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What changed in DarioHealth Corp.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of DarioHealth Corp.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+735 added−391 removedSource: 10-K (2024-03-28) vs 10-K (2023-03-09)

Top changes in DarioHealth Corp.'s 2023 10-K

735 paragraphs added · 391 removed · 270 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

105 edited+326 added−39 removed131 unchanged
Biggest changeResults: ● A group of 1333 users was analyzed with demographic characteristics as follows: Nonrural 1157 (87%) and Rural 176 (13%). ● The blood glucose average mg/dl was significantly reduced (Friedman tests) in all users and in each rural/nonrural group over a year: Nonrural reduced by 17% from T 0 to T 12 (228±59 vs. 190±47) (P 0 to T 12 (224±60 vs. 196±51) (P ● No significant difference between Rural/Nonrural groups was found at first, 6 th and 12 th months periods (Kruskal-Wallis, P=0.235/0.163/0.142 respectively).
Biggest changeResults: ● A group of 1333 users was analyzed with demographic characteristics as follows: Nonrural 1157 (87%) and Rural 176 (13%). 25 Table of Contents ● The blood glucose average mg/dl was significantly reduced (Friedman tests) in all users and in each rural/nonrural group over a year: Nonrural reduced by 17% from T 0 to T 12 (228±59 vs. 190±47) (P 0 to T 12 (224±60 vs. 196±51) (P ● No significant difference between Rural/Nonrural groups was found at first, 6 th and 12 th months periods (Kruskal-Wallis, P=0.235/0.163/0.142 respectively). ​ In August 2022, we published in the first-time two retrospective data analysis on behavioral health outcomes, Depression and Anxiety in the American Psychology Association (APA). ​ Effectiveness of a Digital Behavioral Health Solution for Depression Symptoms This study provides preliminary insights into the effectiveness of a digital chronic condition platform to facilitate symptom reduction in individuals screened for depression. ● Methods: A retrospective data evaluation study was performed on the Dario database.
The study assessed the average blood glucose readings along a year of usage. The average of glucose readings was calculated per user in periods of 30 days intervals from 30-60 to 330-360 days and compared to the first 30 days as the starting point baseline of analysis.
The study assessed the average blood glucose readings along a year of usage. The average glucose readings was calculated per user in periods of 30 days intervals from 30-60 to 330-360 days and compared to the first 30 days as the starting point baseline of analysis.
This study showed reduction of 13% blood glucose average in age group ≥65 (N=298) at six months by 13% sustained for 12 months. and reduction of 38.1% in high readings ratio (>250 mg/dL) in the ≥65 age group at six months and by 41.5% at 12 months. ​ ​ In Feb 2021 we published in the first time in a peer-reviewed journal “ Journal of Medical Internet research (JMIR) Diabetes”, the article: ​ “Role of Digital Engagement in Diabetes Care Beyond Measurement: Retrospective Cohort Study” ​ This study sheds light on the source of the association between user engagement with a diabetes tracking app and the clinical condition, highlighting the importance of within-person changes versus between-person differences.
This study showed reduction of 13% blood glucose average in age group ≥65 (N=298) at six months sustained for 12 months, and reduction of 38.1% in high readings ratio (>250 mg/dL) in the ≥65 age group at six months and by 41.5% at 12 months. ​ ​ In Feb 2021 we published in the first time in a peer-reviewed journal “ Journal of Medical Internet research (JMIR) Diabetes”, the article: ​ “Role of Digital Engagement in Diabetes Care Beyond Measurement: Retrospective Cohort Study” ​ This study sheds light on the source of the association between user engagement with a diabetes tracking app and the clinical condition, highlighting the importance of within-person changes versus between-person differences.
We believe that our competitors are comparatively disadvantaged along several axes: ● Our competitors offer point solutions for a single condition (which model is unattractive to enterprise customers needing to manage multiple vendor relationships and who recognize that conditions frequently overlap in the same individual); ● Our competitors fail to share member-level data or granular reporting with partners, which prevents these partners from leveraging their own assets to support care; ● Competitor applications have limited or minimal levels of personalization, where communications (or “nudge”) from the application may be somewhat personalized, but actual user experiences are heavily templated, and not personalized or dynamic; ● Competitor applications are supported only by short term outcome data, as compared to our studies which cover a 2-year period and offer 8 years of direct-to-consumer data; ● Failure of any one of our competitors to successfully engage and retain a substantial portion of the base population, as few have the direct-to-consumer experience or data required, resulting in frustrated customers who cannot realize promised cost savings; ● Customers of our competitors suffer an inadequate user experience, as evidenced by few app store reviews and low scores in Apple, Google and Amazon stores; ● Our competitors offer medical device-oriented approaches with delayed product update cadences, rather than our more agile, software-driven approaches that push out new products every few weeks; 30 Table of Contents ● Our competitors have slowed their improvements in the area of clinical metrics (including, for example, blood pressure, HbA1c, and pain), which decreases the solution’s return on investment; ● Our competitors often utilize cumbersome form factors and alternative connected devices, which are not easily portable or that otherwise require significant user effort for connectivity.
We believe that our competitors are comparatively disadvantaged along several axes: ● Our competitors offer point solutions for a single condition (which model is unattractive to enterprise customers needing to manage multiple vendor relationships and who recognize that conditions frequently overlap in the same individual); ● Our competitors fail to share member-level data or granular reporting with partners, which prevents these partners from leveraging their own assets to support care; ● Competitor applications have limited or minimal levels of personalization, where communications (or “nudge”) from the application may be somewhat personalized, but actual user experiences are heavily templated, and not personalized or dynamic; ● Competitor applications are supported only by short term outcome data, as compared to our studies which cover a 2-year period and offer 8 years of direct-to-consumer data; ● Failure of any one of our competitors to successfully engage and retain a substantial portion of the base population, as few have the direct-to-consumer experience or data required, resulting in frustrated customers who cannot realize promised cost savings; ● Customers of our competitors suffer an inadequate user experience, as evidenced by few app store reviews and low scores in Apple, Google and Amazon stores; ● Our competitors offer medical device-oriented approaches with delayed product update cadences, rather than our more agile, software-driven approaches that push out new products every few weeks; ● Our competitors have slowed their improvements in the area of clinical metrics (including, for example, blood pressure, HbA1c, and pain), which decreases the solution’s return on investment; ● Our competitors often utilize cumbersome form factors and alternative connected devices, which are not easily portable or that otherwise require significant user effort for connectivity.
A subset of 237 engaged users who started with BMI of ≥35 kg/m 2 achieved weight loss of 5% over 12 months (p 180 mg/dL) reduced their weight by 4.9%, average blood glucose by 16.1% and high readings ratio by 38% over 12 months (p In June 2022, three retrospective data analysis studies were presented in ADA: Persons with high-risk diabetes, depression and stress using a Digital health platform experience improvement in glycemic management The use of a multi-condition digital therapeutic platform may be associated with improved glucose management for persons with “high risk” glycemia who cope with depression and stress.
A subset of 237 engaged users who started with BMI of ≥35 kg/m 2 achieved weight loss of 5% over 12 months (p 180 mg/dL) reduced their weight by 4.9%, average blood glucose by 16.1% and high readings ratio by 38% over 12 months (p ​ In June 2022, three retrospective data analysis studies were presented in 82 th ADA: Persons with high-risk diabetes, depression and stress using a Digital health platform experience improvement in glycemic management The use of a multi-condition digital therapeutic platform may be associated with improved glucose management for persons with “high risk” glycemia who cope with depression and stress.
Dario is actively pursuing new partnerships in both markets in 2023 to enhance our opportunities with a one-to-many approach. ​ Consumers : Our ability to engage members and improve health begins with our consumer-centric approach, and this audience remains key to our commercialization at the enterprise client level.
Dario is actively pursuing new partnerships in both markets to enhance our opportunities with a one-to-many approach. ​ Consumers : Our ability to engage members and improve health begins with our consumer-centric approach, and this audience remains key to our commercialization at the enterprise client level.
Moreover, the ratio of severe hyperglycemia events (>400 mg/dL) was decreased in 57.8% (from 0.90% to 0.38% of the entire measurements) at the same period. ​ 12 Table of Contents Continuous Reduction of Blood Glucose Average during One Year of Glucose Monitoring Using Dario Digital Monitoring System in a High-Risk Population ● Reduction of 14% Blood Glucose average was observed in T2D within 12 months ● 76% of the population showed 24% improvement in Blood glucose average within 12 months Methods : An exploratory data analysis study reviewed a population of high-risk active type 2 Diabetic users with initial 30 days glucose average above 180 mg/dL during a full calendar year.
Moreover, the 15 Table of Contents ratio of severe hyperglycemia events (>400 mg/dL) was decreased in 57.8% (from 0.90% to 0.38% of the entire measurements) at the same period. ​ Continuous Reduction of Blood Glucose Average during One Year of Glucose Monitoring Using Dario Digital Monitoring System in a High-Risk Population ● The study presented a reduction of 14% Blood Glucose average was observed in T2D within 12 months ● 76% of the population showed 24% improvement in Blood glucose average within 12 months Methods : An exploratory data analysis study reviewed a population of high-risk active type 2 Diabetic users with initial 30 days glucose average above 180 mg/dL during a full calendar year.
The ratio of in-range (70-140 mg/dL) readings was increased following 3 months in correlation to the level of tagging meal reference/carbs/physical activity occurrences (4.0%, 9.1% and 11.9% for tagging 0-1, 1-2 and >2 times per day on average, respectively) and sustained for 6 months ​ Reduction of Blood Glucose Average Less than 140mg/dL in People with Type2 Diabetes Using Dario Digital Diabetes Management System 30-40% of T2D Dario users experienced Reduction of Blood Glucose Average below 140 mg/dL Method: A retrospective data evaluation study was performed on the Dario TM cloud database.
The ratio of in-range (70-140 mg/dL) readings was increased following 3 months in correlation to the level of tagging meal reference/carbs/physical activity occurrences (4.0%, 9.1% and 11.9% for tagging 0-1, 1-2 and >2 times per day on average, respectively) and sustained for 6 months. ​ Reduction of Blood Glucose Average Less than 140mg/dL in People with Type2 Diabetes Using Dario Digital Diabetes Management System 30-40% of T2D Dario users experienced Reduction of Blood Glucose Average below 140 mg/dL Methods: A retrospective data evaluation study was performed on the Dario TM cloud database.
Updated Analysis combining 2017 and 2018 data totals 38,838 Type 2 Diabetes active users and 3,318,014 measurements show 14.3% decrease in high readings (180-400 mg/dL) and 9.2 % increase in In-range (80-120 mg/dL) readings ​ A decrease in High Readings and Severe Hyperglycemic Events for People with T2D over the Full Year of 2017 in Users Monitoring with Dario Digital Diabetes Management System ● Reduction of 20% of High events (180-400 mg/dL) in T2D sustained within 12 months ● Reduction of 58% of Hyper events (>400mg/dL) in T2D within 12 months Method: A retrospective data evaluation study was performed on the Dario TM cloud database.
Updated Analysis combining 2017 and 2018 data totals 38,838 Type 2 Diabetes active users and 3,318,014 measurements show 14.3% decrease in high readings (180-400 mg/dL) and 9.2 % increase in In-range (80-120 mg/dL) readings. ​ A decrease in High Readings and Severe Hyperglycemic Events for People with T2D over the Full Year of 2017 in Users Monitoring with Dario Digital Diabetes Management System ● Reduction of 20% of High events (180-400 mg/dL) in T2D sustained within 12 months ● Reduction of 58% of Hyper events (>400mg/dL) in T2D within 12 months Methods: A retrospective data evaluation study was performed on the Dario TM cloud database.
The ratio of measurements logged with context (fasting, pre-meal, post-meal, bedtime) was increased significantly by 56% in the first month following product modification on average (51.3%. vs. 32.8%) (P ​ Users with high-risk type 2 diabetes using a digital therapeutic platform experience a change in blood glucose levels ​ Digital diabetes platform has the potential to enhance self-care behaviors across socioeconomic statuses and among different language speakers. ​ Method : A retrospective data evaluation study was performed on the Dario TM data base.
The ratio of measurements logged with context (fasting, pre-meal, post-meal, bedtime) was increased significantly by 56% in the first month following product modification on average (51.3%. vs. 32.8%) (P ​ Users with high-risk type 2 diabetes using a digital therapeutic platform experience a change in blood glucose levels ​ Digital diabetes platform has the potential to enhance self-care behaviors across socioeconomic statuses and among different language speakers. ​ Methods : A retrospective data evaluation study was performed on the Dario TM data base.
Results : ● For the 2554 users with diabetes and hypertension stage 1 and above, more than two thirds improved their systolic blood pressure by 13 mmHg (P Additionally, a group of 38.7% (N=990) moved to a lower hypertensive stage (P ● The subset of 1367 users with stage 2 hypertension improved their systolic blood pressure from 150±12.4 to 141±15.2 mmHg on average and 43.9% (N=600) improved their blood pressure by more than 10 mmHg over six months (P ● The subgroup of 306 users who started at high-risk blood glucose levels significantly reduced their blood glucose average by 15% over 6 months (232.4±46 to 198±65 mg/dL) (P ​ Blood Glucose Levels in High-Risk Type 2 Diabetes Users of a Digital Therapeutic Platform by Race/Ethnicity ​ Digital therapeutic platforms may promote behavior modification in high-risk patients with type 2 diabetes to create sustainable outcomes and allow the users to become more active participants in their chronic condition.
Results : For the 2554 users with diabetes and hypertension stage 1 and above, more than two thirds improved their systolic blood pressure by 13 mmHg (P Additionally, a group of 38.7% (N=990) moved to a lower hypertensive stage (P 24 Table of Contents The subset of 1367 users with stage 2 hypertension improved their systolic blood pressure from 150±12.4 to 141±15.2 mmHg on average and 43.9% (N=600) improved their blood pressure by more than 10 mmHg over six months (P The subgroup of 306 users who started at high-risk blood glucose levels significantly reduced their blood glucose average by 15% over 6 months (232.4±46 to 198±65 mg/dL) (P ​ Blood Glucose Levels in High-Risk Type 2 Diabetes Users of a Digital Therapeutic Platform by Race/Ethnicity ​ Digital therapeutic platforms may promote behavior modification in high-risk patients with type 2 diabetes to create sustainable outcomes and allow the users to become more active participants in their chronic condition.
The recent integration of Dexcom CGM data into our platform is one example of the utility of our open-platform, positioning us as an attractive choice for clients and partners interested in building towards the future state of digital health. 7 Table of Contents ​ Clinical Outcomes ​ We believe that we lead the digital therapeutic market in published outcomes with 38 studies across our suite of solutions, including the first clinical research demonstrating the positive impact of managing multiple chronic conditions with one digital health solution.
The recent integration of Dexcom CGM data into our platform is one example of the utility of our open-platform, positioning us as an attractive choice for clients and partners interested in building towards the future state of digital health. 9 Table of Contents ​ Clinical Outcomes ​ We believe that we lead the digital therapeutic market in published outcomes with 38 studies across our suite of solutions, including the first clinical research demonstrating the positive impact of managing multiple chronic conditions with one digital health solution.
GM avg was reduced by 8% and 12% from baseline through 3 and 6 months, respectively (201.1±25.57, 192.8±54.3 vs. 219.5±38.5) while patient’s hypoglycemic event ( ​ T2D Users of Dario Digital Diabetes Management System Experience an Increase of in-range Glucose Levels Linked to App Engagement Relative Increase of 10 % In-range linked to App engagement Method : A retrospective data evaluation study was performed on the Dario TM cloud database.
GM avg was reduced by 8% and 12% from baseline through 3 and 6 months, respectively (201.1±25.57, 192.8±54.3 vs. 219.5±38.5) while patient’s hypoglycemic event ( ​ T2D Users of Dario Digital Diabetes Management System Experience an Increase of in-range Glucose Levels Linked to App Engagement Relative Increase of 10 % In-range linked to App engagement Methods : A retrospective data evaluation study was performed on the Dario TM cloud database.
In addition to a better unified member experience, our partners deploying Dario One enjoy several benefits from purchasing the entire suite of solutions: better overall health as evidenced by recent research published by us; the convenience and ease of a single vendor to manage; less strain on internal resources spread across several chronic condition management programs; and a more affordable program launches due to lower costs of implementation. ​ Dario’s Solution Main Components Users vary significantly in their interests and preferences, and unique user preferences also vary over time with respect to the optimal timing, tone, content, channel, frequency, and interventions required to produce sustained behavior 8 Table of Contents change.
