UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

Under the Securities Exchange Act of 1934

 

For the Month of August 2025 (Report No. 2)

 

001-41502 (Commission File Number)

 

WEARABLE DEVICES LTD.

(Exact name of Registrant as specified in its charter)

 

5 Ha-Tnufa Street

Yokne-am Illit, Israel 2066736

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annualreports under cover Form 20-F or Form 40-F.

 

Form 20-F           Form 40-F

 

 

 

 

 

CONTENTS

 

OnAugust 6, 2025, Wearable Devices Ltd. (the “Company”) entered into an inducement offer letter agreement (the “InducementLetter”) with a holder (the “Holder”) of certain of the Company’s existing warrants to purchase up to 1,661,000ordinary shares, no par value per share (the “Ordinary Shares”) of the Company, issued on April 30, 2025, at an exercise priceof $1.45 per Ordinary Share (the “Existing Warrants”).

 

Pursuantto the Inducement Letter, the Holder agreed to exercise for cash its Existing Warrants, in consideration of the Company’s agreementto issue new warrants (the “New Warrants”) to purchase up to 3,322,000 Ordinary Shares (the “New Warrant Shares”),at an exercise price of $1.71 per Ordinary Share. The Company expects to receive aggregate gross proceeds of approximately $2.4 millionfrom the exercise of the Existing Warrants by the Holder, before deducting fees and other expenses payable by the Company. The Companyintends to use the net proceeds from the exercise of the Existing Warrants for working capital and general corporate purposes.

 

TheCompany has engaged A.G.P./Alliance Global Partners (the “Financial Advisor”) to render financial services in connection withthe transactions contemplated by the Inducement Letter and has agreed to pay the Financial Advisor a cash fee equal to 8.0% of the aggregategross proceeds received from the Holder’s exercise of the Existing Warrants. In addition, the Company has also agreed to pay theFinancial Advisor up to $25,000 for legal fees.

 

Theclosing of the transactions contemplated pursuant to the Inducement Letter is expected to occur on or about August 7, 2025 (the “ClosingDate”), subject to satisfaction of customary closing conditions.

 

Theresale of the Ordinary Shares underlying the Existing Warrants have been registered pursuant to an existing registration statement onForm F-3 (File No. 333-287247), declared effective by the Securities and Exchange Commission (the “SEC”) on May 22, 2025.

 

TheCompany also agreed to file a registration statement on Form F-1 or Form F-3 to register the resale of the New Warrant Shares. The Companycommitted to file such registration statement within 30 calendar days of the date of Shareholder Approval (as defined below), to use commerciallyreasonable efforts to cause it to become effective within 60 calendar days of such date (or 90 days in case of a review by the SEC), andto keep it effective at all times until no holder of the New Warrants owns any New Warrants or New Warrant Shares. The Company also agreednot to effect or agree to effect any Variable Rate Transaction (as defined in the Inducement Letter) for a period of 15 days after thedate of the Inducement Letter (subject to certain exceptions).

 

TheNew Warrants and the New Warrant Shares are being offered and sold pursuant to an exemption from the registration requirements under Section4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Holder has represented that it is an accreditedinvestor as defined in Rule 501 of the Securities Act and has acquired such securities for its own account and has no arrangements orunderstandings for any distribution thereof. The offer and sale of the New Warrants and New Warrant Shares is being made without any formof general solicitation or advertising. The New Warrants and the New Warrant Shares have not been registered under the Securities Actor applicable state securities laws. Accordingly, the New Warrants and New Warrant Shares may not be offered or sold in the United Statesexcept pursuant to an effective registration statement or an applicable exemption from the registration requirements of the SecuritiesAct and such applicable state securities laws.

 

ThisReport of Foreign Private Issuer on Form 6-K (this “Form 6-K”) shall not constitute an offer to sell or the solicitation tobuy nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawfulprior to registration or qualification under the securities laws of any such state or jurisdiction.

 

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Terms of the New Warrants

 

Thefollowing summary of certain terms and provisions of the New Warrants is not complete and is subject to, and qualified in its entiretyby, the provisions of the New Warrants, the form of which is filed as Exhibit 4.1 to this Form 6-K and is incorporated herein by reference.

 

Issuance,Duration and Exercise Price

 

The issuance of the New Warrantsis subject to shareholder approval (the “Shareholder Approval”). Each New Warrant will have an exercise price equal to $1.71per Ordinary Share. The New Warrants will be immediately exercisable on the date of Shareholder Approval (the “Initial ExerciseDate”) and will expire on the five-year anniversary of the Initial Exercise Date. The Company shall hold an annual or special meetingof shareholders on or prior to the date that is 90 days following the Closing Date for the purpose of obtaining the Shareholder Approval.If the Company does not obtain Shareholder Approval at the first meeting, the Company shall call a meeting every 90 days thereafter toseek Shareholder Approval until the earlier of the date on which Shareholder Approval is obtained or the New Warrants are no longer outstanding.The exercise price and the number of Ordinary Shares issuable upon exercise of the New Warrants are subject to adjustment in the eventof share dividends, share splits, subsequent rights offerings, pro rata distributions, reorganizations, or similar events affecting theOrdinary Shares or the exercise price.

 

Exercisability

 

TheNew Warrants will be exercisable at any time on or after the Initial Exercise Date, at the option of each holder, in whole or in part,by delivering to us a duly executed exercise notice accompanied by payment in full for the number of Ordinary Shares purchased upon suchexercise (except in the case of a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise anyportion of such holder’s New Warrants to the extent that the holder would own more than 4.99% (or, at the election of the holder,9.99%) of the Company’s outstanding Ordinary Shares immediately after exercise, except that upon prior notice from the holder tous, the holder may increase or decrease the amount of ownership of outstanding Ordinary Shares after exercising the holder’s NewWarrants up to 9.99% of the number of the Company’s Ordinary Shares outstanding immediately after giving effect to the exercise,as such percentage ownership is determined in accordance with the terms of the New Warrants. Furthermore, the holder will not exceed beneficialownership of 24.99% at any time.

 

CashlessExercise

 

If,at the time after the six month anniversary of the date of issuance a registration statement registering the resale of the New WarrantShares by the holder under the Securities Act is not then effective or available, then in lieu of making the cash payment otherwise contemplatedto be made to the Company upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive uponsuch exercise (either in whole or in part), the net number of Ordinary Shares determined according to a formula set forth in the New Warrants.

 

TradingMarket

 

Thereis no established trading market for the New Warrants, and the Company does not expect an active trading market to develop. The Companydoes not intend to apply to list the New Warrants on any securities exchange or other trading market. Without a trading market, the liquidityof the New Warrants will be extremely limited.

 

Rightsas a Shareholder

 

Exceptas otherwise provided in the New Warrants or by virtue of the holder’s ownership of the Company’s Ordinary Shares, such holderof New Warrants does not have the rights or privileges of a holder of the Company’s Ordinary Shares, including any voting rights,until such holder exercises such holder’s New Warrants. The New Warrants will provide that the holders of the New Warrants havethe right to participate in distributions or dividends paid on the Company’s Ordinary Shares.

