment agreement, we or Mr.
(8) Consists of 44,444 Ordinary Shares issuable upon exercise of outstanding options that are exercisable within 60 days. In addition, Mr. Muallem holds options to purchase 55,556 Ordinary Shares that are not exercisable within 60 days. Mr.
Kaplan holds options to purchase 15,000 Ordinary Shares that are not exercisable within 60 days, at an exercise price of $1.32 and with an expiration date of August 2033. (7) Consists of 77,778 Ordinary Shares issuable upon exercise of outstanding options that are exercisable within 60 days. In addition, Mr.
Langer with the SEC on February 13, 2023. (4) The beneficial ownership is based on transfer agent report dated March 20, 2023. Alumot is a private Cayman Islands company. Alexandr Khamidullin has the sole voting and investment control over the shares. (5) The beneficial ownership is based on transfer agent report dated March 20, 2023.
Alexandr Khamidullin has the sole voting and investment control over the shares. (5) The beneficial ownership consists of 92,213 Ordinary Shares based on transfer agent report dated March 13, 2024 and 184,427 Ordinary Shares issuable upon exercise of outstanding options that are exercisable within 60 days. Mr.
Removed
No. of Shares Beneficially Owned Percentage Owned Holders of more than 5% of our voting securities: Asher Dahan * (1) 1,350,000 9.0 % Guy Wagner * (2) 1,800,000 12.0 % Leeor Langer (3) 1,350,000 9.0 % Alumot (4) 1,198,774 7.9 % OurCrowd General Partner, L.P.
Added
(1) The beneficial ownership is based on a Schedule 13G filed by Mr. Dahan with the SEC on February 13, 2023. In addition, Mr. Dahan hold options to purchase 30,000 Ordinary Shares that are not exercisable within 60 days, with expiration dates of November 2033, with an exercise price of $1.32.
Removed
OurCrowd General Partner, L.P. is a private Cayman Islands company, which is owned by OurCrowd General Partner Limited. Jonathan Medved holds 80% voting interest and Steven Blumgart holds 20% voting interest in OurCrowd General Partner Limited. (6) The beneficial ownership is based on transfer agent report dated March 20, 2023. Mudra CEO LLC is a private Delaware-based company.
Added
(2) The beneficial ownership is based on a Schedule 13G filed by Mr. Wagner with the SEC on February 13, 2023. In addition, Mr. Wagner hold options to purchase 30,000 Ordinary Shares that are not exercisable within 60 days, with expiration dates of November 2033, with an exercise price of $1.32.
Removed
Additionally, Hubble Ventures Co., Ltd.’s ownership decreased from 11.0% to 0% as a result of the sale of their shares to OurCrowd General Partner, L.P.
Added
Langer hold options to purchase 30,000 Ordinary Shares that are not exercisable within 60 days, with expiration dates of August 2033, with an exercise price of $1.32. 83 (4) The beneficial ownership is based on transfer agent report dated March 13, 2024. Alumot is a private Cayman Islands company.
Removed
Over the course of 2020, there were no changes in the percentage ownership of our major shareholders. Record Holders As of March 20, 2023, there were 33 shareholders of record of our Ordinary Shares.
Added
Bachar’s options have an expiration date of November 2027, and a weighted average exercise price of $0.003. In addition, Mr. Bahar holds options to purchase 20,000 Ordinary Shares that are not exercisable within 60 days, at an exercise price of $1.32 and with an expiration date of November 2033.
Removed
Share Purchase Agreement with Alpha In April 2021, we entered into a share purchase agreement with one of our shareholders, Alpha, for a subscription amount of $1,000,000. We issued to Alpha for their subscription amount 444,091 Ordinary Shares and warrants to purchase up to 222,045 Ordinary Shares for an aggregate amount equal to 50% of Alpha’s subscription amount.
Added
Mualem holds options to purchase 42,222 Ordinary Shares that are not exercisable within 60 days. Mr. Mualem’s options have expiration dates ranging from January 2032 to August 2033, with an exercise price ranging from $0.003 to $1.32. (8) Consists of 137,000 Ordinary Shares issuable upon exercise of outstanding options that are exercisable within 60 days. Mr.
Removed
Alpha’s warrants are exercisable until the earlier of: (i) 18 months from a Qualified IPO; (ii) a change of control event, such as sale of all or substantially all of our assets or the majority of shares, merger, consolidation or other business combination of us into another company or sale, lease, transfer, or exclusive license or disposition of all or substantially all of our intellectual property, or (iii) three years from April 22, 2021.
Added
Remez’s options have an expiration date of November 1, 2031, and a weighted average exercise price of $0.003. In addition, Mr. Remez holds options to purchase 20,000 Ordinary Shares that are not exercisable within 60 days, at an exercise price of $1.32 and with an expiration date of August 2033.
Removed
Additionally, pursuant to a per share purchase price protection provision, if we close a Qualified IPO reflecting a pre-money valuation of $26,400,000, or a lower one, then Alpha and other investors, who participated in the April 2021 financing (each of which investors entered into a separate share purchase agreement with us), were entitled to receive additional Ordinary Shares and additional shares underlying each warrant, based on the Discounted PPS, less the number of Ordinary Shares issued to them in the April 2021 financing, and the number of shares covered by each warrant shall be increased assuming the exercise amount is divided by the Discounted PPS.