In addition to a better unified member experience, our partners deploying Dario One enjoy several benefits from purchasing the entire suite of solutions: better overall health as evidenced by recent research published by us; the convenience and ease of a single vendor to manage; less strain on internal resources spread across several chronic condition management programs; and a more affordable program launches due to lower costs of implementation. ​ Dario’s Solution Main Components Users vary significantly in their interests and preferences, and unique user preferences also vary over time with respect to the optimal timing, tone, content, channel, frequency, and interventions required to produce sustained behavior change.
The system assists users through a variety of mechanisms including behavior modification in diabetes self-management and in long-term routines for self-care. ​ Method : A retrospective study of high-risk users (BG avg >180 mg/dL equivalent to e A1c 8.0) 2 with type 2 diabetes that measured their blood glucose using the Dario® platform database over two consecutive years was performed.
The system assists users through a variety of mechanisms including behavior modification in diabetes self-management and in long-term routines for self-care. ​ Methods : A retrospective study of high-risk users (BG avg >180 mg/dL equivalent to e A1c 8.0) 2 with type 2 diabetes that measured their blood glucose using the Dario® platform database over two consecutive years was performed.
While several in-market solutions now integrate health signals across a range of categories to apply limited, nominal personalization, primarily in the form of nudges, our solution is informed by years of user experience data from over 250,000 users that joined our chronic-condition platform, enabling us to continually personalize and adapt user journeys themselves (and not just messages) over time.
While several in-market solutions now integrate health signals across a range of categories to apply limited, nominal personalization, primarily in the form of nudges, our solution is informed by years of user experience data from over 142,000 users that joined our chronic-condition platform, enabling us to continually personalize and adapt user journeys themselves (and not just messages) over time.
Average blood glucose was significantly reduced in all users and per ethnic group over a year: All users by 14% (230±58 vs. 197±47) (p ● No difference between the groups was found at 12th month(P=0.751). In August 2022 were presented a retrospective data analysis study in the ADCES. Digital therapeutic platforms improve blood glucose management across rural/nonrural groups.
Average blood glucose was significantly reduced in all users and per ethnic group over a year: All users by 14% (230±58 vs. 197±47) (p No difference between the groups was found at 12th month(P=0.751). ​ In August 2022, we presented a retrospective data analysis study in the ADCES. Digital therapeutic platforms improve blood glucose management across rural/nonrural groups.
Our findings also underscore the need and provide a basis for a comprehensive approach to understanding the mechanism of BP regulation associated with BG. Method : In this retrospective, real-world case-control study, we extracted the data of 269 people with type 2 diabetes (T2D) who tracked their BG levels using the Dario digital platform for a chronic condition.
Our findings also underscore the need and provide a basis for a comprehensive approach to understanding the mechanism of BP regulation associated with BG. Methods : In this retrospective, real-world case-control study, we extracted the data of 269 people with type 2 diabetes (T2D) who tracked their BG levels using the Dario digital platform for a chronic condition.
Type 2 Diabetes Users of Dario Digital Diabetes Management System Experience a Shift from Greater than 180 mg/dL to Normal Glucose Levels with Sustainable Results ● Reduction of 19.3% in high glucose readings within 12 months ● Increase of 11.3% in in-range readings within 12 months Method : A retrospective data evaluation study was performed on the Dario TM cloud database.
Type 2 Diabetes Users of Dario Digital Diabetes Management System Experience a Shift from Greater than 180 mg/dL to Normal Glucose Levels with Sustainable Results ● Reduction of 19.3% in high glucose readings within 12 months ● Increase of 11.3% in in-range readings within 12 months Methods : A retrospective data evaluation study was performed on the Dario TM cloud database.
See “Clinical Trials” above for clinical trials performed to date. 25 Table of Contents Post-Clearance Matters Even if the FDA or other non-US regulatory authorities approve or clear a device, they may limit its intended uses in such a way that manufacturing and distributing the device may not be commercially feasible.
See “Clinical Trials” above for clinical trials performed to date. 42 Table of Contents Post-Clearance Matters Even if the FDA or other non-US regulatory authorities approve or clear a device, they may limit its intended uses in such a way that manufacturing and distributing the device may not be commercially feasible.
When assessed alongside within-person effects, between-person changes in tagging behavior were not associated with changes in monthly average glucose levels ( t =1.30, P =.20). ​ ​ In February 2021, we also presented two studies virtually in ATTD. ​ Impact of a Digital Intervention Engine on Diabetes Self-management A digital diabetes platform has the potential to consistently interact with users, improve self-management and sustain among users who had not recently measured their blood glucose. ​ Method : A retrospective study was performed on a population of 246 Dario active members who had not measured blood glucose for a 7-day period. 127 of these users were randomly assigned to a Test group and experienced a digital intervention flow, and the remaining 119 users were assigned to a Control group. ​ Results : Digital engagement levels were observed following 60 days in both groups.
When assessed alongside within-person effects, between-person changes in tagging behavior were not associated with changes in monthly average glucose levels ( t =1.30, P =.20). ​ ​ 20 Table of Contents In February 2021, we also presented two studies virtually in ATTD. ​ Impact of a Digital Intervention Engine on Diabetes Self-management A digital diabetes platform has the potential to consistently interact with users, improve self-management and sustain among users who had not recently measured their blood glucose. ​ Methods : A retrospective study was performed on a population of 246 Dario active members who had not measured blood glucose for a 7-day period. 127 of these users were randomly assigned to a Test group and experienced a digital intervention flow, and the remaining 119 users were assigned to a Control group. ​ Results : Digital engagement levels were observed following 60 days in both groups.
Method: A retrospective data evaluation study was performed on a population of 3,609 users who experienced a cluster event of frequent high blood glucose levels above 250 mg/dL (>=4 times in 4 different days along 7 days) and measured with Dario at least one month before and after the event during 2021.
Methods: A retrospective data evaluation study was performed on a population of 3,609 users who experienced a cluster event of frequent high blood glucose levels above 250 mg/dL (>=4 times in 4 different days along 7 days) and measured with Dario at least one month before and after the event during 2021.
Our ability to use large, real-world, longitudinal data-sets gives us a natural advantage in the scope and type of studies that can be conducted compared to competitors. ​ This capability enables one of the unique elements of our partnership with Sanofi, allowing our data to be consumed by a third party for independent analysis and eventual publication in a study in mid-2023. ​ Our Product Offering Our user-centric software platform integrates digital therapeutics, coaching, professional human support and medical devices to drive superior clinical and financial outcomes.
Our ability to use large, real-world, longitudinal data-sets gives us a natural advantage in the scope and type of studies that can be conducted compared to competitors. ​ This capability enables one of the unique elements of our partnership with Sanofi, allowing our data to be consumed by a third party for independent analysis and eventual publication. ​ Our Product Offering Our user-centric software platform integrates digital therapeutics, coaching, professional human support and medical devices to drive superior clinical and financial outcomes.
Results: A group of 345 active users started at baseline with Hypertension stage 1, 2 or hypertensive crisis levels and measured following 3 months was evaluated. ● Blood pressure: o Normal levels increased from 6% to 12% and percentage of users with hypertension stage 2 decreased from 53% to 45% o 70% of the users (243 out of 345) improved their blood pressure levels in 8.4 mmHg Systolic and 6.2 mmHg on average (Systolic 134.2±12 vs.142.6±14; Diastolic 89.9 ±11 vs.83.7 ±8.7) ● Blood Glucose: o A group of 345 users measured with Dario their blood glucose in addition to blood pressure, 89% are type 2 and pre-diabetes - average age is 60.4. o For the group of 345 users a reduction of 33% (5.4% vs.8.0%) in high readings ratio (>250 mg/dL) and 67% (0.3%vs.0.9%) in severe events ratio (>400 mg/dL) was observed following six months on average.
Results: A group of 345 active users started at baseline with Hypertension stage 1, 2 or hypertensive crisis levels and measured following 3 months was evaluated. ● Blood pressure outcomes: o Normal levels increased from 6% to 12% and percentage of users with hypertension stage 2 decreased from 53% to 45% o 70% of the users (243 out of 345) improved their blood pressure levels in 8.4 mmHg Systolic and 6.2 mmHg on average (Systolic 134.2±12 vs.142.6±14; Diastolic 89.9 ±11 vs.83.7 ±8.7) ● Blood Glucose outcomes: 19 Table of Contents o A group of 345 users measured with Dario their blood glucose in addition to blood pressure, 89% are type 2 and pre-diabetes - average age is 60.4. o For the group of 345 users a reduction of 33% (5.4% vs.8.0%) in high readings ratio (>250 mg/dL) and 67% (0.3%vs.0.9%) in severe events ratio (>400 mg/dL) was observed following six months on average.
Based on the findings of our mediation model constructed on a lagged association between training duration, perceived posture quality, and pain levels, we suggest that posture quality is a potential mechanism for posture training-related analgesia. Method: A retrospective real-world study examined 981 users who used the Dario posture trainer.
Based on the findings of our mediation model constructed on a lagged association between training duration, perceived posture quality, and pain levels, we suggest that posture quality is a potential mechanism for posture training-related analgesia. Methods: A retrospective real-world study examined 981 users who used the Dario posture trainer.
Our findings underscore the need for and provide a basis for a personalized approach to digital health. ​ Method : This retrospective real-world analysis followed 998 people with type 2 diabetes who regularly tracked their blood glucose levels with the Dario digital therapeutics platform for chronic diseases.
Our findings underscore the need for and provide a basis for a personalized approach to digital health. ​ Methods : This retrospective real-world analysis followed 998 people with type 2 diabetes who regularly tracked their blood glucose levels with the Dario digital therapeutics platform for chronic diseases.
Method : A retrospective data evaluation study was performed on the Dario TM cloud database. A population of high-risk (with baseline A1C > 7.5 percent), active users that continuously measured their blood glucose using Dario TM BGMS during a full year was evaluated.
Methods : A retrospective data evaluation study was performed on the Dario TM cloud database. A population of high-risk (with baseline A1C > 7.5 percent), active users that continuously measured their blood glucose using Dario TM BGMS during a full year was evaluated.
The presented data shows the Dario digital therapeutics platform successfully assists insulin dependent patients with diabetes in reducing hypoglycemic events. ​ Decrease in Hypoglycemia Events Over Two Years in Patients Monitoring with Dario’s Digital Diabetes Management System Method : A retrospective data analysis was performed on the Dario real-world database.
The presented data shows the Dario digital therapeutics platform successfully assists insulin dependent patients with diabetes in reducing hypoglycemic events. ​ Decrease in Hypoglycemia Events Over Two Years in Patients Monitoring with Dario’s Digital Diabetes Management System Methods : A retrospective data analysis was performed on the Dario real-world database.
This enables our service-oriented business model by delivering the engagement our clients demand and yields a stable form of revenue through an Annual Recurring Revenue (“ARR”) model. ​ 6 Table of Contents Longer term, as the market for digital health solutions faces economic pressures, we believe our consumer origins arm has several natural advantages that will help propel our growth and cement our leadership position.
This enables our service-oriented business model by delivering the engagement our clients demand and yields a stable form of revenue through an Annual Recurring Revenue (“ARR”) model. ​ Longer term, as the market for digital health solutions faces economic pressures, we believe our consumer origins arm has several natural advantages that will help propel our growth and cement our leadership position.
Today, we have approximately 80 employer populations actively on our platform, and growth of our employer pipeline continues to grow and mature. ​ Partnerships: Strategic partnerships play a key role in helping to expand our reach across markets quickly and efficiently.
Today, we have approximately 120 employer populations actively on our platform, and growth of our employer pipeline continues to grow and mature. ​ Partnerships: Strategic partnerships play a key role in helping to expand our reach across markets quickly and efficiently.
A population of T2D high-risk patients (blood glucose measurements average (GM avg ) >180 mg/dL) measuring more than 20 times in the first 13 Table of Contents 30 days (analysis baseline) was evaluated on days 60-90 (3 months) and 150-180 days (6 months). Standard deviation (SD) and GM avg were calculated and compared to the baseline.
A population of T2D high-risk patients (blood glucose measurements average (GM avg ) >180 mg/dL) measuring more than 20 times in the first 30 days (analysis baseline) was evaluated on days 60-90 (3 months) and 150-180 days (6 months). Standard deviation (SD) and GM avg were calculated and compared to the baseline.
Design Applications have been filed and granted covering the glucose meter, the cartridge, and connection dongle. At least some of these applications were granted and registered in the United States, as well as Brazil, Canada, China, Europe, and Hong Kong.
Design Applications have been filed and granted covering the glucose meter, the cartridge, and connection dongle. At least some of these applications were granted and registered in the United States, as well as, Canada, Europe, and Hong Kong.
Commercial digital health solutions currently perform poorly in this area, which leads to low engagement and weak outcomes. ​ As we expand our commercial business, we believe our consumer-centric solutions position us as a leader in digital health through a best-of-suite platform proven to deliver the experience people are demanding.
Commercial digital health solutions currently perform poorly in this area, which leads to low engagement and weak outcomes. ​ 8 Table of Contents As we expand our commercial business, we believe our consumer-centric solutions position us as a leader in digital health through a best-of-suite platform proven to deliver the experience people are demanding.
Patients using an integrated chronic disease management digital platform have the potential to improve user activation which may assist to better manage their blood glucose and blood pressure levels and sustain behavioral change. Impact of Digital Management on Clinical Outcome in Patients with Chronic Conditions: Diabetes and Hypertension.
Patients using an integrated chronic disease management digital platform have the potential to improve user activation which may assist to better manage their blood glucose and blood pressure levels and sustain behavioral change. ​ Impact of Digital Management on Clinical Outcome in Patients with Chronic Conditions: diabetes and hypertension. The study presented Hypertension and Diabetes clinical outcomes.
Digital engagement and clinical outcomes were measured on first to six months per each period to examine if habit formation was achieved. ​ 18 Table of Contents Results : A group of total 9794 users who had enrolled in a membership for 6 months or longer was evaluated. The digital engagement was improved.
Digital engagement and clinical outcomes were measured on first to six months per each period to examine if habit formation was achieved. ​ Results : A group of total 9794 users who had enrolled in a membership for 6 months or longer was evaluated. The digital engagement was improved.
European and Non-European Regulation Generally Sales of medical devices outside the United States are subject to foreign regulatory requirements that vary widely from country to country. These laws and regulations range from simple product registration requirements in some countries to complex clearance and production controls in others.
European and Non-European Regulation Generally Sales of medical devices outside the United States are subject to foreign regulatory requirements that vary widely from country to country. These laws and regulations range from simple product registration requirements in some countries 39 Table of Contents to complex clearance and production controls in others.
Our consumer-centric platform, the rate at which we have evolved our product, added and integrated solutions and provided product improvements and ability to easily share data and support a multitude of integrations makes Dario 10 Table of Contents an attractive choice of partner for many in the market.
Our consumer-centric platform, the rate at which we have evolved our product, added and integrated solutions and provided product improvements and ability to easily share data and support a multitude of integrations makes Dario an attractive choice of partner for many in the market.
The study revealed that the digital diabetes platform has the potential to enhance self-care behaviors across diverse populations. Method: A retrospective data study was performed on the Dario database.
The study revealed that the digital diabetes platform has the potential to enhance self-care behaviors across diverse populations. Methods: A retrospective data study was performed on the Dario database.
We continue to achieve key benchmarks as we rapidly scale our B2B2C model, including more than 100 total signed contracts as of today and the shift in our commercial pipeline where more 5 Table of Contents than 50% of the contracts signed in the second half of 2022 are for multi-chronic solutions.
We continue to achieve key benchmarks as we rapidly scale our B2B2C model, including more than 100 total signed contracts as of today and the shift in our commercial pipeline where more than 50% of the contracts signed in the second half of 2022 are for multi-chronic solutions.
Efficacy of a tailored digital intervention tool targeting patients with clustered recurrent high glucose readings The potential benefit of implementing a real-time digital diabetes intervention journey to recognize episodes of high blood glucose measurement clusters and assist patients in improving self-management and clinical outcomes.