 

FundamentalTransactions

 

If,at any time while the New Warrants are outstanding, the Company, either directly or indirectly, effects a Fundamental Transaction (asdefined in the New Warrants), each holder will have the right to receive, upon exercise of the New Warrants, the same amount and kindof securities, cash, or other property that the holder would have received had the holder exercised the New Warrants immediately priorto the Fundamental Transaction. In addition, in certain cases, and at the holder’s option, the Company may be required to repurchasethe unexercised portion of the New Warrants from the holder for cash equal to the Black Scholes Value (as defined in the New Warrants)of such portion, subject to the terms and conditions set forth in the New Warrants.

 

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Waiversand Amendments

 

TheNew Warrants may be modified or amended or the provisions of the New Warrants waived with the Company’s and the holder’s writtenconsent.

 

Theforms of Inducement Letter and the New Warrant are attached as Exhibits 10.1 and 4.1, respectively. The description of the terms of theInducement Letter and the New Warrants are not intended to be complete and are qualified in its entirety by reference to such exhibits.The Inducement Letter contains customary representations, warranties and covenants by us which were made only for the purposes of suchagreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreedupon by the contracting parties.

 

PressRelease

 

OnAugust 6, 2025, the Company issued a press release titled “Wearable Devices Ltd. Announces a Warrant Inducement Transaction for$2.4 Million in Gross Proceeds,” a copy of which is furnished as Exhibit 99.1 with this Form 6-K.

 

Forward-Looking Statements

 

ThisForm 6-K contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private SecuritiesLitigation Reform Act of 1995 and other Federal securities laws. For example, the Company is using forward-looking statements when itdiscusses the expected closing of the transactions contemplated by the Inducement Letter, the use of proceeds, and the satisfaction ofcustomary closing conditions. All statements other than statements of historical facts included in this Form 6-K are forward-looking statements.Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’scurrent beliefs, expectations and assumptions regarding the future of its business, future plans and strategies, projections, anticipatedevents and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subjectto inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’scontrol. The Company’s actual results and financial condition may differ materially from those indicated in the forward-lookingstatements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause the Company’sactual results and financial condition to differ materially from those indicated in the forward-looking statements include among others,the following: the trading of its ordinary shares or warrants and the development of a liquid trading market; the Company’s abilityto successfully market its products and services; the acceptance of the Company’s products and services by customers; the Company’scontinued ability to pay operating costs and ability to meet demand for its products and services; the amount and nature of competitionfrom other security and telecom products and services; the effects of changes in the cybersecurity and telecom markets; the Company’sability to successfully develop new products and services; the Company’s success establishing and maintaining collaborative, strategicalliance agreements, licensing and supplier arrangements; the Company’s ability to comply with applicable regulations; and otherrisks and uncertainties described in the Company’s annual report on Form 20-F for the year ended December 31, 2024, filed with theCommission on March 20, 2025. The Company undertakes no obligation to publicly update any forward-looking statement, whether written ororal, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 

This Form 6-K and the press release attached hereto as Exhibit 99.1 are incorporated by reference intothe registration statements on Form S-8 (File Nos. 333-284010,333-269869 and 333-274343)and on Form F-3 (File Nos. 333-274841and 333-287247) of theCompany, filed with the Securities and Exchange Commission, to be a part thereof from the date on which this report is submitted, to theextent not superseded by documents or reports subsequently filed or furnished.

 

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Exhibit Index

 

Exhibit No.   Description
4.1   Form of New Warrant
10.1   Form of Inducement Letter
99.1   Press Release issued by Wearable Devices Ltd. dated August 6, 2025, titled “Wearable Devices Ltd. Announces a Warrant Inducement Transaction for $2.4 Million in Gross Proceeds.”

 

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SIGNATURES

 

Pursuant to the requirementsof the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 

Date: August 7, 2025 By: /s/ Asher Dahan
    Asher Dahan
    Chief Executive Officer

 

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Exhibit 4.1

 

THISSECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPONAN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, THISSECURITY MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO ANAVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITHAPPLICABLE STATE SECURITIES LAWS.

 

ORDINARYSHARES PURCHASE WARRANT

 

WearableDevices Ltd.

 

Warrant Shares: 3,322,000 Original Issue Date: August [●], 2025

 

THIS ORDINARY SHARES PURCHASEWARRANT (the “Warrant”) certifies that, for value received, Armistice Capital Master Fund Ltd. or its assigns (the“Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter setforth, at any time on or after the date of Shareholder Approval (the “Initial Exercise Date”) and on or prior to 5:00p.m. (New York City time) on the five (5) year anniversary of the Initial Exercise Date (the “Termination Date”) butnot thereafter, to subscribe for and purchase from Wearable Devices Ltd., a company organized under the laws of Israel (the “Company”),up to 3,322,000 ordinary shares, no par value per share (the “Ordinary Shares”) (as subject to adjustment hereunder,the “Warrant Shares”). The purchase price of one Ordinary Share under this Warrant shall be equal to the Exercise Price,as defined in Section 2(b).

 

Section 1. Definitions.Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Warrant Inducement Agreement(the “Inducement Agreement”), dated August 6, 2025, by and between the Company and the purchaser signatory thereto.

 

Section 2. Exercise.

 

a) Exercise of Warrant.Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the InitialExercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submittedby e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto as Exhibit A (the “Noticeof Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard SettlementPeriod (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the unpaid portionof the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’scheck drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicableNotice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guaranteeor notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be requiredto physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and theWarrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three(3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resultingin purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstandingnumber of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares. The Holder and the Companyshall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objectionto any Notice of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant,acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder,the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

 

For the avoidance of doubt, there is no circumstancethat would require the Company to net cash settle the Warrants.

 

b) Exercise Price.The exercise price under this Warrant shall be $1.71 per Ordinary Share, subject to adjustment hereunder (the “ExercisePrice”).

 

c) Cashless Exercise.If at any time after the six month anniversary of the Original Issue Date, there is no effective registration statement registering, orthe prospectus contained therein is not available for the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised,in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a numberof Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = as applicable: (i)the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1)both executed and delivered pursuant to Section ‎2(a) above on a day that is not a Trading Day, or (2) both executed and deliveredpursuant to Section ‎2(a) above on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(77)of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the VWAP on the Trading Day immediatelypreceding the date of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours”on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular tradinghours” on a Trading Day) pursuant to Section ‎2(a) above, or (iii) the VWAP on the date of the applicable Noticeof Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuantto Section ‎2(a) above after the close of “regular trading hours” on such Trading Day;

 

(B) = the Exercise Price, as adjustedhereunder; and

 

(X) = the number of Warrant Shares thatwould be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cashexercise rather than a cashless exercise.

 

If Warrant Shares are issued in such a cashlessexercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall takeon the registered characteristics, if any, of the Warrants being exercised. The Company agrees not to take any position contrary to thisSection 2(c).

 

Bid Price”means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listedor quoted on a Trading Market, the bid price of an Ordinary Share for the time in question (or the nearest preceding date) on the TradingMarket on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (NewYork City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price ofthe Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are notthen listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares are then reported in the “Pink Sheets”published by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recentbid price per Ordinary Share so reported, or (d) in all other cases, the fair market value of an Ordinary Share as determined by an independentappraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable tothe Company, the fees and expenses of which shall be paid by the Company.

 

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Trading Day”means any day on which the Trading Market is open for trading, including any day on which the Trading Market is open for trading for aperiod of time less than the customary time.