Added
(9) Consists of 135,546 Ordinary Shares issuable upon exercise of outstanding options that are exercisable within 60 days. In addition, Mr. Barel holds options to purchase 31,667 Ordinary Shares that are not exercisable within 60 days. Mr. Barel options have expiration dates ranging from December 2027 to August 2033, and an exercise price ranging from $0.003 to $1.32.
Removed
The other investors from the April 2021 financing entered into their share purchase agreements with us on April 22, 2021. The share purchase agreements of such investors contain substantially similar terms as Alpha’s share purchase agreement, except that only Alpha has the right to approve our Qualified IPO and the right to designate a board observer.
Added
(10) Consists of 14,167 Ordinary Shares issuable upon exercise of outstanding options that are exercisable within 60 days. In addition, Ms. Fleisher holds options to purchase 35,833 Ordinary Shares that are not exercisable within 60 days. Ms. Fleisher options have expiration dates ranging from January 2033 to August 2033, with an exercise price ranging from $0.66 to $1.32. (11) Ms.
Removed
The number of Ordinary Shares underlying each warrant issued in April 2021 shall also be increased assuming the aggregate exercise amount is divided by the Discounted PPS. Our IPO constituted a Qualified IPO that reflected a pre-money valuation of more than $26,400,000 and, accordingly, no additional Ordinary Shares were issued or adjustments were made pursuant to the foregoing provision.
Added
Lurie and Mr. Goldman have no Ordinary Shares issuable upon exercise of outstanding options that are exercisable within 60 days. In addition, Ms. Lurie and Mr. Goldman each hold options to purchase 20,000 Ordinary Shares that are not exercisable within 60 days, with expiration dates ranging of November 2033, with an exercise price of $1.32.
Removed
Additionally, pursuant to the April 2021 SPA, we entered into with Alpha and certain other investors, beginning on April 22, 2021 and until the earlier of (i) the 90th calendar day after the expiration of the investors’ applicable lock-ups or (ii) three years from April 22, 2021, if we or our subsidiary shall issue any Ordinary Shares or equivalents of Ordinary Shares, in an equity transaction other than an exempt issuance, entitling any person or entity to acquire Ordinary Shares at an effective price per share less than the per share purchase price of $2.25 (subject to prior adjustment for reverse and forward stock splits and the like), or an SPA Dilutive Issuance, then, for no additional consideration, we shall immediately issue to Alpha and other investors in the April 2021 financing that number of additional Ordinary Shares equal to (a) the per share purchase price of $2.25 divided by amount actually paid in new cash consideration by third parties for each Ordinary Share in the SPA Dilutive Issuance less (b) the number of Ordinary Shares issued to Alpha and other investors at the closing of the April 2021 financing pursuant to the April 2021 SPAs.
Added
Changes in Percentage Ownership by Major Shareholders Over the course of 2023, there was a decrease in the percentage ownership of OurCrowd General Partner, L.P. (from 8.1% to 0%) and a decrease in the percentage ownership of Mudra CEO LLC (from 6.0% to 0%).
Removed
Additionally, pursuant to the share purchase agreement, we provided Alpha with a board observer right to designate one person, reasonably acceptable to us, to attend all our board of directors meetings and conference calls as an observer, with no right to vote on any matter.
Added
In addition, there were decreases in the percentage ownership of: (i) Alumot (from 7.9% to 5.9%), (ii) Asher Dahan (from 9.0% to 6.6%), (iii) Leeor Langer (from 9.0% to 6.6%), (iv) Guy Wagner (from 12.0% to 8.8%), which were due to the dilution as a result of warrant exercises in June 2023 and a public offering in November 2023.
Removed
Such observer shall receive all information, written or oral, which our management provides to the other directors our company from time to time. Alpha’s board observer right shall last until we conduct a Qualified IPO.
Added
Kaplan’s gross annual salary to $250,000 per year and the amount of the grant payment was increased to an amount equal to five months’ salary pursuant to the approval of our compensation committee and our board of directors. C. Interests of Experts and Counsel None.
Removed
Pursuant to the Alpha SPA, we were also obligated to receive Alpha’s prior written consent for a Qualified IPO, which we received in June 2022 in exchange for a cash payment of $300,000 to be paid from the proceeds of our IPO.
Removed
Pursuant to the June 2022 Consent, Alpha and the other investors in the April 2021 financing waived their rights for adjustments under the per share purchase price protection provision (described above) as of the date of the IPO, but all such adjustments otherwise required by per share purchase price protection provision shall be effected on the 90th calendar day following the closing of the IPO, at the time of the Exercise Price Adjustment, or December 14, 2022, or an SPA Dilutive Issuance, and Alpha and other investors in the April 2021 financing will retain all of their rights pursuant to per share purchase price protection provision and subsequent sales equity provision (described above) with respect to any issuances of Ordinary Shares or equivalents of Ordinary Share other than securities issued in our IPO.
Removed
Pursuant to the June 2022 Consent, additional securities following such adjustments shall not be delivered to Alpha until 120 days after the closing date of our IPO, or January 2023. Following the closing of the IPO, on September 28, 2022, we have paid Alpha $300,000 from the proceeds of the IPO, as compensation for the June 2022 Consent.
Removed
Following the Exercise Price Adjustment, on February 16, 2023, we have issued an aggregate of 169,125 Ordinary Shares to Alpha and the other investors in the April 2021 financing. We do not have any remaining obligation to issue additional securities as a result of our IPO. 88 B. Interests of Experts and Counsel None.

Other WLDSW 10-K year-over-year comparisons