Efficacy of a tailored digital intervention tool targeting patients with clustered recurrent high glucose readings 22 Table of Contents The potential benefit of implementing a real-time digital diabetes intervention journey to recognize episodes of high blood glucose measurement clusters and assist patients in improving self-management and clinical outcomes.
In the Test group, the percent of users who measured blood glucose was significantly higher (P 17 Table of Contents ​ ​ Impact of a Digital Therapeutic on Insulin Self-Management​ The potential benefit of a digital diabetes management platform in the self-management required from insulin treated users, incorporating its use on a daily base, and sustaining behavioral change. ​ Method : A retrospective study was performed on a population of 285 active Dario users (85% with type 2) under insulin therapy, that measured with Dario for at least three months and logged basal insulin usage.
In the Test group, the percent of users who measured blood glucose was significantly higher (P ​ Impact of a Digital Therapeutic on Insulin Self-Management​ The potential benefit of a digital diabetes management platform in the self-management required from insulin treated users, incorporating its use on a daily base, and sustaining behavioral change. ​ Methods : A retrospective study was performed on a population of 285 active Dario users (85% with type 2) under insulin therapy, that measured with Dario for at least three months and logged basal insulin usage.
These were evaluated for the blood glucose average (BGavg), estimated A1c (eA1c)values and glycemic variability (by Standard Deviation; SD) following 24 months compared to the first month (baseline). Results : 368 high-risk, T2D active and engaged users for at least consecutive 2 years were identified and assessed for their risk-level and insulin usage.
These were evaluated for the blood glucose average (BGavg), estimated A1c (eA1c) values and glycemic variability (by Standard Deviation; SD) following 24 months compared to the first month (baseline). 18 Table of Contents Results : 368 high-risk, T2D active and engaged users for at least consecutive 2 years were identified and assessed for their risk-level and insulin usage.
The study demonstrates an improvement in multiple chronic conditions (diabetes and hypertension) for people using one digital platform. Method : A retrospective data evaluation was performed on the Dario data base. A population of active users who started with hypertension stage 1 (Systolic ≥130 mmHg or Diastolic ≥ 80mmHg) as their baseline since 2019 was identified.
The study demonstrates an improvement in multiple chronic conditions (diabetes and hypertension) for people using one digital platform. Methods : A retrospective data evaluation was performed on the Dario database. A population of active users who started with hypertension stage 1 (Systolic ≥130 mmHg or Diastolic ≥ 80mmHg) as their baseline since 2019 was identified.
Participants who took at least 5 measurements 20 Table of Contents during their 1 st and 12 th months with Dario and who started with an average blood glucose >180 mg/dL were termed “high-risk”. A statistical analysis (T-test) was used to evaluate the differences in average blood glucose and high blood glucose (>180 mg/dL) readings ratio over a year.
Participants who took at least 5 measurements during their 1 st and 12 th months with Dario and who started with an average blood glucose >180 mg/dL were termed “high-risk”. A statistical analysis (T-test) was used to evaluate the differences in average blood glucose and high blood glucose (>180 mg/dL) readings ratio over a year.
Clinical outcomes and self reported data before and after intervention were compared ​ Results : ● Significant reduction in lab values such as HbA1c (2 points), Fasting Blood Glucose (18%) and Body Mass Index (BMI) (10%)​ ● Statistically significant improvement in glucose variability (21%)​ ● Significant improvement in self-reported evaluation in weight and glucose control satisfaction​ ● Weekly engagement with CDCES predicted reduction of participants’ GV during the following week ​ In June 2021, two studies were presented in ADA: ​ Impact of Digital Intervention Tools on Engagement and Glycemic Outcomes ​ Product updates to digital platforms that guide on healthy eating and help users understand their glucose readings in context may assist users in improving the management of their diabetes. ​ Method : A retrospective data evaluation study was performed on Dario TM members during the time before and after product modification.
Results : 21 Table of Contents ● Significant reduction in lab values such as HbA1C (2 points), Fasting Blood Glucose (18%) and Body Mass Index (BMI) (10%)​ ● Statistically significant improvement in glucose variability (21%)​ ● Significant improvement in self-reported evaluation in weight and glucose control satisfaction​ ● Weekly engagement with CDCES predicted reduction of participants’ GV during the following week ​ In June 2021, two studies were presented in 81 th ADA: ​ ​ Impact of Digital Intervention Tools on Engagement and Glycemic Outcomes ​ Product updates to digital platforms that guide on healthy eating and help users understand their glucose readings in context may assist users in improving the management of their diabetes. ​ Methods : A retrospective data evaluation study was performed on Dario TM members during the time before and after product modification.
The moderate-severe group significantly improved their average PHQ-9 score (P 22 Table of Contents ● A proportion of 72% of moderate-severe users showed improvement in their post PHQ-9 assessment and 38% of moderate-severe users reported scores in the minimal-mild range over the study period.
The moderate-severe group significantly improved their average PHQ-9 score (P ● A proportion of 72% of moderate-severe users showed improvement in their post PHQ-9 assessment and 38% of moderate-severe users reported scores in the minimal-mild range over the study period.
A significant difference was observed after the digital journey versus before the digital journey in the following month’s change in high readings ratio (-8% vs. +5%; P-value 19 Table of Contents ​ In February 2022, another article was published in “ Journal of Medical Internet research (JMIR)” “Blood Pressure Monitoring as a Digital Health Tool for Improving Diabetes Clinical Outcomes: Retrospective Real-world Study​” ​ The results of this study shed light on the association between BG and BP levels and on the role of BP self-monitoring in diabetes management.
A significant difference was observed after the digital journey versus before the digital journey in the following month’s change in high readings ratio (-8% vs. +5%; P-value ​ In February 2022, another manuscript was published in “ Journal of Medical Internet research (JMIR)” “Blood Pressure Monitoring as a Digital Health Tool for Improving Diabetes Clinical Outcomes: Retrospective Real-world Study” ​ The results of this study shed light on the association between BG and BP levels and on the role of BP self-monitoring in diabetes management.
The multi-year, $30 million-dollar agreement, is helping to accelerate commercial adoption of our full suite of digital therapeutics through the promotion of our solutions in Sanofi’s sales channels and the collaborative development of new products.
The multi-year, $30 million-dollar agreement, is 12 Table of Contents helping to accelerate commercial adoption of our full suite of digital therapeutics through the promotion of our solutions in Sanofi’s sales channels and the collaborative development of new products.
In particular, the “Dario” wordmark is registered as a trademark in the Australia, Canada, China, Costa Rica, United States, Israel, China, Canada, Hong Kong, South Africa, Japan, Costa Rica, Europe, Israel, Japan, Korea, Mexico, New Zealand, Panama, Russia, South Africa, and the USA.
In particular, the “Dario” wordmark is registered as a trademark in Australia, Canada, China, Costa Rica, United States, Israel, Hong Kong, South Africa, Japan, Costa Rica, Europe, Israel, Korea, Mexico, New Zealand, Panama and Russia. The “DARIOHEALTH” wordmark is registered as a trademark in the United States, Canada, China and India.
If these rules are determined to be applicable to us and if we were found to be noncompliant, we could lose our licensure in that state, which could prohibit us from selling our current or future products to patients in that state.
If these rules are determined to be applicable to us and if we were found to be noncompliant, we could lose our licensure in that state, which could prohibit us from selling our current or future products to patients in that state. Other U.S.
A group of 31% (387) achieved BG avg of Subgroup analyses of 568 non-insulin users revealed that 40% (226) achieved a BG avg In August 2019 another study was presented at the AADE 2019 in Atlanta.
A group of 31% (387) achieved BG avg of 17 Table of Contents Subgroup analyses of 568 non-insulin users revealed that 40% (226) achieved a BG avg ​ In August 2019 another study was presented at the AADE 2019 in Atlanta.
Insulin dependent of users with type 1 or type 2 diabetes population was evaluated for two year of continuous system use.
Insulin dependent of users with type 1 or type 2 diabetes population was evaluated for two years of continuous system use.
The group included 112 users whose starting average blood glucose >180 mg/dL. Among this group the average age was 55. The group also included 173 users whose starting average blood glucose was ​ Results : In the sub-group of 112 users the average amount of basal insulin increased by six units after three months (45 vs.39).
The group included 112 users whose starting average blood glucose >180 mg/dL. Among this group the average age was 50±20.8. The group also included 173 users whose starting average blood glucose was ​ Results : In the sub-group of 112 users the average amount of basal insulin increased by six units after three months (45 vs.39).
Results: Posture biofeedback training duration was significantly associated with pain levels (B=-0.0002, p In December 2022, a first manuscript was published in a peer-reviewed journal on retrospective data analysis on UpRight posture biofeedback platform. 23 Table of Contents The two-stage therapeutic effect of posture biofeedback training on back pain and the associated mechanism: A retrospective cohort study The study findings provided a better understanding of the therapeutic dynamic during digital biofeedback intervention targeting pain, modeling the associated two-stage process.
Results: Posture biofeedback training duration was significantly associated with pain levels (B=-0.0002, p In December 2022, the first manuscript was published in a peer-reviewed journal “ Frontiers in Physiology ” on retrospective data analysis on UpRight posture biofeedback platform. ​ The two-stage therapeutic effect of posture biofeedback training on back pain and the associated mechanism: A retrospective cohort study The study findings provided a better understanding of the therapeutic dynamic during digital biofeedback intervention targeting pain, modeling the associated two-stage process.
Users’ interactions with devices, smartphones, coaches, providers, and third-party solutions must be personalized along these axes to ensure optimal engagement, retention, and outcomes. Furthermore, to engage and sustain user interest and participation, and drive outcomes, platforms must be dynamically responsive.
Users’ interactions with devices, smartphones, coaches, providers, and third-party solutions must be personalized 10 Table of Contents along these axes to ensure optimal engagement, retention, and outcomes. Furthermore, to engage and sustain user interest and participation, and drive outcomes, platforms must be dynamically responsive.
Dario Move guides members through their tailored program with educational content to support long-term outcomes. ​ Dario Elevate ​ 9 Table of Contents Dario’s Elevate helps people get the help they need to address common mental health needs.
Dario Move guides members through their tailored program with educational content to support long-term outcomes. ​ Dario Elevate ​ Dario’s Elevate helps people get the help they need to address common mental health needs.
Results : For 9,200 users with T2D, non-Insulin users, the average ratio of high glycemia events (180-400 mg/dL) from entire set of measurements was reduced by 26% (18.62% vs. 23.43%) while readings of >250mg/dL were reduced by 33% (4.65% vs. 6.93%) over a year.
High blood glucose readings (180-400 mg/dL, >250 mg/dL), fasting readings ( th month. Results : For 9,200 users with T2D, non-Insulin users, the average ratio of high glycemia events (180-400 mg/dL) from entire set of measurements was reduced by 26% (18.62% vs. 23.43%) while readings of >250mg/dL were reduced by 33% (4.65% vs. 6.93%) over a year.
Substantial reductions were observed for higher risk groups (insulin and non-insulin treated). The subset that started with average BG levels > 212 mg/dL (eA1c >9.0) and average BG levels >240 mg/dL (eA1c>10) reduced their average BG by 22.5% and 25.7% respectively on average over two years.
Substantial reductions were observed for higher risk groups (insulin and non-insulin treated). The subset that started with average BG levels > 212 mg/dL (eA1c >9.0) and average BG levels >240 mg/dL (eA1c>10) reduced their average BG by 22.5% and 25.7% respectively on average over two years. The equivalent reductions in eA1c were 1.95% and 2.42%.
The baseline was defined as the first month’s average blood glucose. A statistical analysis (Wilcoxon and Kruskal – Wallis tests) was used to evaluate the difference between groups in their average blood glucose levels over a year. Results : 21 Table of Contents ● A group of 1000 users was analyzed, male 483 (48%) and female 517 (52%) .
The baseline was defined as the first month’s average blood glucose. A statistical analysis (Wilcoxon and Kruskal – Wallis tests) was used to evaluate the difference between groups in their average blood glucose levels over a year. Results : A group of 1,000 users was analyzed, male 483 (48%) and female 517 (52%) .
Failure to comply with applicable regulatory requirements can result in enforcement action by the regulatory agency, which may include any of the following sanctions: fines, injunctions, civil or criminal penalties, recall or seizure of our current or future products, operating restrictions, partial suspension or total shutdown of production, refusing our request for renewing clearance and/or registration of our products or granting clearance/registration for new products.
Failure to comply with applicable regulatory requirements can result in enforcement action by the applicable regulatory authorities, which may include any of the following sanctions: fines, injunctions, civil or criminal penalties, recall or seizure of our current or future products, operating restrictions, partial suspension or total shutdown of production, refusing our request for renewing marketing authorization of our products or for granting marketing authorization for new products.
Their fasting blood glucose was significantly reduced (9%) after three months (186±40.6 vs. 204±42.7) without change in hypoglycemia events ratio ( ​ In May 2021, a prospective pilot study was published in “Journal of Diabetes Science and Technology” the article: “Digital Therapeutics for Type 2 Diabetes: Incorporating Coaching Support and Validating Digital Monitoring​” ​ The study suggests that a diabetes digital platform with real-time feedback and access to coaching improved diabetes outcome measures such as HbA1c with a reduction in GV.
Their fasting blood glucose was significantly reduced (9%) after three months (186±57 vs. 204±62) without change in hypoglycemia events ratio ( ​ In May 2021, a prospective pilot study was published in a peer reviewed journal “Journal of Diabetes Science and Technology”: “Digital Therapeutics for Type 2 Diabetes: Incorporating Coaching Support and Validating Digital Monitoring​” ​ The study suggests that a diabetes digital platform with real-time feedback and access to coaching improved diabetes outcome measures such as HbA1c with a reduction in GV.
An additional study evaluated on the potential improvement in glycemic variability in Type 2 diabetes over six months in patients monitoring with Dario Digital Diabetes Management System. Dario presented the study results at the Advance Technologies and Treatment for Diabetes (ATTD) conference in February 2019 in Berlin. We presented two additional studies outcomes at ADA 2019 conference.
An additional study evaluated the potential improvement in glycemic variability in Type 2 diabetes over six months in patients monitoring with Dario Digital Diabetes Management System. Dario presented the study results at the Advance Technologies and Treatment for Diabetes (ATTD) conference in February 2019 in Berlin.
Starting with a responsive, AI-driven screener, elevate triages users to understand the need and recommend the most appropriate support to help them feel better.
Starting with a responsive, AI-driven screener, elevate triages users to understand the need and recommend the most appropriate support 11 Table of Contents to help them feel better.
Results : The total population of 715 users who participated in the study improved their weight level on average (p 2 . Over 30 percent achieved weight loss of 5% or greater over 12 months.
Weight measurements and blood glucose readings were observed over 12 months. Results : The total population of 715 users who participated in the study improved their weight level on average (p 2 . Over 30 percent achieved weight loss of 5% or greater over 12 months.
These include: ● establishment registration and device listing; ● quality system regulation, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation, and other quality assurance procedures during all phases of the product life-cycle; ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses, and other requirements related to promotional activities; ● medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; 26 Table of Contents ● corrections and removals reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the Federal Food, Drug and Cosmetic Act that may present a risk to health; and ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
These include: ● establishment registration and device listing; ● QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation, and other quality assurance procedures during all phases of the product life-cycle; ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses, and other requirements related to promotional activities; ● medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; ● corrections, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; ● the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
Such regulatory requirements vary by country and may be tedious. As a result, no assurance can be given that we will be able to satisfy the regulatory requirements to sell our products in any such country.
Such regulatory requirements vary by country, and complying with such regulations may require substantial time and effort. As a result, no assurance can be given that we will be able to satisfy the regulatory requirements to sell our products in any such country.
In order to maintain the right to affix the CE Mark to sell medical devices in the European Union, an annual surveillance audit in the company premises and, if needed, at major subcontractors’ premises needs to be carried out by the notified body.
In order to maintain the right to affix the CE Mark to sell medical devices in the European Union, periodic surveillance audits of the company premises and, if needed, at major subcontractors’ premises must to be carried out by a Notified Body.
The study evaluated the “Impact of Digital Intervention on In-range Glucose Levels in Users with Diabetes.” The study results showed 6% improvement in average blood glucose levels over 3 months intervention program for a group of 162 users. A 39% increase in the in-range (80-130 mg/dL; 14 Table of Contents average blood glucose levels of over 140mg/dL.