 

Trading Market”means any of the following markets or exchanges on which the Ordinary Shares is listed or quoted for trading on the date in question:the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange(or any successors to any of the foregoing).

 

VWAP”means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listedor quoted on a Trading Market, the daily volume weighted average price of the Ordinary Shares for such date (or the nearest precedingdate) on the Trading Market on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Dayfrom 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weightedaverage price of the Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the OrdinaryShares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares are then reported in the “PinkSheets” published by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices),the most recent Bid Price per Ordinary Share so reported, or (d) in all other cases, the fair market value of an Ordinary Share as determinedby an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonablyacceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

d) Mechanics of Exercise.

 

i. Delivery ofWarrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted to the Holder by creditingthe account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawalat Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effectiveregistration statement permitting the issuance of the Warrant Shares to, or resale of, the Warrant Shares by the Holder or (B) the WarrantShares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exerciseof the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name ofthe Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the addressspecified by the Holder in the Notice of Exercise by the date that is the earliest of (i) one (1) Trading Day after the delivery to theCompany of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company, and (iii) thenumber of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date,the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporatepurposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespectiveof the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashlessexercise) is received within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard SettlementPeriod following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subjectto a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder in cash, as liquidated damages and notas a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Ordinary Shares on the date of theapplicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third (3rd) Trading Day after the WarrantShare Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescindssuch exercise. The Company agrees to maintain a transfer agent and registrar (which may be the Transfer Agent) that is a participant inthe FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period”means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respectto the Ordinary Shares as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect toany Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be deliveredat any time after the time of execution of the Inducement Agreement, the Company agrees to deliver, or cause to be delivered, the WarrantShares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall bethe Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the caseof a cashless exercise) is received by such Warrant Share Delivery Date.

 

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ii. Deliveryof New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder andupon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant certificateevidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant certificateshall in all other respects be identical with this Warrant.

 

iii. RescissionRights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv. Compensationfor Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, ifthe Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by itsbroker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Ordinary Sharesto deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a“Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’stotal purchase price (including brokerage commissions, if any) for the Ordinary Shares so purchased exceeds (y) the amount obtained bymultiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise atissue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder,either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in whichcase such exercise shall be deemed rescinded) or deliver to the Holder the number of Ordinary Shares that would have been issued had theCompany timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary Shares havinga total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants with an aggregate sale price givingrise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to paythe Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of theBuy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursueany other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/orinjunctive relief with respect to the Company’s failure to timely deliver Ordinary Shares upon exercise of the Warrant as requiredpursuant to the terms hereof.

 

v. No FractionalShares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. Asto any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election,either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price orround up to the next whole Ordinary Share.

 

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vi. Charges,Taxes and Expenses. The issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or otherincidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, andsuch Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered forexercise shall be accompanied by the Assignment Form attached hereto as Exhibit B duly executed by the Holder and the Companymay require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Companyshall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

vii. Closingof Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant,pursuant to the terms hereof.

 

e) Holder’s ExerciseLimitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portionof this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forthon the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates, (ii) any other Persons acting as agroup together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial ownership of theOrdinary Shares would or could be aggregated with the Holder’s for the purposes of Section 13(d) of the Exchange Act (such Persons,“Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).For purposes of the foregoing sentence, the number of Ordinary Shares beneficially owned by the Holder and its Affiliates and AttributionParties shall include the number of Warrant Shares with respect to which such determination is being made, but shall exclude the numberof the Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially ownedby the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portionof any other securities of the Company (including, without limitation, any other Ordinary Share Equivalents) subject to a limitation onconversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or AttributionParties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated inaccordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holderthat the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and theHolder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation containedin this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holdertogether with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretionof the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrantis exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of whichportion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation (as defined herein), and the Companyshall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrantthat are not in compliance with the Beneficial Ownership Limitation, except to the extent the Holder relies on the number of outstandingOrdinary Shares that was provided by the Company. In addition, a determination as to any group status as contemplated above shall be determinedin accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder and the Company shall have noobligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant that are notin compliance with the Beneficial Ownership Limitation, except to the extent the Holder relies on the number of outstanding Ordinary Sharesthat was provided by the Company. For purposes of this Section 2(e), in determining the number of outstanding Ordinary Shares, a Holdermay rely on the number of outstanding Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filedwith the Securities and Exchange Commission (the “Commission”), as the case may be, (B) a more recent public announcementby the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Ordinary Shares outstanding.Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder thenumber of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined after giving effectto the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Partiessince the date as of which such number of outstanding Ordinary Shares was reported. The “Beneficial Ownership Limitation”shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of Ordinary Shares outstandingimmediately after giving effect to the issuance of Warrant Shares; provided that the Holder will not exceed beneficial ownership of 24.99%at any time. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediatelyafter giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after suchnotice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than instrict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistentwith the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properlygive effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. In additionto the above, the Holder will not hold at any time Ordinary Shares (whether issued at the Closing, or issued as Warrant Shares or purchasedor otherwise obtained) that would cause the Holder and its Affiliates’ holdings together with the holdings of any Person actingas a group together with such Holder and/or its Affiliate to represent 25% or more of the total voting rights in the Company, unless incompliance with the special tender offer rules as provided in sections 328-335 of the Israeli Companies Law 5759-1999 and guidance ofthe Israel Securities Authority. If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, noalternate consideration is owing to the Holder.

 

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Section 3. Certain Adjustments.

 

a) Share Dividends andSplits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distributionon its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt,shall not include any Warrant Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Ordinary Sharesinto a larger number of shares, (iii) combines (including by way of reverse share split) outstanding Ordinary Shares into a smaller numberof shares or (iv) issues by reclassification of Ordinary Shares any shares of capital stock of the Company, then in each case the ExercisePrice shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any)outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediatelyafter such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregateExercise Price of this Warrant remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediatelyafter the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effectiveimmediately after the effective date in the case of a subdivision, combination or re-classification.

 

b) [RESERVED]

 

c) Subsequent Rights Offerings.In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Ordinary SharesEquivalents or rights to purchase Ordinary Shares, warrants, securities or other property pro rata to the record holders of any classof Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicableto such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of OrdinaryShares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation,the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such PurchaseRights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant,issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such PurchaseRight would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate insuch Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right to such extent)and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would notresult in the Holder exceeding the Beneficial Ownership Limitation).

 

d) Pro Rata Distributions.During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets(or rights to acquire its assets) to holders of Ordinary Shares , by way of return of capital or otherwise (including, without limitation,any distribution of cash, Ordinary Shares or other securities, property or options by way of a dividend, spin off, reclassification, corporaterearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuanceof this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that theHolder would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of thisWarrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediatelybefore the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holdersof Ordinary Shares are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’sright to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holdershall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares as a resultof such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder untilsuch time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

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e) Fundamental Transaction.

