Wearable Devices Ltd.

Kurta Law is investigating broker recommendations of shares of Wearable Devices. Ltd. (NASDAQ: WLDS). These investments were high-risk and may have been unsuitable for many investors. Unsuitable investments violate FINRA Rule 2111, which requires brokers to consider their investor’s risk tolerance. Regulation Best Interest also requires brokers to exercise reasonable care and skill when they make recommendations.

If a broker recommended unsuitable investments to you, you may have a case for a securities lawyer. Call (877) 600-0098 or email info@kurtalawfir.com for a free case evaluation.

About Wearable Devices Ltd.

According to the prospectus, Wearable Devices Ltd. is a “growth company” developing a “non-invasive neural input interface in the form of a wrist wearable band for controlling digital devices using subtle finger movements.” Its products are targeted at the “immersive experiences” of the Metaverse.

The Offering

The prospectus dated September 12, 2022, announced that Wearable Devices Ltd. was offering 3,750,000 units, each consisting of one ordinary share and two warrants to purchase one ordinary share each. Each unit was $4.25.

As of April 19, 2024, Wearable Devices Ltd. stock trades for $0.48 per share.

Risks Associated with Wearable Devices Investments

The prospectus states, “An investment in our securities involves a high degree of risk.” The following are just some of the risks – see the prospectus for the full list.

Need to Introduce New Products and Services

Wearable Devices Ltd. disclosed that it must continually develop and introduce new products and services and improve and enhance existing products to maintain or increase its sales. Given the complexity of its products, Wearable Devices Ltd. could experience delays in completing the development of new products.

Risks of Cancellation

The period of time from a license agreement to implementation of technology is long and the company is subject to the risks of cancellation or postponement of the contract or unsuccessful implementation.

Limited Operating History

At the time of the prospectus, Wearable Devices Ltd. had a limited operating history and only a preliminary and unproven business plan. The business models may not generate sufficient revenue to support the business.

Consumer Preferences

Wearable Devices Ltd. depended on its ability to anticipate and promptly satisfy consumer preferences. These products are subject to changing consumer preferences that cannot be predicted with certainty.

Sole Sources of Supply

Key components used to manufacture Wearable Devices come from limited or sole sources of supply. Wearable Devices did not have any long-term arrangements with these suppliers. The company is therefore subject to the risk of shortages.

Aegis Capital Corp. Underwriting  

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Kurta Law Can Help

Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. If you have any questions, call (877) 600-0098 or email info@kurtalawfirm.com.