The study evaluated the “Impact of Digital Intervention on In-range Glucose Levels in Users with Diabetes.” The study results showed 6% improvement in average blood glucose levels over 3 months intervention program for a group of 162 users.
Unless an exemption applies, each medical device commercially distributed in the United States will require a 510(k) clearance, 510(k)+ “de-novo” clearance, or pre-market approval (or PMA) from the FDA. 510(k) Clearance Process.
Unless an exemption applies, each medical device commercially distributed in the United States will require a clearance through the pre-market notification (or 510(k)) process, De Novo classification, or pre-market approval (“PMA”) from the FDA.
As another example, our MSK device is small and easily attaches to body parts for convenient and easy use; ● Our competitors’ applications experience limited interoperability and connectivity, such that they are unable to integrate with third party devices, electronic health records or partnered solutions; and ● Our competitors have higher costs; our solutions are priced 30-50% lower than current comparable in-market solutions.
As another example, our MSK device is small and easily attaches to body parts for convenient and easy use; ● Our competitors’ applications experience limited interoperability and connectivity, such that they are unable to integrate with third party devices, electronic health records or partnered solutions; and ● Our competitors have higher costs; our solutions are priced 30-50% lower than current comparable in-market solutions. 54 Table of Contents Employees As of March 22, 2024, and following the acquisition of Twill Inc., we had 276 full-time employees and 18 part-time employees.
This application covers the novel blood glucose measurement device, comprising the glucose meter; and an adaptor that connects the glucose meter to a smart-phone to receive power supply and data display, storage, and analysis.
The PCT application was transferred to us by our founders on October 27, 2011. This application covers the novel blood glucose measurement device, comprising the glucose meter; and an adaptor that connects the glucose meter to a smart-phone to receive power supply and data display, storage, and analysis.
Decrease in Glycemic Variability for T2D over Six Months in Patients Monitoring with Dario Digital Diabetes Management System ● Reduction of 14%-18% in measurements variability was observed in T2D within 6 months ● Hypo events ( Method: A retrospective data evaluation study was performed on the Dario TM database.
We presented two additional studies outcomes at ADA 2019 conference. 16 Table of Contents Decrease in Glycemic Variability for T2D over Six Months in Patients Monitoring with Dario Digital Diabetes Management System ● The study demonstrated a reduction of 14%-18% in measurements variability was observed in T2D within 6 months ● Hypo events ( Methods: A retrospective data evaluation study was performed on the Dario TM database.
A subset of 114 users with diabetes in higher risk started with BG average >160 mg/dL improved their average blood glucose by 14% (207±47 vs.177±50 mg/dL) following six months. ​ In November 2020, we presented additional clinical study data at the Virtual Diabetes Technology Society (DTS) meeting. 16 Table of Contents The Effect of a Digital Therapeutic Platform on Glycemic Control in Adults above Age 65 with Type 2 Diabetes.
A subset of 114 users with diabetes in higher risk started with BG average >160 mg/dL improved their average blood glucose by 14% (207±47 vs.177±50 mg/dL) following six months compared to baseline. ​ In November 2020, we presented additional clinical study data at the Virtual Diabetes Technology Society (DTS) meeting.
PCT/IL2011/000369, titled “Fluids Testing Apparatus and Methods of Use.” This PCT claimed priority from two 28 Table of Contents preceding U.S. provisional applications filed by our founders, with the earliest priority date being May 9, 2010. The PCT application was transferred to us by our founders on October 27, 2011.
Intellectual Property Patent applications On May 8, 2011, certain of our founders filed a Patent Cooperation Treaty (PCT) Application No. PCT/IL2011/000369, titled “Fluids Testing Apparatus and Methods of Use.” This PCT claimed priority from two 48 Table of Contents preceding U.S. provisional applications filed by our founders, with the earliest priority date being May 9, 2010.
The “DARIOHEALTH” wordmark is registered as a trademark in the United States, Canada, China and India. 29 Table of Contents Upright also added the following trademarks to our list: UPRIGHT, UPRIGHT GO – registered in the US, AU and EM, and UPRIGHT DASHBOARD, UPRIGHT DESKTOP, UPRIGHT GO 2, UPRIGHT PRO, UPRIGHT POSTURE IS WITHING REACH – registered in the US. ​ Utility Models We have been granted Utility Models for our core invention in Japan and Germany.
Upright also added the following trademarks to our list: UPRIGHT, UPRIGHT GO – registered in the US, AU and EM, and UPRIGHT DASHBOARD, UPRIGHT DESKTOP, UPRIGHT GO 2, UPRIGHT POSTURE IS WITHING REACH – registered in the U.S. 49 Table of Contents ​ Utility Models We have been granted Utility Models for our core invention in Japan.
Our solutions are proven to drive savings for health plans and employers by improving the health of their populations. Overview We began as a direct-to-consumer digital therapeutics company, solving first for the problem of how to engage users and support behavior change to improve clinical outcomes in diabetes.
Overview We began as a direct-to-consumer digital therapeutics company, solving first for the problem of how to engage users and support behavior change to improve clinical outcomes in diabetes.
Piecewise mixed models were used for modeling the two-stage trajectory of pain levels, perceived posture quality, and weekly training duration following an 8-week biofeedback training. Also, the mediation effect of perceived posture quality on the analgesic effect of training duration was tested using Monte Carlo simulations based on lagged effect mixed models.
Piecewise mixed models were used for modeling the two-stage trajectory of pain levels, perceived posture quality, and weekly training duration following an 8-week biofeedback training.
In September 2013, we obtained ISO 13485 certification for our quality management system and CE Mark certification to market Dario, and in May 2015 Dario was cleared to fulfill the criteria according to EN ISO 15197:2013 The granting of the CE Mark allows Dario to be marketed and sold in 32 countries across Europe as well as in certain other countries worldwide.
In September 2013, we obtained ISO 13485 certification for our quality management system and CE Mark certification to market Dario, and in May 2015 Dario was cleared to fulfill the criteria according to EN ISO 15197:2013.
Importantly, we provide clinical validation for digital self-monitoring to deliver personalized care for patients with T2DM. Future research should replicate our findings using a larger sample. ​ Method : In this study (ClinicalTrials.gov: NCT04057248), 12 participants with baseline HbA1c >8.5% were provided with Dario digital therapeutic platform (connected blood glucose meter, test strips, mobile app and access to live CDCES).
Future research should replicate our findings using a larger sample. ​ Methods : In this study (ClinicalTrials.gov: NCT04057248), 12 participants with baseline HbA1c >8.5% were provided with Dario digital therapeutic platform (connected blood glucose meter, test strips, mobile app and access to live CDCES). At both study enrollment and completion, participants completed blood testing and a satisfaction report.
Additionally, out of 100 users who started at a moderate anxiety level, 84 (84%) improved or maintained their level (P ​ On September 2022, a retrospective data analysis study was published in “International Association for the Study of Pain” (IASP) large conference.
Additionally, out of 100 users who started at a moderate anxiety level, 84 (84%) improved or maintained their level (P ​ In September 2022, a retrospective data analysis study was published in “International Association for the Study of Pain” (IASP) large conference. ​ Pain level reduction mediated by perceived posture quality and training duration in patients using digital therapeutic biofeedback technology The study sheds light on the nature of the linkage between posture biofeedback technology and pain reduction.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe completion of any future clinical trials for Dario or other trials that we may be required to undertake in the future could be delayed, suspended or terminated for several reasons, including: ● our failure or inability to conduct the clinical trial in accordance with regulatory requirements; ● sites participating in the trial may drop out of the trial, which may require us to engage new sites for an expansion of the number of sites that are permitted to be involved in the trial; ● delays that we may experience in enrollment, or completion of certain trials, as a result of COVID-19; ● patients may not enroll in, remain in or complete, the clinical trial at the rates we expect; and ● clinical investigators may not perform our clinical trial on our anticipated schedule or consistent with the clinical trial protocol and good clinical practices.
Biggest changeThe completion of any future clinical trials for Dario or other trials that we may be required to undertake in the future could be delayed, suspended or terminated for several reasons, including: ● delay or failure in reaching agreement with regulatory authorities on a trial design that we are able to execute; ● delay or failure in obtaining authorization to commence a trial, including approval from the appropriate IRB to conduct testing of a product candidate on human subjects, or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; ● delay in reaching, or failure to reach, agreement on acceptable terms with prospective contract research organizations and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● failure or inability to conduct the clinical trial in accordance with regulatory requirements; 66 Table of Contents ● sites participating in the trial may drop out of the trial, which may require us to engage new sites for an expansion of the number of sites that are permitted to be involved in the trial; ● failure to initiate or delay of or inability to complete a clinical trial as a result of a clinical hold imposed by a regulatory authority due to observed safety findings or other reasons; ● delays that we may experience in patient enrollment or completion of certain trials; ● patients may not enroll in, remain in or complete, the clinical trial at the rates we expect; and ● clinical investigators may not perform our clinical trial on our anticipated schedule or consistent with the clinical trial protocol and good clinical practices.
Some of the factors that may cause the market price of our common stock and warrants to fluctuate include: ● any delay in or the results of our clinical trials; ● any delay in manufacturing of our products; ● any delay with the approval for reimbursement for the patients from their insurance companies; ● our failure to comply with regulatory requirements; ● the announcements of clinical trial data, and the investment community’s perception of and reaction to those data; ● the results of clinical trials conducted by others on products that would compete with ours; ● any delay or failure to receive clearance or approval from regulatory agencies or bodies; ● our inability to commercially launch products or market and generate sales of our products, including Dario; ● failure of Dario or any other products, even if approved for marketing, to achieve any level of commercial success; ● our failure to obtain patent protection for any of our technologies and products (including those related to Dario) or the issuance of third-party patents that cover our proposed technologies or products; ● developments or disputes concerning our product’s intellectual property rights; 52 Table of Contents ● our or our competitors’ technological innovations; ● general and industry-specific economic conditions that may affect our expenditures; ● changes in market valuations of similar companies; ● announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new technologies, or patents; ● future sales of our common stock or other securities, including shares issuable upon the exercise of outstanding warrants or otherwise issued pursuant to certain contractual rights; ● period-to-period fluctuations in our financial results; and ● low or high trading volume of our common stock due to many factors, including the terms of our financing arrangements.
Some of the factors that may cause the market price of our common stock and warrants to fluctuate include: ● any delay in or the results of our clinical trials; ● any delay in manufacturing of our products; ● any delay with the approval for reimbursement for the patients from their insurance companies; ● our failure to comply with regulatory requirements; ● the announcements of clinical trial data, and the investment community’s perception of and reaction to those data; ● the results of clinical trials conducted by others on products that would compete with ours; ● any delay or failure to receive clearance or approval from regulatory agencies or bodies; ● our inability to commercially launch products or market and generate sales of our products, including Dario; ● failure of Dario or any other products, even if approved for marketing, to achieve any level of commercial success; ● our failure to obtain patent protection for any of our technologies and products (including those related to Dario) or the issuance of third-party patents that cover our proposed technologies or products; ● developments or disputes concerning our product’s intellectual property rights; ● our or our competitors’ technological innovations; ● general and industry-specific economic conditions that may affect our expenditures; ● changes in market valuations of similar companies; ● announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new technologies, or patents; ● future sales of our common stock or other securities, including shares issuable upon the exercise of outstanding warrants or otherwise issued pursuant to certain contractual rights; ● period-to-period fluctuations in our financial results; and ● low or high trading volume of our common stock due to many factors, including the terms of our financing arrangements.
Our reliance on these third-party suppliers also subjects us to other risks that could harm our business, including: ● we are not a major customer of many of our suppliers, and these suppliers may therefore give other customers’ needs higher priority than ours; ● third parties may threaten or enforce their intellectual property rights against our suppliers, which may cause disruptions or delays in shipment, or may force our suppliers to cease conducting business with us; ● we may not be able to obtain an adequate supply in a timely manner or on commercially reasonable terms; ● our suppliers, especially new suppliers, may make errors in manufacturing that could negatively affect the efficacy or safety of the Dario Blood Glucose Monitoring System or cause delays in shipment; ● we may have difficulty locating and qualifying alternative suppliers; ● switching components or suppliers may require product redesign and possibly submission to FDA, European Economic Area Notified Bodies, or other foreign regulatory bodies, which could significantly impede or delay our commercial activities; ● one or more of our sole- or single-source suppliers may be unwilling or unable to supply components of the Dario Blood Glucose Monitoring System; ● other customers may use fair or unfair negotiation tactics and/or pressures to impede our use of the supplier; ● the occurrence of a fire, natural disaster or other catastrophe impacting one or more of our suppliers may affect their ability to deliver products to us in a timely manner; and ● our suppliers may encounter financial or other business hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
Our reliance on these third-party suppliers also subjects us to other risks that could harm our business, including: ● we are not a major customer of many of our suppliers, and these suppliers may therefore give other customers’ needs higher priority than ours; ● third parties may threaten or enforce their intellectual property rights against our suppliers, which may cause disruptions or delays in shipment, or may force our suppliers to cease conducting business with us; ● we may not be able to obtain an adequate supply in a timely manner or on commercially reasonable terms; ● our suppliers, especially new suppliers, may make errors in manufacturing that could negatively affect the efficacy or safety of the Dario Blood Glucose Monitoring System or cause delays in shipment; ● we may have difficulty locating and qualifying alternative suppliers; 59 Table of Contents ● switching components or suppliers may require product redesign and possibly submission to FDA, European Economic Area Notified Bodies, or other foreign regulatory bodies, which could significantly impede or delay our commercial activities; ● one or more of our sole- or single-source suppliers may be unwilling or unable to supply components of the Dario Blood Glucose Monitoring System; ● other customers may use fair or unfair negotiation tactics and/or pressures to impede our use of the supplier; ● the occurrence of a fire, natural disaster or other catastrophe impacting one or more of our suppliers may affect their ability to deliver products to us in a timely manner; and ● our suppliers may encounter financial or other business hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
These risks and uncertainties include: ● management, communication and integration problems resulting from cultural differences and geographic dispersion; ● localization of products and services, including translation of foreign languages; ● delivery, logistics and storage costs; ● longer accounts receivable payment cycles and difficulties in collecting accounts receivable; ● difficulties supporting international operations; 39 Table of Contents ● difficulties supporting customer services; ● changes in economic and political conditions; ● impact of trade protection measures; ● complying with import or export licensing requirements; ● exchange rate fluctuations; ● competition from companies with international operations, including large international competitors and entrenched local companies; ● potentially adverse tax consequences, including foreign tax systems and restrictions on the repatriation of earnings; ● maintaining and servicing computer hardware in distant locations; ● keeping current and complying with a wide variety of foreign laws and legal standards, including local labor laws; ● securing or maintaining protection for our intellectual property; and ● reduced or varied protection for intellectual property rights, including the ability to transfer such rights to third parties, in some countries.
These risks and uncertainties include: ● management, communication and integration problems resulting from cultural differences and geographic dispersion; ● localization of products and services, including translation of foreign languages; ● delivery, logistics and storage costs; ● longer accounts receivable payment cycles and difficulties in collecting accounts receivable; ● difficulties supporting international operations; ● difficulties supporting customer services; ● changes in economic and political conditions; ● impact of trade protection measures; ● complying with import or export licensing requirements; ● exchange rate fluctuations; ● competition from companies with international operations, including large international competitors and entrenched local companies; ● potentially adverse tax consequences, including foreign tax systems and restrictions on the repatriation of earnings; ● maintaining and servicing computer hardware in distant locations; ● keeping current and complying with a wide variety of foreign laws and legal standards, including local labor laws; ● securing or maintaining protection for our intellectual property; and ● reduced or varied protection for intellectual property rights, including the ability to transfer such rights to third parties, in some countries.
While we are unable to predict what changes may ultimately be enacted, to the extent that future changes affect how our products are paid for and reimbursed by government and private payers our business could be adversely impacted.
While we are unable to predict what changes may ultimately be enacted, to the extent that future changes affect how our products and services are paid for and reimbursed by government and private payers, our business could be adversely impacted.
To date, we have received regulatory clearance in Australia, Canada, Israel, Italy, the Netherlands, New Zealand, the United Kingdom, and the United States. The research, design, testing, manufacturing, labeling, selling, marketing and distribution of medical devices are subject to extensive regulation by the FDA and non-U.S. regulatory authorities, which regulations differ from country to country.