 

(i) If, at any time whilethis Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidationof the Company with or into another Person, (ii) the Company (or any Subsidiary), directly or indirectly, effects any sale, lease, license,assignment, transfer, conveyance or other disposition of all or substantially all of the Company’s assets in one or a series ofrelated transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or anotherPerson) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities,cash or property and has been accepted by the holders of more than 50% of the outstanding Ordinary Shares or more than 50% of the votingpower of the share equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,reorganization or recapitalization of Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares are effectivelyconverted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more relatedtransactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganizationor recapitalization that requires the approval of the shareholders of the Company, spin-off, merger or scheme of arrangement) with anotherPerson or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Ordinary Shares or more than 50%of the voting power of the share equity of the Company (each a “Fundamental Transaction”), then, upon any subsequentexercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exerciseimmediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation inSection 2(e) on the exercise of this Warrant), the number of Ordinary Shares of the successor or acquiring corporation or of the Company,if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable asa result of such Fundamental Transaction by a holder of the number of Ordinary Shares for which this Warrant is exercisable immediatelyprior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposesof any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Considerationbased on the amount of Alternate Consideration issuable in respect of one Ordinary Share in such Fundamental Transaction, and the Companyshall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any differentcomponents of the Alternate Consideration. If holders of Ordinary Shares are given any choice as to the securities, cash or property tobe received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receivesupon any exercise of this Warrant following such Fundamental Transaction. provided, however, that, if the Fundamental Transaction is notwithin the Company’s control, including not approved by the Board of Directors, the Holder shall only be entitled to receive fromthe Company or any Successor Entity the same type or form of consideration (and in the same proportion), at the value of the unexercisedportion of this Warrant, that is being offered and paid to the holders of Ordinary Shares in connection with the Fundamental Transaction,whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Ordinary Shares are giventhe choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further,that if holders of Ordinary Shares are not offered or paid any consideration in such Fundamental Transaction, such holders will be deemedto have received Ordinary Shares of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction)in such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is notthe survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrantand the other Transaction Documents. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to theterm “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction,each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer insteadto each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities,jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or SuccessorEntities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents withthe same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Companyherein.

 

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(ii) Redemption Right.Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below)shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the FundamentalTransaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), redeem this Warrant from theHolder (in accordance with Section 312 of the Israeli Companies Law, 5759-1999) by paying to the Holder an amount of cash equal to theBlack Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such FundamentalTransaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approvedby the Company’s Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity the sametype or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, thatis being offered and paid to the holders of Ordinary Shares of the Company in connection with the Fundamental Transaction, whether thatconsideration be in the form of cash, shares or any combination thereof, or whether the holders of Ordinary Shares are given the choiceto receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holdersof Ordinary Shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of OrdinaryShares will be deemed to have received share equity of the Successor Entity (which Entity may be the Company following such FundamentalTransaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-ScholesOption Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicableFundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate fora period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date,(B) an expected volatility equal to the volatility for the remaining exercise period as obtained from the HVT function on Bloomberg (determinedutilizing a 252 day annualization factor) as of the Trading Day immediately following the consummation of the applicable contemplatedFundamental Transaction, (C) the underlying price per share used in such calculation shall be the VWAP for the 30 days prior to the TradingDay immediately preceding the consummation of the applicable contemplated Fundamental Transaction and (D) a remaining option time equalto the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date and (E) costof borrow for the Company’s shares at the exercise date. The payment of the Black Scholes Value will be made by wire transfer ofimmediately available funds (or such other consideration) within the later of (i) five Business Days of the Holder’s election and(ii) the date of consummation of the Fundamental Transaction.

 

f) Calculations. Allcalculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposesof this Section 3, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the numberof Ordinary Shares (excluding treasury shares, if any) issued and outstanding.

 

g) Notice to Holder.

 

i. Adjustment to Exercise Price.Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holderby facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of WarrantShares and setting forth a brief statement of the facts requiring such adjustment.

 

ii. Notice to Allow Exercise by Holder.If (A) the Company declares a dividend (or any other distribution in whatever form) on the Ordinary Shares, (B) the Company declares aspecial nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company authorizes the granting to all holders ofthe Ordinary Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) theapproval of any shareholders of the Company is required in connection with any Fundamental Transaction, or (E) the Company authorizesthe voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shallcause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the WarrantRegister of the Company, at least five (5) calendar days prior to the applicable record or effective date hereinafter specified, a noticestating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants,or if a record is not to be taken, the date as of which the holders of the Ordinary Shares of record to be entitled to such dividend,distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger,sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of theOrdinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable uponsuch reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or anydefect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such noticeand provided, further that no notice shall be required if the information is disseminated in a press release or document filed with theCommission within such time period. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-publicinformation regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuantto a Report on Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such noticeto the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

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(h) Voluntary AdjustmentBy Company. Subject to the rules and regulations of the Trading Market and requirements of any applicable law, the Company may atany time during the term of this Warrant, subject to the consent of the Holder, reduce the then current Exercise Price to any amount andfor any period of time deemed appropriate by the board of directors of the Company

 

Section 4. Transfer ofWarrant.

 

a) Transferability.Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rightshereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrantat the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in theform attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable uponthe making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant orWarrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrumentof assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrantshall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrenderthis Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrantto the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning thisWarrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of WarrantShares without having a new Warrant issued.

 

b) New Warrants. ThisWarrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together witha written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall executeand deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with thisWarrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c) Warrant Register.The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”),in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actualnotice to the contrary.

 

(d) Transfer Restrictions.If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall notbe either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securitiesor blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirementspursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant,as the case may be, comply with the provisions of Section (b) of the Inducement Agreement regarding the delivery of New Warrant Certificates(as defined in the Inducement Agreement) without legends.

 

(e) Representation by theHolder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof,will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or resellingsuch Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant tosales registered or exempted under the Securities Act.

 

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Section 5. Miscellaneous.

 

a) Currency. All dollaramounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”). All amounts owing under this Warrantshall be paid in U.S. Dollars. All amounts denominated in other currencies shall be converted in the U.S. Dollar equivalent amount inaccordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of currencyto be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar exchange rate as published in the Wall Street Journal (NYedition) on the relevant date of calculation.

 

b) No Rights as ShareholderUntil Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights asa shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or toreceive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settlean exercise of this Warrant.

 

c) Loss, Theft, Destructionor Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of theloss, theft, destruction or mutilation of this Warrant or any share certificate relating to the Warrant Shares, and in case of loss, theftor destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the postingof any bond), and upon surrender and cancellation of such Warrant or share certificate, if mutilated, the Company will make and delivera new Warrant or share certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or share certificate.

 

d) Saturdays, Sundays,Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted hereinshall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.

 

e) Authorized Shares.The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Ordinary Sharesa sufficient number of shares to provide for the issuance of the Warrant Shares underlying this Warrant. The Company further covenantsthat its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessaryWarrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may benecessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, orof any requirements of the Trading Market upon which the Ordinary Shares may be listed. The Company covenants that all Warrant Sharesunderlying this Warrant, which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exerciseof the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validlyissued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof(other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent aswaived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its articles of incorporationor through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntaryaction, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faithassist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rightsof Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) notincrease the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase inpar value (it is being clarified that the foregoing shall not prevent the Company from effecting a reverse share split in order to satisfylisting requirements), (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legallyissue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtainall such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enablethe Company to perform its obligations under this Warrant.

 

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Before taking any action whichwould result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Companyshall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body orbodies having jurisdiction thereof.

 

f) Jurisdiction. Allquestions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance withthe provisions of the Inducement Agreement.