To date, we have received regulatory authorization in Australia, Canada, Israel, Italy, the Netherlands, New Zealand, the United Kingdom, and the United States. The research, design, testing, manufacturing, labeling, selling, marketing and distribution of medical devices are subject to extensive regulation by the FDA and non-U.S. regulatory authorities, which regulations differ from country to country.
In the event that we are required to make payments to investors as a result of these unregistered sales of securities, our liquidity could be negatively impacted. 33 Table of Contents Risks Related to Our Business There is no assurance that our DarioEngage software platform will succeed or be adopted by healthcare providers.
In the event that we are required to make payments to investors as a result of these unregistered sales of securities, our liquidity could be negatively impacted. 57 Table of Contents Risks Related to Our Business There is no assurance that our DarioEngage software platform will succeed or be adopted by healthcare providers.
Failure of clinical investigators or contract research organizations to meet their obligations to us or comply with federal regulations could adversely affect the clinical development of our product candidates and harm our business. Moreover, we intend to have several clinical trials in order to support our marketing efforts and business development purposes.
Failure of clinical investigators or contract research organizations to meet their obligations to us or comply with federal regulations could adversely affect the clinical development of our product candidates and harm our business. Moreover, we intend to conduct several clinical trials in order to support our marketing efforts and business development purposes.
In the future, we may experience issues with our computing and communications infrastructure, or data centers caused by the following factors: • human error; • telecommunications failures or outages from third-party providers; 38 Table of Contents • computer viruses or cyber-attacks; • break-ins or other security breaches; • acts of terrorism, sabotage, intentional acts of vandalism or other misconduct; • tornadoes, fires, earthquakes, hurricanes, floods and other natural disasters; • power loss; and • other unforeseen interruptions or damages.
In the future, we may experience issues with our computing and communications infrastructure, or data centers caused by the following factors: • human error; • telecommunications failures or outages from third-party providers; • computer viruses or cyber-attacks; • break-ins or other security breaches; • acts of terrorism, sabotage, intentional acts of vandalism or other misconduct; • tornadoes, fires, earthquakes, hurricanes, floods and other natural disasters; • power loss; and • other unforeseen interruptions or damages.
The Dario Smart Diabetes Management Solution may contain undetected errors, defects or bugs. As a result, our customers or end users may discover errors or defects in our products, software or the systems we design, or the products or systems incorporating our designs and intellectual property may not operate as expected.
The Dario Management Solution may contain undetected errors, defects or bugs. As a result, our customers or end users may discover errors or defects in our products, software or the systems we design, or the products or systems incorporating our designs and intellectual property may not operate as expected.
In response to the foregoing developments, individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed changes may negatively impact the business environment in Israel including due to reluctance of foreign investors to invest or conduct business in Israel, as well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in securities markets, and other changes in macroeconomic conditions.
In response to the foregoing developments, individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed changes may negatively impact the business environment in Israel including reluctance of foreign investors to invest or transact business in Israel as well as increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in securities markets, and other changes in macroeconomic conditions within Israel.
The market price for our common stock may be significantly volatile and subject to wide fluctuations in response to factors including the following: ● actual or anticipated fluctuations in our quarterly or annual operating results; ● changes in financial or operational estimates or projections; ● conditions in markets generally; ● changes in the economic performance or market valuations of companies similar to ours; and ● general economic or political conditions in the United States or elsewhere.
The market price for our common stock may be significantly volatile and subject to wide fluctuations in response to factors including the following: ● actual or anticipated fluctuations in our quarterly or annual operating results; 78 Table of Contents ● changes in financial or operational estimates or projections; ● conditions in markets generally; ● changes in the economic performance or market valuations of companies similar to ours; and ● general economic or political conditions in the United States or elsewhere.
A third party may 46 Table of Contents claim that we are using inventions claimed by their patents and may go to court to stop us from engaging in our normal operations and activities, such as research, development and the sale of any future products. Such lawsuits are expensive and would consume significant time and other resources.
A third party may claim that we are using inventions claimed by their patents and may go to court to stop us from engaging in our normal operations and activities, such as research, development and the sale of any future products. Such lawsuits are expensive and would consume significant time and other resources.
Such disruption could materially adversely affect our business, financial condition and results of operations. Investors may have difficulties enforcing a U.S. judgment, including judgments based upon the civil liability provisions of the U.S. federal securities laws, against us, or our executive officers and directors or asserting U.S. securities laws claims in Israel.
Such disruption could materially adversely affect our business, financial condition and results of operations. 77 Table of Contents Investors may have difficulties enforcing a U.S. judgment, including judgments based upon the civil liability provisions of the U.S. federal securities laws, against us, or our executive officers and directors or asserting U.S. securities laws claims in Israel.
We must also obtain regulatory approvals of Dario in certain jurisdictions as well as approval for insurance reimbursement in order to initiate sales of Dario, each of which is subject to risk and potential delays, and neither of which may actually occur. As such, we cannot accurately predict the volume or timing of any future sales.
We must also obtain regulatory approvals of Dario in certain 58 Table of Contents jurisdictions as well as approval for insurance reimbursement in order to initiate sales of Dario, each of which is subject to risk and potential delays, and neither of which may actually occur. As such, we cannot accurately predict the volume or timing of any future sales.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third 73 Table of Contents parties to assert claims against us.
Moreover, pre-clinical and clinical data are susceptible to varying interpretations, which could delay, limit or prevent additional regulatory approvals. A number of companies in the medical device and pharmaceutical industries have suffered significant setbacks in advanced clinical studies, even after promising results in earlier studies.
Moreover, nonclinical and clinical data are susceptible to varying interpretations, which could delay, limit or prevent additional regulatory approvals. A number of companies in the medical device and pharmaceutical industries have suffered significant setbacks in advanced clinical trials, even after promising results in earlier studies.
Despite the protective measures we employ, we still face the risk that: 47 Table of Contents ● these agreements may be breached; ● these agreements may not provide adequate remedies for the applicable type of breach; ● our proprietary know-how will otherwise become known; or ● our competitors will independently develop similar technology or proprietary information.
Despite the protective measures we employ, we still face the risk that: ● these agreements may be breached; ● these agreements may not provide adequate remedies for the applicable type of breach; ● our proprietary know-how will otherwise become known; or ● our competitors will independently develop similar technology or proprietary information.
If we are unable to modify our products to keep pace with such technological changes, it would have a material adverse effect the ability of our customers to use our products, which would materially harm our business. As we conduct business internationally, we are susceptible to risks associated with international relationships.
If we are unable to modify our products to keep pace with such technological changes, it would have a material adverse effect the ability of our customers to use our products, which would materially harm our business. 62 Table of Contents As we conduct business internationally, we are susceptible to risks associated with international relationships.
Any 36 Table of Contents interruption or delay in obtaining products from our third-party suppliers, or our inability to obtain products from qualified alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers and cause them to switch to competing products.
Any interruption or delay in obtaining products from our third-party suppliers, or our inability to obtain products from qualified alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers and cause them to switch to competing products.
A key component of the Dario Smart Diabetes Management Solution is an iPhone or Android application which includes tools to help diabetic patients manage their disease. This application is compatible with Apple’s iOS and with Google’s Android platforms and may in the future become compatible via additional platforms.
A key component of the Dario Solution is an iPhone or Android application which includes tools to help diabetic patients manage their disease. This application is compatible with Apple’s iOS and with Google’s Android platforms and may in the future become compatible via additional platforms.
According to our management’s estimates, based on our current cash on hand and further based on our budget and the assumption that initial commercial sales will commence during our anticipated timeframes, we believe that we will have sufficient resources to continue our activities through 2023. 32 Table of Contents Since we might be unable to generate sufficient revenue or cash flow to fund our operations for the foreseeable future, we will need to seek additional equity or debt financing to provide the capital required to maintain or expand our operations.
According to our management’s estimates, based on our current cash on hand and further based on our budget and the assumption that initial commercial sales will commence during our anticipated timeframes, we believe that we will have sufficient resources to continue our activities through 202 5 . 56 Table of Contents Since we might be unable to generate sufficient revenue or cash flow to fund our operations for the foreseeable future, we will need to seek additional equity or debt financing to provide the capital required to maintain or expand our operations.
While studies conducted by us have produced results we believe to be encouraging and indicative of the potential efficacy of Dario, data already obtained, or in the future obtained, from pre-clinical studies and clinical studies do not necessarily predict the results that will be obtained from later pre-clinical studies and clinical studies.
While studies conducted by us have produced results we believe to be encouraging and indicative of the potential efficacy of Dario, data already obtained, or in the future obtained, from nonclinical studies and clinical trials do not necessarily predict the results that will be obtained from later nonclinical studies or clinical trials.
In contrast, revenue from our on-premise software and hardware sales is generally recognized in full at the time of delivery. Accordingly, the SaaS delivery model creates risks related to the timing of revenue recognition not associated with our traditional on-premise software delivery model and hardware sales.
In contrast, revenue from our on-premise 61 Table of Contents software and hardware sales is generally recognized in full at the time of delivery. Accordingly, the SaaS delivery model creates risks related to the timing of revenue recognition not associated with our traditional on-premise software delivery model and hardware sales.
Our success in marketing our services depend and will depend in large part on whether U.S. and international government health administrative authorities, private health insurers and other organizations adequately cover and reimburse customers for the cost of our products and services.
Our success in 75 Table of Contents marketing our services depend and will depend in large part on whether U.S. and international government health administrative authorities, private health insurers and other organizations adequately cover and reimburse customers for the cost of our products and services.
There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares. ​ Item 1B. Unresolved Staff Comments Not applicable. ​
There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares. ​ Item 1B. Unresolved Staff Comments Not applicable. 81 Table of Contents ​
The occurrence of any or all of these risks could adversely affect our international business and, consequently, our results of operations and financial condition. We expect to be exposed to fluctuations in currency exchange rates, which could adversely affect our results of operations.
The occurrence of any or all of these risks could adversely affect our international business and, consequently, our results of operations and financial condition. 63 Table of Contents We expect to be exposed to fluctuations in currency exchange rates, which could adversely affect our results of operations.
Certain of these individuals also have significant control 51 Table of Contents over our business, policies and affairs as officers or directors of our company. Therefore, you should not invest in reliance on your ability to have any control over our company.
Certain of these individuals also have significant control over our business, policies and affairs as officers or directors of our company. Therefore, you should not invest in reliance on your ability to have any control over our company.
Additionally, as we approach the announcement of anticipated significant information and as we announce such information, we expect the price of our common stock and warrants to be particularly volatile, and negative results would have a substantial negative impact on the price of our common stock and warrants.
Additionally, as we approach the announcement of anticipated significant information and 79 Table of Contents as we announce such information, we expect the price of our common stock and warrants to be particularly volatile, and negative results would have a substantial negative impact on the price of our common stock and warrants.
There can be no assurance that we will successfully complete additional clinical studies necessary to receive additional regulatory approvals in certain jurisdictions.
There can be no assurance that we will successfully complete additional clinical trials necessary to receive additional regulatory approvals in certain jurisdictions.
In addition, since the publication of discoveries in scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were the first to make our inventions or to file patent applications covering those inventions.
In addition, since 72 Table of Contents the publication of discoveries in scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were the first to make our inventions or to file patent applications covering those inventions.
Risks Related to the Ownership of Our Common Stock Our officers and directors may exert significant influence over our affairs, including the outcome of matters requiring stockholder approval. As of the date of this Annual Report, our officers and directors collectively have a beneficial ownership interest of approximately 9.5% of our Company.
Risks Related to the Ownership of Our Common Stock Our officers and directors may exert significant influence over our affairs, including the outcome of matters requiring stockholder approval. As of the date of this Annual Report, our officers and directors collectively have a beneficial ownership interest of approximately 15.7% of our Company.
Even though we have received CE mark and FDA clearance of Dario, there can be no assurance that we will be able to receive approval for other potential applications of our principal technology, or that we will receive regulatory clearances from other targeted regions or countries.
Even though we have received CE mark and FDA clearance of Dario, there can be no assurance that we will be able to receive authorization for other potential applications of our principal technology, or that we will receive regulatory authorizations from other targeted regions or countries.
If our clinical trial is delayed it will take us longer to further commercialize Dario and generate additional revenues. Moreover, our development costs will increase if we have material delays in our clinical trial or if we need to perform more or larger clinical trials than planned.
If our ongoing or future clinical trials are delayed it will take us longer to further commercialize Dario and generate additional revenues. Moreover, our development costs will increase if we have material delays in our clinical trial or if we need to perform more or larger clinical trials than planned.
The difficulty of combining Upright and PsyInnovations with our company may be increased by the need to integrate personnel, and changes effected in the combination may cause key employees to leave.
The difficulty of combining Twill with our company may be increased by the need to integrate personnel, and changes effected in the combination may cause key employees to leave.
If reimbursement of our product candidates is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability. 40 Table of Contents Our Dario Smart Diabetes Management Solution and associated business processes may contain undetected errors, which could limit our ability to provide our services and diminish the attractiveness of our service offerings.
If reimbursement of our product candidates is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability. Our Dario Solution and associated business processes may contain undetected errors, which could limit our ability to provide our services and diminish the attractiveness of our service offerings.
If our affiliates, our manufacturers or suppliers are found to be in significant non-compliance or fail to take satisfactory corrective action in response to adverse QSR inspectional findings, the FDA could take enforcement actions against us and our manufacturers which could impair our ability to produce our products in a cost-effective and timely manner in order to meet our customers’ demands.
If we, our affiliates, our manufacturers or suppliers are found to be in significant non-compliance or fail to take satisfactory corrective action in response to adverse inspectional findings, the FDA or other applicable regulatory authority could take enforcement actions against us and our manufacturers which could impair our ability to produce our products in a cost-effective and timely manner in order to meet our customers’ demands.
There can be no assurance that these acquisitions will provide the 41 Table of Contents benefits we expect or that we will be able to integrate and develop the operations of Upright and PsyInnovations successfully. Any failure to do so could have a material adverse effect on our business, operating results and financial condition.
There can be no assurance that these acquisitions will provide the benefits we expect or that we will be able to integrate and develop the operations of Twill successfully. Any failure to do so could have a material adverse effect on our business, operating results and financial condition.
Risks Related to Product Development and Regulatory Approval The regulatory clearance process which we must navigate is expensive, time-consuming, and uncertain and may prevent us from obtaining clearance for the commercialization of Dario or our any future product. We are not permitted to market Dario until we receive regulatory clearance.
Risks Related to Product Development and Regulatory Approval The regulatory clearance process which we must navigate is expensive, time-consuming, and uncertain and may prevent us from obtaining clearance for the commercialization of Dario or our any future product. We are not permitted to market Dario in any jurisdiction until we receive marketing authorization from the applicable regulatory authority.
In addition, these regulatory requirements may change in the future in a way that adversely affects us.
Regulatory requirements may change in the future in a way that adversely affects us.
Further, the FDA and other regulatory bodies around the world require that we comply with standards, commonly referred to as good clinical practice, for conducting, recording and reporting clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity, and confidentiality of trial subjects are protected.
Further, the FDA and other regulatory bodies around the world require that we comply with GCP standards for conducting, recording and reporting clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity, and confidentiality of trial subjects are protected.
The PCT covers the specific processes 45 Table of Contents related to blood glucose level measurement as well as more general methods of rapid tests of body fluids and has subsequently been converted into several national phase patent applications. We have also filed patent applications for other aspects of the Dario Blood Glucose Monitoring Solution.
The PCT covers the specific processes related to blood glucose level measurement as well as more general methods of rapid tests of body fluids and has subsequently been converted into several national phase patent applications. We have also filed patent applications for other aspects of the Dario Blood Glucose Monitoring Solution. We have also obtained numerous Web domains.
If we fail to comply with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by regulatory agencies, which may include, among others, any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees, and civil penalties; ● customer notification, or orders for repair, replacement or refunds; ● voluntary or mandatory recall or seizure of our current or future products; ● imposing operating restrictions, suspension or shutdown of production; ● refusing our requests for 510(k) clearance or pre-market approval of new products, new intended uses or modifications to Dario or future products; ● rescinding 510(k) clearance or suspending or withdrawing pre-market approvals that have already been granted; and ● criminal prosecution.
If we fail to comply 65 Table of Contents with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by regulatory agencies, which may include, among others, any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees, and civil penalties; ● customer notification, or orders for repair, replacement or refunds; ● voluntary or mandatory recall or seizure of our current or future products; ● imposing operating restrictions, suspension or shutdown of production; ● refusing our requests for marketing authorization of new products, new intended uses or modifications to Dario or future products; ● suspending or withdrawing marketing authorizations that have already been granted; and ● criminal prosecution.
If independent investigators fail to devote sufficient resources to our clinical 43 Table of Contents trials, or if their performance is substandard, it will delay the approval or clearance and commercialization of any products that we develop.
If the independent investigators or contract research organizations fail to devote sufficient resources to our clinical trials, or if their performance is substandard, it will delay the approval or clearance and commercialization of any products that we develop.
We have financed our operations primarily through private placements and public offerings of common stock and have incurred losses in each year since inception including net losses of $62,193,000 and $76,761,000 in 2022 and 2021, respectively. Our accumulated deficit at December 31, 2022 was approximately $285,850,000. We do not know whether or when we will become profitable.
We have financed our operations primarily through private placements and public offerings of common stock and have incurred losses in each year since inception including net losses of $59,427,000 and $62,193,000 in 2023 and 2022, respectively. Our accumulated deficit at December 31, 2023 was approximately $349,361,000. We do not know whether or when we will become profitable.
Our certificate of incorporation and bylaws: ● authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to thwart a takeover attempt; ● provide that vacancies on our Board of Directors, including newly created directorships, may be filled only by a majority vote of directors then in office; ● provide that special meetings of stockholders may only be called by our Chairman, Chief Executive Officer and/or President or other executive officer, our Board of Directors or a super-majority (66 2/3%) of our stockholders; ● place restrictive requirements (including advance notification of stockholder nominations and proposals) on how special meetings of stockholders may be called by our stockholders; ● do not provide stockholders with the ability to cumulate their votes; and ● provide that our Board of Directors or a super-majority of our stockholders (66 2/3%) may amend our bylaws. 54 Table of Contents We are a smaller reporting company and the reduced reporting requirements applicable to smaller reporting companies may make our common stock less attractive to investors.
Our certificate of incorporation and bylaws: ● authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to thwart a takeover attempt; ● provide that vacancies on our Board of Directors, including newly created directorships, may be filled only by a majority vote of directors then in office; ● provide that special meetings of stockholders may only be called by our Chairman, Chief Executive Officer and/or President or other executive officer, our Board of Directors or a super-majority (66 2/3%) of our stockholders; ● place restrictive requirements (including advance notification of stockholder nominations and proposals) on how special meetings of stockholders may be called by our stockholders; ● do not provide stockholders with the ability to cumulate their votes; and ● provide that our Board of Directors or a super-majority of our stockholders (66 2/3%) may amend our bylaws.
If our independent clinical investigators and contract research organizations fail to comply with good clinical practice, the results of our clinical trials could be called into question and the clinical development of our product candidates could be delayed.
If our independent clinical investigators and contract research 67 Table of Contents organizations fail to comply with GCP, the results of our clinical trials could be called into question and the clinical development of our product candidates could be delayed.
Because we plan to use non-traditional retail sales tools and to rely on healthcare providers to educate our customers about Dario, we cannot predict the level of success, if any, that we may achieve by marketing Dario via the internet. The failure of our online marketing efforts would significantly and negatively impact our ability to generate sales.
Because we plan to use non-traditional retail sales tools and to rely on healthcare providers to educate our customers about Dario, we cannot predict the level of success, if any, that we may achieve by marketing Dario via the internet.
We will also compete with numerous second-tier and third-tier competitors. In addition, we only recently transformed our business to primarily focus on the sale of our digital support solution, which joins a crowded field of competitors such as Amazon, Apple and Google.
In addition, we only recently transformed our business to primarily focus on the sale of our digital support solution, which joins a crowded field of competitors such as Amazon, Apple and Google.
Each of Apple and Google has broad discretion to change its standard terms and conditions, including changes which could require us to pay to have our Dario Smart Diabetes Management application available for downloading. In addition, these standard terms and conditions can be vague and subject to changing interpretations by Apple or Google.
Each of Apple and Google has broad discretion to change its standard terms and conditions, including changes which could require us to pay to have our Dario application available for downloading. In addition, these standard terms and conditions can be vague and subject to changing interpretations by Apple or Google. We may not receive any advance warning of such changes.
Our internal control over financial reporting may have weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our common stock. We are required to establish and maintain appropriate internal control over financial reporting.
If we fail to maintain effective internal control over financial reporting, the price of our common stock may be adversely affected. Our internal control over financial reporting may have weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our common stock.
We have also obtained numerous Web domains. However, to date, we have only been issued four patents (three of which were issued in the United States) relating to how the Dario Blood Glucose Monitoring System draws power from and transmits data to a smartphone via the audio jack port.
However, to date, we have only been issued four patents (three of which were issued in the United States) relating to how the Dario Blood Glucose Monitoring System draws power from and transmits data to a smartphone via the audio jack port. None of our other patents have been granted by a patent office.
We may be faced with lengthy customer evaluation and approval processes associated with Dario. Consequently, we may incur substantial expenses and devote significant management effort and expense in developing customer adoption of Dario which may not result in revenue generation.
Consequently, we may incur substantial expenses and devote significant management effort and expense in developing customer adoption of Dario which may not result in revenue generation.
This will require that we integrate more closely the companies’ product offerings and research and development capabilities, retain key employees, assimilate diverse corporate cultures, further integrate management information systems and consolidate the acquired operations, each of which could pose significant challenges.
We believe that the successful integration of Twill’s business into our operations is important for our future financial performance. This will require that we integrate more closely the companies’ product offerings and research and development capabilities, retain key employees, assimilate diverse corporate cultures, further integrate management information systems and consolidate the acquired operations, each of which could pose significant challenges.
We may not receive any advance warning of such changes. In addition, each of Apple and Google has the right to prohibit a developer from distributing its applications on its storefront if the developer violates its standard terms and conditions.
In addition, each of Apple and Google has the right to prohibit a developer from distributing its applications on its storefront if the developer violates its standard terms and conditions.
In many international markets, a product must be approved for reimbursement before it can be approved for sale in that country. Further, many international markets have government-managed healthcare systems that control reimbursement for new devices and procedures. In most markets, there are private insurance systems as well as government-managed systems.
Further, many international markets have government-managed healthcare systems that control reimbursement for new devices and procedures. In most markets, there are private insurance systems as well as government-managed systems.
We expect to derive substantially all of our revenues from sales of products derived from our principal technology. Our initial product utilizing this technology is Dario.
We expect to derive substantially all of our revenues from our principal technology, which leaves us subject to the risk of reliance on such technology. We expect to derive substantially all of our revenues from sales of products derived from our principal technology. Our initial product utilizing this technology is Dario.
We currently have a credit facility in place with OrbiMed Royalty and Credit Opportunities III, LP , of which $25 million was made available in June 2022. However, there can be no assurance that we will be able to raise sufficient additional capital on acceptable terms, or at all.
We currently have a credit facility in place with Avenue Venture Opportunities Fund L.P. and Avenue Venture Opportunities Fund II, L.P. , of which $30 million was made available in May 2023. However, there can be no assurance that we will be able to raise sufficient additional capital on acceptable terms, or at all.
Failure to establish those controls, or any failure of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial condition or results of operations.
We are required to establish and maintain appropriate internal control over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial condition or results of operations.
If Dario or any of our future products are defectively designed or manufactured contain defective components or are misused, or if someone claims any of the foregoing, whether or not meritorious, we may become subject to substantial and costly litigation.
These suits could result in expensive and time-consuming litigation, payment of substantial damages, and an increase in our insurance rates. If Dario or any of our future products are defectively designed or manufactured, contain defective components, or are misused, or if someone claims any of the foregoing, whether or not meritorious, we may become subject to substantial and costly litigation.
The failure to adequately demonstrate the safety and effectiveness of an intended product under development could delay or prevent regulatory clearance of the device, resulting in delays to commercialization, and could materially harm our business.
If we fail to adequately demonstrate the safety and effectiveness of a product candidate under development, it could delay or prevent regulatory authorization of the device, resulting in delays to commercialization, and could materially harm our business.
We may not be able to hire or retain the necessary personnel to implement our business strategy. Our failure to hire and retain such personnel could impair our ability to develop new products and manage our business effectively.
Competition for experienced, high-quality personnel is intense and we cannot assure that we will be able to recruit and retain such personnel. We may not be able to hire or retain the necessary personnel to implement our business strategy. Our failure to hire and retain such personnel could impair our ability to develop new products and manage our business effectively.
As a result, our efforts to comply with evolving laws, regulations and standards of a U.S. public company are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. 53 Table of Contents Moreover, our executive officers have little experience in operating a U.S. public company, which makes our ability to comply with applicable laws, rules and regulations uncertain.
As a result, our efforts to comply with evolving laws, regulations and standards of a U.S. public company are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.
Such clinical trials will be conducted by third parties as well. Failure of such clinical trials to meet their primary endpoints could adversely affect our marketing efforts. Legislative reforms to the United States healthcare system may adversely affect our revenues and business.
Such clinical trials will be conducted by third parties as well. Failure of such clinical trials to meet their primary endpoints could adversely affect our marketing efforts.
As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained, or maintained if obtained. 49 Table of Contents Reimbursement systems in international markets vary significantly by country and by region within some countries, and reimbursement approvals must be obtained on a country-by-country basis.
As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained, or maintained if obtained.
In the event that either Apple or Google ever determines that we are in violation of its standard terms and conditions, including by a new interpretation, and prohibits us from distributing our Dario Smart Diabetes Management application on its storefront, it would materially harm our business. 37 Table of Contents Additionally, we will rely on the continued function of the Apple App Store and the Google Play Store as digital storefronts where our Dario Smart Diabetes Management application may be obtained.
In the event that either Apple or Google ever determines that we are in violation of its standard terms and conditions, including by a new interpretation, and prohibits us from distributing our Dario Management application on its storefront, it would materially harm our business.
We, our manufacturers and suppliers must, unless specifically exempt by regulation, follow the FDA’s Quality System Regulation (“QSR”) and are also subject to the regulations of foreign jurisdictions regarding the manufacturing process.
We, our manufacturers and suppliers must, unless specifically exempt by regulation, follow the FDA’s QSR, as well as similar regulations of foreign jurisdictions regarding the manufacturing process.
We are also subject to numerous post-marketing regulatory requirements, which include labeling regulations and medical device reporting regulations, which may require us to report to different regulatory agencies if our device causes or contributes to a death or serious injury, or malfunctions in a way that would likely cause or contribute to a death or serious injury.
Specifically, the medical device reporting regulations require us to report to different regulatory agencies if our device causes or contributes to a death or serious injury, or malfunctions in a way that would likely cause or contribute to a death or serious injury.
Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal control over financial reporting may have an adverse impact on the price of our common stock.
Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal control over financial reporting may have an adverse impact on the price of our common stock. 80 Table of Contents Anti-takeover provisions in our charter documents and Delaware law could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock and warrants.
If we are unable to redesign our products, develop new products or modify our business model to meet customer desires or any other customer requirements that may emerge, our operating results would be materially adversely affected, and our business might fail. 35 Table of Contents We expect to derive substantially all of our revenues from our principal technology, which leaves us subject to the risk of reliance on such technology.
If we are unable to redesign our products, develop new products or modify our business model to meet customer desires or any other customer requirements that may emerge, our operating results would be materially adversely affected, and our business might fail.
In order to do so, we may need to pay higher compensation or fees to our employees or consultants than we currently expect, and such higher compensation payments would have a negative effect on our operating results. Competition for experienced, high-quality personnel is intense and we cannot assure that we will be able to recruit and retain such personnel.
In order to do so, we may need to pay higher compensation or fees to our employees or consultants than we 64 Table of Contents currently expect, and such higher compensation payments would have a negative effect on our operating results.
Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business.
Although the Israeli government is currently committed to covering the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for damages incurred.
There have been occasions in the past when these digital storefronts were unavailable for short periods of time or where there have been issues with the in-app purchasing functionality within the storefront.
Additionally, we will rely on the continued function of the Apple App Store and the Google Play Store as digital storefronts where our Dario application may be obtained. There have been occasions in the past when these digital storefronts were unavailable for short periods of time or where there have been issues with the in-app purchasing functionality within the storefront.
There is a significant risk that we may be unable to overcome the advantages held by our competition, and our inability to do so could lead to the failure of our business and the loss of your investment. 48 Table of Contents Competition in the digitally supported solutions market and BGMS market is extremely intense, which can lead to, among other things, price reductions, longer selling cycles, lower product margins, loss of market share and additional working capital requirements.
Competition in the digitally supported solutions market and BGMS market is extremely intense, which can lead to, among other things, price reductions, longer selling cycles, lower product margins, loss of market share and additional working capital requirements.
Our Dario Smart Diabetes Management application, which is a key to our business model, is available via Apple’s App Store and via Google’s Android platforms and maybe in the future via additional platforms.
The failure of our online marketing efforts would significantly and negatively impact our ability to generate sales. 60 Table of Contents Our Dario application, which is a key to our business model, is available via Apple’s App Store and via Google’s Android platforms and maybe in the future via additional platforms.
We may not generate the expected benefits of our acquisition of Upright and PsyInnovations, and the integration of these businesses could disrupt our ongoing business, distract our management and increase our expenses. Through our acquisitions of Upright and PsyInnovations, we expanded our product offering to include solutions for MSK as well as behavioral conditions.
We may not generate the expected benefits of our acquisition of Twill, and the integration of this business could disrupt our ongoing business, distract our management and increase our expenses. Through our acquisitions of Twill, we expanded our product offering to include digital-first solutions with a mission to improve users mental and physical health.
None of our other patents have been granted by a patent office. In addition, there are significant risks associated with our actual or proposed intellectual property.
In addition, there are significant risks associated with our actual or proposed intellectual property.
To the extent that any of these negative developments do occur, they may have an adverse effect on our business, our results of operations and our ability to raise additional funds, if deemed necessary by our management and board of directors. Our operations may be disrupted as a result of the obligation of Israeli citizens to perform military service.
If such changes to the judicial system resume and take effect, however, there may be an adverse effect on our business, our results of operations and our ability to raise additional funds. ​ Our operations may be disrupted as a result of the obligation of Israeli citizens to perform military service.
As a result, it is unclear whether and, if so, to what extent our employees may be able to claim compensation with respect to our future revenue. We may receive less revenue from future products if any of our employees successfully claim for compensation for their work in developing our intellectual property, which in turn could impact our future profitability.
As a result, it is unclear whether and, if so, to what extent our employees may be able to claim compensation with respect to our future revenue.
There are a number of federal and state laws protecting the confidentiality of certain patient health information, including patient records, and restricting the use and disclosure of that protected information. In particular, the U.S. Department of Health and Human Services promulgated patient privacy rules under the Health Insurance Portability and Accountability Act of 1996 (which we refer to as HIPAA).
Department of Health and Human Services promulgated patient privacy rules under the Health Insurance Portability and Accountability Act of 1996 (which we refer to as HIPAA).

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe rental agreement will be extended automatically for an additional 60 months following expiration of the initial term. The monthly rent and management services under this lease are approximately $19,140. In December 2017, we signed a lease agreement for our new U.S. headquarters facilities in New York, New York for a monthly rent and management services of approximately $6,557. ​
Biggest changeThe rental agreement will be extended automatically for an additional 60 months following expiration of the initial term. The monthly rent and management services under this lease are approximately $22,400. ​
Item 2. Properties We do not own any real property. Currently, we maintain offices at 8 HaTokhen St., Caesarea Industrial Park, 3088900, Israel. On September 8, 2016, we signed a lease agreement for these facilities for a period of 5 years commencing upon the completion of construction of the new office building. We moved into these offices during November 2017.