 

g) Restrictions. TheHolder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not utilizecashless exercise, will have restrictions upon resale imposed by state and federal securities laws, and in such case, the Holder, by theacceptance hereof, represents and warrants that the Holder will acquire such Warrant Shares issuable upon such exercise for its own accountand not with a view to or for distributing or reselling Warrant Shares or any part thereof in violation of the Securities Act or any applicablestate securities law.

 

h) Nonwaiver and Expenses.No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such rightor otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Companywillfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Companyshall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonableattorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant heretoor in otherwise enforcing any of its rights, powers or remedies hereunder.

 

i) Notices. Any notice,request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordancewith the notice provisions of the Inducement Agreement.

 

j) Limitation of Liability.No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and noenumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price ofany Ordinary Share or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

k) Remedies. The Holder,in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performanceof its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred byreason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action forspecific performance that a remedy at law would be adequate.

 

l) Successors and Assigns.Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of andbe binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisionsof this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holderor holder of Warrant Shares.

 

m) Amendment and Waiver.This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

n) Severability. Whereverpossible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but ifany provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extentof such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

o) Headings. The headingsused in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

********************

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the Companyhas caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

  Wearable Devices Ltd.
   
  By:               
  Name:   
  Title:  

 

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EXHIBITA

 

NOTICE OF EXERCISE

 

TO: Wearable Devices Ltd.

 

(1) The undersigned hereby elects to purchase________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewithpayment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Payment shall take the form of (check applicablebox):

 

in lawful money of the United States; or

 

if permitted, the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3) Please issue said Warrant Shares in the nameof the undersigned or in such other name as is specified below:

 

   

 

The Warrant Shares shall be delivered to the followingDWAC Account Number:

 

   
   
   
   

[SIGNATURE OF HOLDER]

 

Name of Investing Entity:

 

   

 

Signature of Authorized Signatory of Investing Entity:

 

   

 

Name of Authorized Signatory:

 

   

 

Title of Authorized Signatory:

 

   

 

Date:

 

   

 

 

EXHIBITB

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute thisform and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant andall rights evidenced thereby are hereby assigned to

 

Name:  
  (Please Print)
   
Address:  
  (Please Print)
   
Phone Number:  
   
Email Address:  
   
Dated:____________ _____, ______  
   

 

Holder’s Signature:
   
   
   
   
Holder’s Address:
   
   
   

 

 

Exhibit 10.1

 

WEARABLE DEVICES Ltd.
5 Ha-Tnufa Street
Yokne-am Illit, Israel 2066736

 

August 6, 2025

 

To the Holder of Ordinary Shares Purchase Warrants Issued on April30, 2025

 

Re:Inducement Offer to Exercise Existing Ordinary Shares PurchaseWarrants

 

Dear Holder:

 

Wearable Devices Ltd. (the “Company”)is pleased to offer (this “Inducement Offer”) to you (“Holder”, “you” or similarterminology) the opportunity to receive new warrants (the “New Warrants”) to purchase up to 3,322,000 shares (the “NewWarrant Shares”) of the Company’s ordinary shares, no par value per share (the “Ordinary Shares”),which is equal to 200% of the number of Ordinary Shares issuable upon exercise of certain outstanding warrants to purchase up to1,661,000 Ordinary Shares issued to you on April 30, 2025 and currently held by you (the “Existing Warrants”),as more particularly set forth on the signature page hereto, in consideration for exercising for cash any or all such Existing Warrants.The issuance, or resale, of the Ordinary Shares underlying the Existing Warrants have been registered pursuant to the Company’seffective registration statement on Form F-3 (File No. 333-287247). The Ordinary Shares underlying the Existing Warrants are referredto herein as the “Warrant Shares” and the effective registration statement on Form F-3 referenced in the foregoingsentence is referred to herein as the “Registration Statement.” The Registration Statement is currently effective and,upon exercise of the Existing Warrants pursuant to this letter agreement, will remain effective for the resale of the Warrant Shares.Capitalized terms not otherwise defined herein shall have the meanings set forth in the New Warrants.

 

The Company is making you this offer during theperiod from the date of this Inducement Offer set forth above and until 9:00 a.m. Eastern Time, on August 7, 2025 (the “ExercisePeriod”). Exercise of the Existing Warrants may be made, in whole or in part, at any time or times during the Exercise Periodby delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exerciseattached to the Existing Warrants, as applicable; provided, that the exercise of Existing Warrants will be accompanied bypayment in full of the exercise price of the Existing Warrants to the Company. In consideration for exercising the Existing Warrants heldby the Holder, and each time that the Holder exercises Existing Warrants pursuant to the terms of this Offer (the “Warrant Exercise”),the Company hereby offers to issue you or your designees:

 

(a)unregistered warrants to purchase up to 3,322,000 New Warrant Shares, which equals 200% ofthe number of Warrant Shares issued pursuant to the exercise of Existing Warrants, which New Warrants shall be issued pursuant to Section4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”), and which New Warrants shall be substantiallyin the form as set forth in Exhibit A hereto. The New Warrants will be exercisable on or after the date on which suchapproval as may be required by the applicable rules and regulations of the Nasdaq Stock Market from the shareholders of the Company withrespect to the exercise of the New Warrants and the issuance of all of the New Warrant Shares upon exercise thereof (the “ShareholderApproval”) and have an exercise price of $1.71 per share. The New Warrants will have a term of exercise of five (5) years fromthe date of Shareholder Approval; and

 

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(b)the New Warrants certificates will be delivered within one (1) Trading Day following the Warrant Exercise,and such New Warrants, together with any New Warrant Shares, shall, unless and until registered, contain customary restrictive legendsand other language typical for an unregistered warrant and unregistered shares. Notwithstanding anything herein to the contrary, in theevent that any Warrant Exercise would otherwise cause the Holder to exceed the beneficial ownership limitations (“BeneficialOwnership Limitation”) set forth in Section 2(e) of the Existing Warrants (or, if applicable and at the Holder’selection, 9.99%), the Company shall only issue such number of Warrant Shares to the Holder that would not cause the Holder to exceed themaximum number of Warrant Shares permitted thereunder, as directed by the Holder, with the balance to be held in abeyance until noticefrom the Holder that the balance (or portion thereof) may be issued in compliance with such limitations, which abeyance shall be evidencedthrough the Existing Warrants which shall be deemed prepaid thereafter (including the payment in full of the exercise price), and exercisedpursuant to a Notice of Exercise in the Existing Warrants (provided no additional exercise price shall be due and payable). The partieshereby agree that the Beneficial Ownership Limitation for purposes of the Existing Warrants is as set forth on the Holder’s signaturepage hereto.

 

Expressly subject to the paragraph immediatelyfollowing this paragraph below, the Holder may accept this offer by signing this letter agreement below, which constitutes the Holder’sacceptance to exercise Existing Warrants at the Holder’s own discretion subject to the Beneficial Ownership Limitation set forthin Section 2(e) of the Existing Warrants.

 

In addition, the Company agrees to the representations,warranties and covenants set forth on Annex A attached hereto.

 

The Holder represents and warrants that, asof the date hereof, the Holder is fully aware of, and has reviewed all of the Company’s public filings.