Item 2. Properties We do not own any real property. Currently, we maintain offices at 5 Tarshish St., Caesarea Industrial Park, 3088900, Israel. On June 6, 2023, we signed a lease agreement for these facilities for a period of 5 years commencing upon the completion of adjustments of the office space. We moved into these offices during August 2023.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. 55 Table of Contents PART II
Biggest changeMine Safety Disclosures Not applicable. 82 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2022: The following table provides information as of December 31, 2022, with respect to options outstanding under the Company’s Amended and Restated 2012 Equity Incentive Plan (the “2012 Equity Incentive Plan”), the Company’s 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”), and the Company’s other equity compensation arrangements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of securities ​ ​ ​ ​ ​ ​ ​ ​ ​ to be issued upon ​ Weighted-average ​ ​ ​ ​ ​ ​ exercise of ​ exercise price of ​ Number of securities ​ ​ ​ ​ outstanding options, ​ outstanding options, ​ remaining available Plan category ​ Forfeited shares (6) warrants and rights warrants and rights for future issuance Equity compensation plans approved by security holders ​ 119,905 1,918,566 ​ $ 12.88 202,341 Equity compensation plans not approved by security holders (1) ​ ​ 523 ​ $ 2,644.80 — Equity compensation plans not approved by security holders (2) ​ ​ 213 ​ $ 2,502.00 — Equity compensation plans not approved by security holders (3) ​ ​ 135,000 ​ $ 8.41 — Equity compensation plans not approved by security holders (4) ​ ​ 50,000 ​ $ 5.75 — Equity compensation plans not approved by security holders (5) ​ ​ ​ 20,000 ​ $ 18.62 ​ ​ Total ​ 119,905 2,124,302 ​ ​ ​ 202,341 (1) In March 2013, our Board adopted a non-employee director’s remuneration policy.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2023: The following table provides information as of December 31, 2023, with respect to options outstanding under the Company’s Amended and Restated 2012 Equity Incentive Plan (the “2012 Equity Incentive Plan”), the Company’s 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”), and the Company’s other equity compensation arrangements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of securities ​ ​ ​ ​ ​ ​ ​ ​ ​ to be issued upon ​ Weighted-average ​ ​ ​ ​ ​ ​ exercise of ​ exercise price of ​ Number of securities ​ ​ ​ ​ outstanding options, ​ outstanding options, ​ remaining available Plan category ​ Forfeited shares (7) warrants and rights warrants and rights for future issuance Equity compensation plans approved by security holders ​ 143,946 1,987,896 ​ $ 9.59 1,650,197 Equity compensation plans not approved by security holders (1) ​ ​ 433 ​ $ 2,502.00 — Equity compensation plans not approved by security holders (2) ​ ​ 112,500 ​ $ 8.41 — Equity compensation plans not approved by security holders (3) ​ ​ 50,000 ​ $ 5.75 — Equity compensation plans not approved by security holders (4) ​ ​ 20,000 ​ $ 18.62 — Equity compensation plans not approved by security holders (5) ​ ​ ​ 200,000 ​ $ 5.97 ​ — Equity compensation plans not approved by security holders (6) ​ ​ ​ 180,000 ​ ​ 3.93 ​ — Total ​ 143,946 2,550,829 ​ ​ ​ 1,650,197 In March 2013, our Board adopted a non-employee director’s remuneration policy.
One third vest after one year and the balance vest over eight quarterly installments after the first anniversary; these options have a cashless exercise feature and a six-year term. 22,500 options will commence vesting every calendar year for the next four years, commencing in 2021, and only if certain performance milestones were met in the immediately preceding year. 22,500 of these options have expired on each of January 1, 2021, January 1, 2022 and January 1, 2023 as the performance milestones were not met.
One third vest after one year and the balance vest over eight quarterly installments after the first anniversary; these options have a cashless exercise feature and a six-year term. 22,500 options will commence vesting every calendar year for the next four years, commencing in 2021, and only if certain performance milestones were met in the immediately preceding year. 22,500 of these options have expired on each of January 1, 2021, January 1, 2022, January 1, 2023 and January 1, 2024 as the performance milestones were not met.
(3) In July 2021, our Board approved the grant of certain non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired Special Vice President of Market Access.
(4) In July 2021, our Board approved the grant of certain non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired Special Vice President of Market Access.
(2) In March 2020, our Board approved the grant of certain non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired Chief Medical Officer.
(3) In March 2020, our Board approved the grant of certain non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired Chief Medical Officer.
On February 2, 2017 and March 9, 2017, respectively, our Board of Directors and stockholders approved an amendment to the 2012 Equity Incentive Plan increasing the number of shares of common stock available under the plan to 2,373,000.
On February 2, 2017 and March 9, 2017, respectively, our Board of Directors and stockholders approved 84 Table of Contents an amendment to the 2012 Equity Incentive Plan increasing the number of shares of common stock available under the plan to 2,373,000.
(4) 119,905 restricted shares of common stock issued to employees of the company were forfeited, as they were not vested upon certain employee departures. On January 23, 2012, our Board of Directors and a majority of the holders of our then outstanding shares of our common stock adopted our 2012 Equity Incentive Plan (which includes both U.S. and Israeli sub-plans).
(7) 143,946 restricted shares of common stock issued to certain of our employees were forfeited, as they were not vested upon certain employee departures. On January 23, 2012, our Board of Directors and a majority of the holders of our then outstanding shares of our common stock adopted our 2012 Equity Incentive Plan (which includes both U.S. and Israeli sub-plans).
The 2020 Equity Incentive Plan provides that in the event of a change of control event, the Compensation Committee or our Board of Directors shall have the discretion to determine whether and to what extent to accelerate the vesting, exercise or payment of an award.
The 2020 Equity Incentive Plan provides that in the event of a change of control event, the Compensation Committee or our Board of Directors shall have the discretion to determine whether and to what extent to accelerate the vesting, exercise or payment of an award. 85 Table of Contents In addition, our Board of Directors may amend our 2020 Equity Incentive Plan at any time.
Awards previously granted under our 2020 Equity Incentive Plan may not be impaired or affected by any amendment of such without the consent of the affected grantees.
Awards previously granted under our 2020 Equity Incentive Plan may not be impaired or affected by any amendment of such without the consent of the affected grantees. Option Exercises To date, no options have been exercised by our directors or officers.
(1) In January 2020, our Board approved the grant of non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired President and General Manager for North 56 Table of Contents America.
These options have an exercise price of $2,502.00 vest in 4 quarterly installments in arrears, have a cashless exercise feature and a ten-year term. 83 Table of Contents (2) In January 2020, our Board approved the grant of non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired President and General Manager for North America.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is quoted on the Nasdaq Capital Market under the symbol “DRIO”. Our warrants to purchase common stock are quoted on the Nasdaq Capital Market under the symbol “DRIOW”.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is quoted on the Nasdaq Capital Market under the symbol “DRIO”. Record Holders As of March 22, 2024, we had 342 stockholders of record of our common stock.
Record Holders As of March 1, 2023, we had 375 stockholders of record of our common stock. Dividends We have never paid any cash dividends on our common stock. We anticipate that we will retain funds and future earnings to support operations and to finance the growth and development of our business.
Dividends We have never paid any cash dividends on our common stock. We anticipate that we will retain funds and future earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future.
Therefore, we do not expect to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements and other factors that our Board of Directors deems relevant.
Any future determination to pay dividends will be at the discretion of our Board of Directors and will depend on our financial condition, results of operations, capital requirements and other factors that our Board of Directors deems relevant. In addition, the terms of any future debt or credit financings may preclude us from paying dividends.
As of March 57 Table of Contents 3, 2023, there are 2,061,876 shares of Common Stock reserved for issuance thereunder. The Company’s officers and directors are among the persons eligible to receive awards under the 2020 Equity Incentive Plan in accordance with the terms and conditions thereunder.
The Company’s officers and directors are among the persons eligible to receive awards under the 2020 Equity Incentive Plan in accordance with the terms and conditions thereunder.
(2) On May 2014, our Board approved the grant of non-plan options to the Company’s Scientific Advisory Board (“SAB”). These options have an exercise price of $2,502.00 vest in 4 quarterly installments in arrears, have a cashless exercise feature and a ten-year term.
(1) On May 2014, our Board approved the grant of non-plan options to the Company’s Scientific Advisory Board (“SAB”).
The conversion was including accumulative dividends payable available upon conversion of each Series A Preferred Stock. ​ We claimed exemption from registration under the Securities Act of 1933, as amended, or the Securities Act, for the foregoing transactions under Section 4(a)(2) of the Securities Act. ​ Item 6. [Reserved] ​
Unregistered Sales of Equity Securities and Use of Proceeds During the fourth quarter of 2023, we issued an aggregate 30,167 shares of our common stock to certain of our service providers as compensation to them for services rendered. ​ We claimed exemption from registration under the Securities Act of 1933, as amended, or the Securities Act, for the foregoing transactions under Section 4(a)(2) of the Securities Act. ​ Item 6. [Reserved] ​
Removed
In addition, the terms of any future debt or credit financings may preclude us from paying dividends.
Added
(5) In January 2023, our Board approved the grant of certain non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired Senior Vice President of Growth. The options have an exercise price of $5.97 per share, 100,000 options are time based and vest over a three-year period.
Removed
In addition, our Board of Directors may amend our 2020 Equity Incentive Plan at any time.
Added
One third vests after one year and the balance vests over eight quarterly installments after the first anniversary; these options have a cashless exercise feature and a ten-year term.
Removed
Option Exercises To date, no options have been exercised by our directors or officers. 58 Table of Contents Unregistered Sales of Equity Securities and Use of Proceeds During the fourth quarter of 2022, we issued an aggregate 41 , 025 shares of our common stock to certain of our service providers as compensation to them for services rendered. ​ In addition, in November and December 2022, 6,345 of various classes of our Series A Preferred Stock automatically converted into 2,130,322 shares of Common Stock after completing 36-month anniversary of each the series A.
Added
An additional 100,000 options are performance based, and vest over a three-year period. 50,000 performance options will vest upon achieving 2023 or 2024 revenue targets upon the release by the corporation of its annual consolidated financial statements according to GAAP, and 50,000 additional performance options will vest upon achieving 2024 revenue targets.
Added
The entire 100,000 performance options will vest upon achieving 2024 revenue targets if the 2023 revenue target was not achieved. (6) In April 2023, our Board approved the grant of certain non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired Chief Product Officer.
Added
The options have an exercise price of $3.93 per share, 100,000 options are time based and vest over a three-ear period. One third vests after one year and the balance vests over eight quarterly installments after the first anniversary; these options have a cashless exercise feature and a ten-year term.
Added
An additional 80,000 options are performance based, and vest upon achieving personal objective that were set up within sixty days from commencement of employment. The performance-based options expired on January 1, 2024 as the performance milestones were not met.
Added
On January 1, 2024, the number of shares of common stock available under the plan increased to 8,356,624 according to the terms thereof. As of March 22, 2024, there were 1,004,832 shares of Common Stock reserved for issuance thereunder.

Item 7. Management's Discussion & Analysis

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

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Biggest changeGAAP measure to NGFM, as discussed above, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ (in thousands) ​ ​ 2022 2021 $ Change Net Loss Reconciliation ​ ​ ​ ​ Net loss - as reported ​ $ (62,193) ​ $ (76,761) ​ $ 14,568 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustments ​ ​ ​ ​ Depreciation expense ​ 356 ​ 282 ​ 74 Inventory step up amortization ​ ​ — ​ ​ 1,140 ​ ​ (1,140) Amortization of acquired technology and brand ​ ​ 4,481 ​ ​ 3,035 ​ ​ 1,446 Other financial expenses, net ​ ​ 5,379 ​ ​ 235 ​ ​ 5,144 Income Tax ​ 4 ​ 32 ​ (28) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EBITDA ​ (51,973) ​ (72,037) ​ 20,064 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition costs ​ ​ — ​ ​ 880 ​ ​ (880) Earn-out remeasurement ​ ​ (497) ​ (503) ​ 6 Stock-based compensation expenses ​ 16,975 ​ 24,971 ​ (7,996) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-GAAP adjusted loss ​ $ (35,495) ​ $ (46,689) ​ $ 11,194 ​ 65 Table of Contents Liquidity and Capital Resources Our primary source of liquidity is cash generated from equity offerings, implanting a debt facility and from cash flows from our operations.
Biggest changeGAAP measure to NGFM, as discussed above, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ (in thousands) ​ ​ 2023 2022 $ Change Net Loss Reconciliation ​ ​ ​ ​ Net loss - as reported ​ $ (59,427) ​ $ (62,193) ​ $ 2,766 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustments ​ ​ ​ ​ Depreciation expense ​ 473 ​ 356 ​ 117 Amortization of acquired technology and brand ​ ​ 4,512 ​ ​ 4,481 ​ ​ 31 Other financial expenses, net ​ ​ 3,174 ​ ​ 5,379 ​ ​ (2,205) Income tax ​ 64 ​ 4 ​ 60 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EBITDA ​ (51,204) ​ (51,973) ​ 769 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition costs ​ ​ 128 ​ ​ — ​ ​ 128 Earn-out remeasurement ​ ​ — ​ (497) ​ 497 Stock-based compensation expenses ​ 19,701 ​ 16,975 ​ 2,726 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-GAAP adjusted loss ​ $ (31,375) ​ $ (35,495) ​ $ 4,120 ​ Liquidity and Capital Resources The Company has incurred net losses since its inception.
At contract inception, we assess the type of services being provided and assesses the performance obligations in the contract. Revenue is recognized either on a per engaged member per month (PEMPM) or a per employee per month (PEPM) basis.
At contract inception, we assess the type of services being provided and assess the performance obligations in the contract. Revenue is recognized either on a per engaged member per month (PEMPM) or a per employee per month (PEPM) basis.
Research and development expenses consist mainly of payroll expenses to employees involved in research and development activities, expenses related to: (i) our solutions including our Dario Smart Diabetes Management Solution, DarioEngage platform, Dario Move solution and our digital behavioral health solution, (ii) labor contractors and engineering expenses, (iii) depreciation and maintenance fees related to equipment and software tools used in research and development, (iv) clinical trials performed in the United States to satisfy the FDA product approval requirements and (v) facilities expenses associated with and allocated to research and development activities.
Research and development expenses consist mainly of payroll expenses to employees involved in research and development activities, expenses related to: (i) our solutions including our Dario Smart Diabetes Management Solution, 90 Table of Contents DarioEngage platform, Dario Move solution and our digital behavioral health solution, (ii) labor contractors and engineering expenses, (iii) depreciation and maintenance fees related to equipment and software tools used in research and development, (iv) clinical trials performed in the United States to satisfy the FDA product approval requirements and (v) facilities expenses associated with and allocated to research and development activities.
Contractual Obligations Set forth below is a summary of our current obligations as of December 31, 2022 to make future payments due by the period indicated below, excluding payables and accruals. We expect to be able to meet our obligations in the ordinary course.
Contractual Obligations Set forth below is a summary of our current obligations as of December 31, 2023, to make future payments due by the period indicated below, excluding payables and accruals. We expect to be able to meet our obligations in the ordinary course.
Critical Accounting Policies Our consolidated financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Our fiscal year ends December 31. This Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
Critical Accounting Policies Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Our fiscal year ends December 31. This Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
On October 22, 2021, we entered into a Sales Agreement (“Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up 66 Table of Contents to $50,000,000 from time to time through Cowen.
On October 22, 2021, we entered into a Sales Agreement (“Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $50,000,000 from time to time through Cowen.
GAAP, it is required that a deferred tax asset be reduced by a valuation allowance if, based on the weight of available evidence it is more likely than not (a likelihood of more than 50 percent) that some portion 64 Table of Contents or all of the deferred tax assets will not be realized.
GAAP, it is required that a deferred tax asset be reduced by a valuation allowance if, based on the weight of available evidence it is more likely than not (a likelihood of more than 50 percent) that some portion or all of the deferred tax assets will not be realized.
We derive our revenue principally from: Consumers revenue We consider customer and distributers purchase orders to be the contracts with a customer. For each contract, we consider the promise to transfer tangible products and/or services, each of which are distinct, to be the identified performance obligations.
We derive our revenue principally from: Consumers revenue 88 Table of Contents We consider customer and distributers purchase orders to be the contracts with a customer. For each contract, we consider the promise to transfer tangible products and/or services, each of which are distinct, to be the identified performance obligations.
We began our sales in the direct-to-consumer space, solving first for what we deemed the most difficult problems: how to engage users and support behavior change to improve clinical outcomes in diabetes. Our most developed AI tools leverage the direct-to-consumer experience from over 150,000 members to drive superior engagement and outcomes.