 

Holder represents and warrants that, as of thedate hereof it is, and on each date on which it exercises any New Warrants it will be, an “accredited investor” as definedin Rule 501 of Regulation D promulgated under the Securities Act, and agrees that the New Warrants will contain restrictive legends whenissued, and neither the New Warrants nor the New Warrant Shares will be registered under the Securities Act, except as provided in Annex Aattached hereto. Also, the Holder represents and warrants that it is acquiring the New Warrants as principal for its own account and hasno direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the New Warrantsor the New Warrant Shares (this representation is not limiting Holder’s right to sell the New Warrant Shares pursuant to an effectiveregistration statement under the Securities Act or otherwise in compliance with applicable federal and state securities laws).

 

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The Holder understands that the issuance of theNew Warrants and the New Warrant Shares are not, and may never be, registered under the Securities Act, or the securities laws of anystate and, accordingly, each certificate, if any, representing such securities shall bear a legend substantially similar to the following:

 

THISSECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPONAN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, THISSECURITY MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO ANAVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITHAPPLICABLE STATE SECURITIES LAWS.”

 

Upon the Holder’s exercise of the New Warrants,certificates evidencing the New Warrant Shares shall not contain any legend (including the legend set forth above), (i) while a registrationstatement covering the resale of such New Warrant Shares is effective under the Securities Act, (ii) following any sale of such NewWarrant Shares pursuant to Rule 144 under the Securities Act, (iii) if such New Warrant Shares are eligible for sale under Rule 144(assuming cashless exercise of the New Warrants), without the requirement for the Company to be in compliance with the current publicinformation requirement under Rule 144 as to such New Warrant Shares and without volume or manner-of-sale restrictions, (iv) if such NewWarrant Shares may be sold under Rule 144 (assuming cashless exercise of the New Warrants) and the Company is then in compliancewith the current public information requirement under Rule 144 as to such New Warrant Shares, or (v) if such legend is not required underapplicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Securitiesand Exchange Commission (the “Commission”) and the earliest of clauses (i) through (v), the “Delegend Date”)).The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Delegend Date if required by theCompany and/or the Transfer Agent to effect the removal of the legend hereunder, or at the request of the Holder, which opinion shallbe in form and substance reasonably acceptable to the Holder. From and after the Delegend Date, such New Warrant Shares shall be issuedfree of all legends, provided that, upon request of the Company (which request shall also include a form of customary representation letter),the Holder has delivered in advance to the Company a customary representation letter that is reasonably satisfactory to the Company andits counsel. The Company agrees that following the Delegend Date or at such time as such legend is no longer required under this Section,it will, no later than one (1) Trading Day following the delivery by the Holder to the Company or the Transfer Agent of a certificaterepresenting the New Warrant Shares issued with a restrictive legend, along with such certificate(s) or other documentation reasonablyrequested by the Company’s counsel and/or the Company’s transfer agent (the “Transfer Agent”), includinga customary representation letter, in form and substance reasonably acceptable to the Company’s counsel and/or the Transfer Agent(such first (1st) Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to the Holdera certificate representing such shares that is free from all restrictive and other legends or, at the request of the Holder, shall creditthe account of the Holder’s prime broker with the Depository Trust Company System as directed by the Holder.

 

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In addition to the Holder’s other availableremedies, the Company shall pay to a Holder, in cash, (i) as partial liquidated damages and not as a penalty, for each $1,000 ofNew Warrant Shares (based on the VWAP of the Ordinary Shares on the date such New Warrant Shares are submitted to the Transfer Agent)delivered for removal of the restrictive legend, $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after suchdamages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legendand (ii) if the Company fails to (a) issue and deliver (or cause to be delivered) to the Holder by the Legend Removal Date a certificaterepresenting the New Warrant Shares free from all restrictive and other legends and (b) if after the Legend Removal Date the Holder purchases(in an open market transaction or otherwise) Ordinary Shares to deliver in satisfaction of a sale by the Holder of all or any portionof the number of Ordinary Shares, or a sale of a number of Ordinary Shares equal to all or any portion of the number of Ordinary Sharesthat the Holder anticipated receiving from the Company without any restrictive legend, then, an amount equal to the excess of the Holder’stotal purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the Ordinary Shares so purchased (includingbrokerage commissions and other out-of-pocket expenses, if any) over the product of (A) such number of New Warrant Shares that the Companywas required to deliver to the Holder by the Legend Removal Date and for which the Holder was required to purchase shares to timely satisfydelivery requirements, multiplied by (B) the weighted average price at which the Holder sold that number of Ordinary Shares.

 

If this offer is accepted and this offer letteris executed, then on or before 8:30 a.m., Eastern Time, on the Trading Day following the date hereof, the Company shall issue a pressrelease and/or file a Report of Foreign Private Issuer on Form 6-K (a “Report”) with the Commission disclosing allmaterial terms of the transactions contemplated hereunder, including this letter agreement as an exhibit thereto with the Commission.From and after the issuance of such press release or filing of such Report, as applicable, the Company represents to you that it shallhave publicly disclosed all material, non-public information delivered to you by the Company, or any of its respective officers, directors,employees or agents in connection with the transactions contemplated hereunder. In addition, effective upon the issuance of such pressrelease and/or filing of such Report, the Company acknowledges and agrees that any and all confidentiality or similar obligations underany agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents,employees or Affiliates on the one hand, and you and your Affiliates on the other hand, shall terminate. The Company represents, warrantsand covenants that, upon acceptance of this offer, and upon issuance of the Warrant Shares upon exercise of the Existing Warrants, theWarrant Shares shall be issued free of any legends or restrictions on resale by Holder.

 

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No later than the first (1st) TradingDay following the date hereof, the closing (“Closing”) shall occur at such location as the parties shall mutually agree.Unless otherwise directed by A.G.P./Alliance Global Partners. (the “Financial Advisor”), settlement of the WarrantShares shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date, the Company shallissue the Warrant Shares registered in the Holder’s name and address provided to the Company in writing and released by the TransferAgent directly to the account(s) at the Financial Advisor identified by the Holder; upon receipt of such Warrant Shares, the FinancialAdvisor shall promptly electronically deliver such Warrant Shares to the Holder, and payment therefor shall concurrently be made to theCompany by the Financial Advisor (or its clearing firm) by wire transfer to the Company). The date of the Closing of the exercise of theExisting Warrants shall be referred to as the “Closing Date.”

 

Governing Law. All questions concerningthe construction, validity, enforcement and interpretation of this letter agreement shall be governed by and construed and enforced inaccordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agreesthat all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this letter agreementand the New Warrant (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners,members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each partyhereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattanfor the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein(including with respect to the enforcement of any of this letter agreement and the New Warrant), and hereby irrevocably waives, and agreesnot to assert in any action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that suchaction or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal serviceof process and consents to process being served in any such action or proceeding by mailing a copy thereof via registered or certifiedmail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement andagrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall bedeemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an action or proceedingto enforce any provisions of this letter agreement or the New Warrant, then, in addition to the obligations of the Company under the followingparagraph, the prevailing party in such action or proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

5

 

Indemnification. Subject to the provisionsof this paragraph, the Company will indemnify and hold each Holder and its directors, officers, shareholders, members, partners, employeesand agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such titleor any other title), each Person who controls each  Holder (within the meaning of Section 15 of the Securities Act and Section 20of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), and the directors, officers, shareholders,agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstandinga lack of such title or any other title) of such controlling persons (each, a “Holder Party”) harmless from any andall losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements,court costs and reasonable attorneys’ fees and costs of investigation that any such Holder Party may suffer or incur as a resultof or relating to (a) any material breach of any of the representations, warranties, covenants or agreements made by the Company in thisoffer letter or the New Warrant or (b) any action instituted against each  Holder Parties in any capacity, or any of them or theirrespective Affiliates, by any shareholder of the Company who is not an Affiliate of such Holder Party, with respect to any of the transactionscontemplated by this offer letter or the New Warrant (unless such action is solely based upon a material breach of such  Holder Party’srepresentations, warranties or covenants under this offer letter or any agreements or understandings such  Holder Party may havewith any such shareholder or any violations by such  Holder Party of state or federal securities laws or any conduct by such Holder Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct), or (c) in connectionwith the Registration Statement or the Resale Registration Statement,  the Company will indemnify each  Holder Party, to thefullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, withoutlimitation, reasonable attorneys’ fees) and expenses, as incurred, arising out of or relating to (i) any untrue or alleged untruestatement of a material fact contained in the Registration Statement or the Resale Registration Statement, any prospectus or any formof prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omissionor alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectusor supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only tothe extent, that such untrue statements or omissions are based solely upon information regarding such  Holder Party furnished inwriting to the Company by such Holder Party expressly for use therein, or (ii) any violation or alleged violation by the Company of theSecurities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder in connection therewith. If any actionshall be brought against any Holder Party in respect of which indemnity may be sought pursuant to this Agreement, such Holder Party shallpromptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosingreasonably acceptable to each Holder Party. Any Holder Party shall have the right to employ separate counsel in any such action and participatein the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Holder Party except to the extent that(x) the employment thereof has been specifically authorized by the Company in writing, (y) the Company has failed after a reasonableperiod of time to assume such defense and to employ counsel or (z) in such action there is, in the reasonable opinion of counsel, a materialconflict on any material issue between the position of the Company and the position of such  Holder Party, in which case the Companyshall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable toany  Holder Party under this Agreement (1) for any settlement by a  Holder Party effected without the Company’s priorwritten consent, which shall not be unreasonably withheld or delayed; or (2) to the extent, but only to the extent that a loss, claim,damage or liability is attributable to any  Holder Party’s breach of any of the representations, warranties, covenants or agreementsmade by such  Holder Party in this offer letter or the New Warrant. The indemnification required by this paragraph shall be madeby periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred;provided, however, that if it is subsequently determined by a final, non-appealable judgment of a court of competent jurisdiction thateach  Holder was not entitled to receive such payments, each Holder shall promptly (but in no event later than five (5) BusinessDays) return such payments to the Company. The indemnity agreements contained herein shall be in addition to any cause of action or similarright of any Holder Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

 

Person” means an individualor corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stockcompany, government (or an agency or subdivision thereof) or other entity of any kind.

 

[Signature page follows]

 

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Sincerely yours,

 

Wearable Devices Ltd.

 

By:    
Name:    
Title:    

 

[Wearable Devices Ltd. Signature Page to
Warrant Inducement Agreement, dated August 6, 2025]

 

 

HOLDERSIGNATURE PAGE TO
Wearable Devices Ltd. Warrant Inducement Agreement

 

Accepted and Agreed to:

 

Name of Holder: _______________________________________________________________

 

Signature of Authorized Signatory of Holder: _________________________________________

 

Name of Authorized Signatory: ____________________________________________________

 

Title of Authorized Signatory: _____________________________________________________

 

Number of Existing Warrants: ______________________________________________________

 

Aggregate Warrant Exercise Price being exercised contemporaneouslywith signing this letter agreement:  _____________________________________________________________________________

 

Existing Warrants Beneficial Ownership Blocker: 4.99% or 9.99%

 

New Warrants: (up to 200% of total Existing Warrants being exercised):_______________________

 

New Warrants Beneficial Ownership Blocker: 4.99% or 9.99%

 

DTC Instructions:_______________________________________________________________

 

[Holder Signature Page to Wearable Devices Ltd. Warrant Inducement Agreement]

 

 

Annex A

 

Representations, Warranties and Covenants ofthe Company. The Company hereby makes the following representations and warranties to the Holder:

 

(a)SEC Reports. The Company has filed all reports, schedules, forms, statements and other documentsrequired to be filed by the Company under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years precedingthe date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials,including the exhibits thereto and documents incorporated by reference therein “SEC Reports”). As of their respectivedates, the SEC Reports complied in all material respects with the requirements of the Exchange Act and none of the SEC Reports, when filed,contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in orderto make the statements therein, in the light of the circumstances under which they were made, not misleading except as otherwise notedin a subsequent SEC Report.

 

(b)Authorization; Enforcement. The Company has the requisite corporate power and authority to enterinto and to consummate the transactions contemplated by this letter agreement and otherwise to carry out its obligations hereunder. Theexecution and delivery of this letter agreement by the Company and the consummation by the Company of the transactions contemplated herebyhave been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its boardof directors or its shareholders in connection herewith, if applicable. This letter agreement has been duly executed by the Company and,when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable againstthe Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency,reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) aslimited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofaras indemnification and contribution provisions may be limited by applicable law. The New Warrants and New Warrant Shares are duly authorizedand the New Warrant Shares, when issued and paid for in accordance with the terms of this letter agreement and the New Warrants, willbe duly and validly issued, fully paid and nonassessable, free and clear of all liens imposed by the Company. The New Warrants constitutevalid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except: (i) assuch enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generallyand subject to general principles of equity.

 

(c)No Conflicts. The execution, delivery and performance of this letter agreement by the Company andthe consummation by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provisionof the Company’s certificate or articles of incorporation, bylaws or other organizational or charter documents; or (ii) conflictwith, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creationof any liens, claims, security interests, other encumbrances or defects upon any of the properties or assets of the Company in connectionwith, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both)of, any material agreement, credit facility, debt or other material instrument (evidencing Company debt or otherwise) or other materialunderstanding to which such Company is a party or by which any property or asset of the Company is bound or affected; or (iii) conflictwith or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmentalauthority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or assetof the Company is bound or affected, except, in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expectedto result in a material adverse effect upon the business, prospects, properties, operations, condition (financial or otherwise) or resultsof operations of the Company, taken as a whole, or in its ability to perform its obligations under this letter agreement.

 

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(d)Registration Obligations. As soon as reasonably practicable (and in any event within thirty (30)calendar days following the date of the Shareholder Approval), the Company shall file a registration statement on Form F-1 providing forthe resale of the New Warrant Shares by the holders of the New Warrants (the “Resale Registration Statement”). TheCompany shall use commercially reasonable efforts to cause the Resale Registration Statement to become effective within sixty (60) calendardays following the date of the Shareholder Approval (or within ninety (90) calendar days following the date of the Shareholder Approvalin case of a review of such registration statement by the Commission) and to keep the Resale Registration Statement effective at all timesuntil no holder of the New Warrants owns any New Warrants or New Warrant Shares.

 

(e)Trading Market. Except as related to the Shareholder Approval, the transactions contemplated underthis letter agreement comply with all the rules and regulations of the Nasdaq Capital Market.

 

(f)Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorizationor order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmentalauthority or other Person in connection with the execution, delivery and performance by the Company of this letter agreement, other than:(i) the filings required pursuant to this letter agreement; and (ii) application(s) or notice to each applicable Trading Marketfor the listing of the New Warrants and New Warrant Shares for trading thereon in the time and manner required thereby.

 

(g)Listing of Ordinary Shares. The Holder is fully aware of, and has reviewed all of the Company’spublic filings on EDGAR since January 1, 2024. The Company agrees, if the Company applies to have the Ordinary Shares traded on any otherTrading Market, it will then include in such application all of the New Warrant Shares, and will take such other action as is necessaryto cause all of the New Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will thentake all action reasonably necessary to continue the listing and trading of its Ordinary Shares on a Trading Market and will comply inall respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Companyagrees to maintain the eligibility of the Ordinary Shares for electronic transfer through the Depository Trust Company or another establishedclearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other establishedclearing corporation in connection with such electronic transfer. In addition, and if applicable, the Company shall hold an annual orspecial meeting of stockholders on or prior to the date that is ninety days (90) following the Closing Date for the purpose of obtainingShareholder Approval, with the recommendation of the Company’s Board of Directors that such proposals are approved, and the Companyshall solicit proxies from its stockholders in connection therewith in the same manner as all other management proposals in such proxystatement and all management-appointed proxyholders shall vote their proxies in favor of such proposals. If the Company does not obtainShareholder Approval at the first meeting, the Company shall call a meeting every ninety (90) days thereafter to seek Shareholder Approvaluntil the earlier of the date on which Shareholder Approval is obtained or the New Warrants are no longer outstanding.

 

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(h)Subsequent Equity Sales.

 

i.Until fifteen (15) days following the date of this letter agreement, neither the Company nor any Subsidiaryshall (A) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Ordinary Shares or Ordinary SharesEquivalents or (B) file any registration statement or any amendment or supplement to any existing registration statement (other than thefiling of (x) the Resale Registration Statement referred to herein, (y) any prospectus or prospectus supplement, or (z) a registrationstatement on Form S-8 in connection with any employee benefit plan); provided, however, the Company may enter into this Inducement Agreementand any other inducement agreement entered into by other holders of Existing Warrants with respect to the inducement offer being madeherein. Notwithstanding the foregoing, this Section (h)(i) shall not apply in respect of an Exempt Issuance. “Exempt Issuance”means the issuance of (a) Ordinary Shares or options to employees, officers or directors of the Company pursuant to any stock or optionplan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members ofa committee of non-employee directors established for such purpose for services rendered to the Company, (b) Ordinary Shares issuableupon the exercise or exchange of or conversion of any securities issued hereunder and/or other securities exercisable or exchangeablefor or convertible into Ordinary Shares issued and outstanding on the date of this letter agreement, (c) securities issued pursuant toacquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securitiesare issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit thefiling of any registration statement in connection therewith during the prohibition period in this Section (h)(i), and provided that anysuch issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operatingcompany or an owner of an asset in a business and shall provide to the Company additional benefits in addition to the investment of funds,(d) any securities pursuant to transactions that qualify as “exempt issuances” that are as defined and permitted pursuantto any currently outstanding agreements of the Company. “Person” means an individual or corporation, partnership, trust,incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency orsubdivision thereof) or other entity of any kind.

 

ii.Until fifteen (15) days following the date of this letter agreement, the Company shall be prohibited fromeffecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Ordinary Shares or OrdinaryShares Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction”means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable orexercisable for, or include the right to receive additional Ordinary Shares either (A) at a conversion price, exercise price or exchangerate or other price that is based upon and/or varies with the trading prices of or quotations for the Ordinary Shares at any time afterthe initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to beingreset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingentevents directly or indirectly related to the business of the Company or the market for the Ordinary Shares or (ii) enters into, or effectsa transaction under, any agreement, including, but not limited to, an equity line of credit or an “at the market offering”,whereby the Company may issue securities at a future determined price regardless of whether shares pursuant to such agreement have actuallybeen issued and regardless of whether such agreement is subsequently canceled. The Holder shall be entitled to obtain injunctive reliefagainst the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. “OrdinaryShares Equivalents” means any securities of the Company or its subsidiaries which would entitle the holder thereof to acquireat any time Ordinary Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument thatis at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares.

 

iii.Notwithstanding the foregoing, this Section (h) shall not apply in respect of an Exempt Issuance.

 

iv.The Holder consents to the use of the proceeds from the exercise of the Existing Warrants to settle outstandinglitigation.

 

(i)Blue Sky Filings. The Company shall take such action as the Company shall reasonably determineis necessary in order to obtain an exemption for, or to qualify the New Warrants and New Warrant Shares for, sale to the Holder at Closingunder applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actionspromptly upon request of any Holder.

 

A-3

 

Exhibit A

 

Form of New Warrant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.1

 

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

 

Yokneam Illit, Israel, August 6, 2025 (GLOBE NEWSWIRE)-- Wearable Devices Ltd. (the “Company” or “Wearable Devices”) (Nasdaq: WLDS, WLDSW), an award-winning pioneerin artificial intelligence (“AI”)-based wearable gesture control technology, today announced its entry into a warrant inducementagreement with an existing institutional investor of the Company for the immediate exercise of warrants to purchase up to 1,661,000 ofits ordinary shares (the “Existing Warrants”) at an exercise price of $1.45 per share for gross cash proceeds of approximately$2.4 million, before deducting fees and other transaction expenses. The Company intends to use the net proceeds from the warrant inducementtransaction for working capital and other general corporate purposes.

 

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

 

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

 

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

 

About Wearable Devices Ltd.

 

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

 

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

 

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

 

 

 

Forward-Looking Statements

 

This press release contains “forward-lookingstatements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities ExchangeAct of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements,which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by theuse of forward-looking terms such as “believe,” “expect,” “may,” “should,” “could,”“seek,” “intend,” “plan,” “goal,” “estimate,” “anticipate,” “will”or other comparable terms. For example, we are using forward-looking statements when we discuss the expected closing date of the warrantinducement transaction, including the closing of the private placement, the use of proceeds, the satisfaction of customary closing conditions,the issuance of the New Warrants, the timing of shareholder meeting and the filing of registration statement covering the New WarrantShares. All statements other than statements of historical facts included in this press release regarding our strategies, prospects, financialcondition, operations, costs, plans and objectives are forward-looking statements. Forward-looking statements are neither historical factsnor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding thefuture of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions.Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstancesthat are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materiallyfrom those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Importantfactors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statementsinclude, among others, the following: the trading of our ordinary shares or warrants and the development of a liquid trading market; ourability to successfully market our products and services; the acceptance of our products and services by customers; our continued abilityto pay operating costs and ability to meet demand for our products and services; the amount and nature of competition from other securityand telecom products and services; the effects of changes in the cybersecurity and telecom markets; our ability to successfully developnew products and services; our success establishing and maintaining collaborative, strategic alliance agreements, licensing and supplierarrangements; our ability to comply with applicable regulations; and the other risks and uncertainties described in our annual reporton Form 20-F for the year ended December 31, 2024, filed on March 20, 2025 and our other filings with the SEC, including the registrationstatement on Form F-1, as amended (File No. 333-284023). We undertake no obligation to publicly update any forward-looking statement,whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 

Investor Relations Contact

 

Michal Efraty
IR@wearabledevices.co.il