We began our sales in the direct-to- 86 Table of Contents consumer space, solving first for what we deemed the most difficult problems: how to engage users and support behavior change to improve clinical outcomes in diabetes. Our most developed AI tools leverage the direct-to-consumer experience from over 150,000 members to drive superior engagement and outcomes.
Inventory and supply chain management remain areas of focus as we balance the need to maintain supply chain flexibility, to help ensure competitive lead times with the risk of inventory obsolescence. During the year ended December 31, 2022, total inventory write-downs expenses amounted to $88,000. Production Lines Capitalization of Costs .
Inventory and supply chain management remain areas of focus as we balance the need to maintain supply chain flexibility, to help ensure competitive lead times with the risk of inventory obsolescence. During the year ended December 31, 2023, total inventory write-downs expenses amounted to $121,000. Production Lines Capitalization of Costs .
As part of the acquisition, Dario issued the Selling Shareholders 1,687,612 shares of the Company’s common stock, and agreed to assume options to purchase up to 100,193 shares of the Company’s common stock, subject to certain escrow and indemnity provisions contained in the Upright Agreement (in the aggregate, the “Consideration Shares”).
As part of the acquisition, we issued the Selling Shareholders 1,687,612 shares of our common stock and agreed to assume options to purchase up to 100,193 shares of our common stock, subject to certain escrow and indemnity provisions contained in the Upright Agreement (in the aggregate, the “Consideration Shares”).
Currently, we are not a party to any ligation that we believe could have a material adverse effect on our business, financial position, results of operations or cash flows. 68 Table of Contents Recently Issued and Adopted Accounting Pronouncements In September 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”).
Currently, we are not a party to any ligation that we believe could have a material adverse effect on our business, financial position, results of operations or cash flows. 96 Table of Contents Recently Issued and Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).
The purchase price per share represents the “Minimum Price” of the Company’s Common Stock pursuant to Nasdaq Rule 5635(d) as of the date of execution of each respective securities purchase agreement.
The purchase price per share represents the “Minimum Price” of the Company’s Common Stock pursuant to Nasdaq Rule 5635(d) as of the date of execution of each respective securities purchase 93 Table of Contents agreement.
The factors described above resulted in net loss attributable to common stockholders of $63,836,000 and $78,766,000 for the year ended December 31, 2022 and 2021, respectively. Non-GAAP Financial Measures To supplement our consolidated financial statements presented in accordance with U.S.
The factors described above resulted in net loss attributable to common stockholders of $63,511,000 and $63,836,000 for the year ended December 31, 2023 and 2022, respectively. Non-GAAP Financial Measures To supplement our consolidated financial statements presented in accordance with U.S.
During the year ended December 31, 2022, we sold 73,037 shares of our common stock under the Sales Agreement for aggregate net proceeds of approximately $260,000. ​ On February 28, 2022, we entered into securities purchase agreements with institutional accredited investors relating to a registered direct offering with respect to the sale of an aggregate of 4,674,454 shares of our common stock and pre-funded warrants to purchase an aggregate of 667,559 shares of our common stock, at a purchase price of $7.49 per share.
During the year ended December 31, 2023, we sold 408,043 shares of our common stock under the Sales Agreement for aggregate net proceeds of approximately $1,614,000. ​ On February 28, 2022, we entered into securities purchase agreements with institutional accredited investors relating to a registered direct offering with respect to the sale of an aggregate of 4,674,454 shares of our common stock and pre-funded warrants to purchase an aggregate of 667,559 shares of our common stock, at a purchase price of $7.49 per share.
All renovations and betterments that extend the economic useful lives of assets and/or improve the performance of the production lines are capitalized. Useful Lives of Assets .
All renovations and betterments that extend the economic useful lives of assets and/or improve the performance of the production lines are capitalized. 89 Table of Contents Useful Lives of Assets .
Revenues generated during the year ended December 31, 2022 were derived mainly from the sale of services to our strategic partners and commercial customers located in the United States. Cost of Revenues During the years ended December 31, 2022 and 2021, we recorded costs related to revenues in the amount of $18,001,000 and $16,550,000, respectively.
Revenues generated during the year ended December 31, 2023, were derived from the sale of services to our strategic partners, commercial customers and consumers located mainly in the United States. Cost of Revenues During the years ended December 31, 2023 and 2022, we recorded costs related to revenues in the amount of $14,368,000 and $18,001,000, respectively.
GAAP) unaudited statement of operations of the revaluation of the warrants and the expense related to stock-based compensation, each as discussed herein above. A reconciliation to the most directly comparable U.S.
GAAP) audited statement of operations of the revaluation of the warrants and the expense related to stock-based compensation, each as discussed herein above. ​ 92 Table of Contents ​ A reconciliation to the most directly comparable U.S.
Readers are cautioned that, according to our management’s estimates, based on our budget and the initial launch of our commercial sales, we believe that we will have sufficient resources to continue our activity only into June 2021 without raising additional capital.
Readers are cautioned that, according to our management’s estimates, based on our budget and the initial launch of our commercial sales, we believe that we will have sufficient resources to continue our activity through 2025 without raising additional capital.
Net operating loss carryforwards As of December 31, 2022, we and WayForward had a U.S. federal net operating loss carryforward of approximately $ 53 ,511, of which $7,491 were generated from tax years 2011-2017 and can be carried forward and offset against taxable income, which expires during the years 2031 to 2037. On December 22, 2017, the U.S.
Net operating loss carryforwards As of December 31, 2023, we and WayForward had a U.S. federal net operating loss carryforward of approximately $44,870, of which $7,491 were generated from tax years 2011-2017 and can be carried forward and offset against taxable income, which expires during the years 2031 to 2037. 91 Table of Contents On December 22, 2017, the U.S.
Our contracts consist of a fixed price that is based on the monthly number of members and clinical programs consumed by each member. The price is determined during contract negotiations with customers. Contracts typically have a duration of more than one year.
Our contracts consist of a fixed price that is based on the monthly number of members and clinical programs consumed by each member. The price is determined during contract negotiations with customers.
Our research and development expenses, excluding stock-based compensation and depreciation, for the year ended December 31, 2022, were $15,995,000 compared to $13,272,000 for the year ended December 31, 2021, an increase of $2,723,000. This increase is mainly as a result of an increase in salaries and software development expenses.
Our research and development expenses, excluding stock-based compensation and depreciation, for the year ended December 31, 2023, were $16,367,000 compared to $15,995,000 for the year ended December 31, 2022, an increase of $372,000. This increase is mainly as a result of an increase in salaries and software development expenses.
Our general and administrative expenses consist mainly of payroll and stock-based compensation expenses for management, employees, directors and consultants, legal and accounting fees, patent registration, expenses related to investor relations, as well as our office rent and related expenses.
This decrease was due to a decrease in, insurance, consulting services, and investor relations expenses. Our general and administrative expenses consist mainly of payroll and stock-based compensation expenses for management, employees, directors and consultants, legal and accounting fees, patent registration, expenses related to investor relations, as well as our office rent and related expenses.
Since inception, we have financed our operations primarily through private placements and public offerings of our common stock and warrants to purchase shares of our common stock, receiving aggregate net proceeds totaling $227,971,000 and a credit facility of $23,786,000 as of December 31, 2022.
Since inception, we have financed our operations primarily through private placements and public offerings of our common stock and warrants to purchase shares of our common stock, receiving aggregate net proceeds totaling $244,392,000 and a credit facility of $25,564,000 as of December 31, 2023.
The increase in gross profit as a percentage of revenue for the year ended December 31, 2022, compared to the year ended December 31, 2021, is due to the increase in revenues derived from sales through our commercial channels.
The decrease in gross profit as a percentage of revenue for the year ended December 31, 2023, compared to the year ended December 31, 2022, is due to the decrease in revenues derived from sales through our strategic partnerships.
This would particularly be the case if we are unable to commercially distribute our products and services in the jurisdictions and in the timeframes we expect. 67 Table of Contents Cash Flows The following tables sets forth selected cash flow information for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2022 ​ 2021 ​ $ ​ $ Cash used in operating activities: ​ (47,845,000) (50,409,000) Cash used in investing activities: ​ (573,000) (8,134,000) Cash provided by financing activities: ​ 61,940,000 65,766,000 ​ ​ 13,522,000 ​ 7,223,000 ​ Net cash used in operating activities Net cash used in operating activities was $47,8 45 ,000 for the year ended December 31, 2022 compared to $50,409,000 used in operations for the same period in 2021.
This would particularly be the case if we are unable to commercially distribute our products and services in the jurisdictions and in the timeframes we expect. ​ 95 Table of Contents Cash Flows The following tables sets forth selected cash flow information for the periods indicated: ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2023 ​ 2022 ​ $ ​ $ Cash used in operating activities: ​ (30,379,000) (47,845,000) Cash used in investing activities: ​ (547,000) (573,000) Cash provided by financing activities: ​ 18,253,000 61,940,000 ​ ​ (12,673,000) ​ 13,522,000 ​ Net cash used in operating activities Net cash used in operating activities was $30,379,000 for the year ended December 31, 2023, compared to $47,845,000 used in operations for the same period in 2022.
Sales and Marketing Our sales and marketing expenses decreased by $9,383,000 to $30,323,000 for the year ended December 31, 2022 compared to $39,706,000 for the year ended December 31, 2021. This decrease was mainly due to the decreases in our digital marketing and payroll related expenses during the year ended December 31, 2022.
Sales and Marketing Our sales and marketing expenses decreased by $6,538,000 to $23,785,000 for the year ended December 31, 2023, compared to $30,323,000 for the year ended December 31, 2022. This decrease was mainly due to the decreases in our digital marketing and payroll related expenses during the year ended December 31, 2023.
Financial expenses, net mainly include bank charges, interest expenses, lease liability and foreign currency translation differences . Income tax Income tax expenses were $4,000 for the year ended December 31, 2022 as compared to $32,000 for the year ended December 31, 2021. Net loss Net loss for the year ended December 31, 2022 was $62,193,000.
Financial expenses, net mainly include bank charges, interest expenses, interest income, and foreign currency translation differences . Income tax Income tax expenses were $64,000 for the year ended December 31, 2023, as compared to $4,000 for the year ended December 31, 2022. Net loss Net loss for the year ended December 31, 2023 was $59,427,000.
During 2018 - 2022, we generated additional $46,020,000 of net operating losses carryforwards which are not subject to the annual limitation described above. Our Israeli subsidiary, Labstyle, have accumulated net operating losses for Israeli income tax purposes as of December 31, 2022 in the amount of approximately $15 0 , 228 ,000.
During 2018 - 2023, we generated additional $37,379,000 of net operating losses carryforwards which are not subject to the annual limitation described above. Our Israeli subsidiary, Labstyle, accumulated net operating losses for Israeli income tax purposes as of December 31, 2023, in the amount of approximately $189,653,000.
Purchasing obligations consists of outstanding purchase orders for materials and services from our vendors. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ (In U.S. dollars thousands) Contractual Obligations Total Less than 1 year 1-3 years ​ Over 4 years Operating Lease Obligations ​ $ 1,204 ​ $ 690 ​ $ 514 ​ $ — Purchasing Obligations ​ 8,551 ​ 8,551 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total contractual cash obligations ​ $ 9,756 ​ $ 9,241 ​ $ 514 ​ $ — ​ Contingencies We account for our contingent liabilities in accordance with ASC 450 “Contingencies“.
Purchasing obligations consists of outstanding purchase orders for materials and services from our vendors. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ (In U.S. dollars thousands) Contractual Obligations Total Less than 1 year 1-3 years ​ Over 4 years Operating Lease Obligations ​ $ 1,271 ​ $ 124 ​ $ 863 ​ $ 284 Purchasing Obligations ​ 4,511 ​ 4,511 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total contractual cash obligations ​ $ 5,782 ​ $ 4,635 ​ $ 863 ​ $ 284 ​ Contingencies We account for our contingent liabilities in accordance with ASC 450 “Contingencies”.
(in its capacity as the representative of the Selling Shareholders), and all holders of Upright’s outstanding securities (the “Selling Shareholders”), entered into a share purchase agreement (the “Upright Agreement”) pursuant to which Dario, through Labstyle, acquired all of the outstanding securities of Upright.
(in its capacity as the representative of the Selling Shareholders), and all holders of Upright’s outstanding securities (the “Selling Shareholders”), entered into a share purchase agreement (the “Upright Agreement”) pursuant to which Dario, through Labstyle, acquired all of the outstanding securities of Upright. The agreement was consummated on February 1, 2021, and Upright now operates as our wholly owned subsidiary.
Research and Development Expenses Our research and development expenses increased by $2,430,000 to $19,649,000 for the year ended December 31, 2022 compared to $ 17,219,000 for the year ended December 31, 2021. This increase was mainly due to the increase in our research and development activities during the year ended December 31, 2022.
Research and Development Expenses Our research and development expenses increased by $599,000 to $20,248,000 for the year ended December 31, 2023, compared to $19,649, 000 for the year ended December 31, 2022. This increase was mainly due to the increase in our payroll expenses during the year ended December 31, 2023.
Gross profit for the year ended December 31, 2022, excluding amortization of acquired technology were $14,012 (50.7% of revenues) compared to $8,069 (39.3% of revenues) during the year ended December 31, 2021.
Gross profit for the year ended December 31, 2023, excluding amortization of acquired technology were $10,370,000 (51.0% of revenues) compared to $14,012,000 (50.7% of revenues) during the year ended December 31, 2022.
Gross Profit Gross profit for the year ended December 31, 2022, amounted to $9,655,000 (34.9% of revenues) compared to $3,963,000 ( 1 9.3% of revenues) for the year ended December 31, 2021.
Gross Profit Gross profit for the year ended December 31, 2023, amounted to $5,984,000 (29.4% of revenues) compared to $9,655,000 (34.9% of revenues) for the year ended December 31, 2022.
Net loss for the year ended December 31, 2021 was $76,761,000. The decrease from 2021 was mainly due to the increase in our gross profit and the decrease in our operating expenses.
Net loss for the year ended December 31, 2022, was $62,193,000. The decrease from 2022 was mainly due to the decrease in our operating and financing expenses.
This includes an amount of anticipated inflows from sales of Dario through direct sales in the United States and through distribution partners. As such, we have a significant present need for capital.
This includes an amount of anticipated inflows from sales of Dario through direct sales in the United States and through distribution partners.
For the Company, the amendments in the update were originally effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10 which delayed the effective date of ASU 2016-13 for smaller reporting companies (as defined by the U.S.
In November 2019, the FASB issued ASU No. 2019-10 which delayed the effective date of ASU 2016-13 for smaller reporting companies (as defined by the SEC) and other non- Securities and Exchange Commission (“SEC”) reporting entities to fiscal years beginning after December 15, 2022, including interim periods within those fiscal periods.
Finance income (expenses), net Our finance expenses, net, increased by $5,144,000 to $5,379,000 for the year ended December 31, 2022 compared to $235,000 financing expenses for the year ended December 31, 2021. The changes in our financial expenses were mainly due to the long-term loan we have received.
Finance expenses, net Our finance expenses, net, decreased by $2,205,000 to $3,174,000 for the year ended December 31, 2023, compared to $5,379,000 financing expenses for the year ended December 31, 2022. The changes in our financial expenses were mainly due to the remeasurement of our long term loan and interest income received.
The Credit Agreement provides for a five-year senior secured credit facility in an aggregate principal amount of up to $50 million (the “Loan Facility”), of which $25 million was made available on the closing date (the “Initial Commitment Amount”) and up to $25 million will be made available on or prior to June 30, 2023, subject to certain revenue requirements (the “Delayed Draw Commitment Amount”).
On June 9, 2022, we entered into a Credit Agreement (the “Credit Agreement”), with OrbiMed Royalty and Credit Opportunities III, LP (“Orbimed”), as the lender for a five-year senior secured credit facility in an aggregate principal amount of up to $50 million (the “Loan Facility”), of which $25 million was made available on the closing date and up to $25 million was to be made available on or prior to June 30, 2023, subject to certain revenue requirements.
The revenues from fixed-price services are recognized ratably over the contract period and the costs associated with these contracts are recognized as incurred. 61 Table of Contents Commercial revenue We provide mobile and web-based digital therapeutics health management programs to employers and health plans for their employees or covered individuals including live clinical coaching, content, automated journeys, hardware, and life-style coaching, currently supporting diabetes, prediabetes and obesity, hypertension, behavioral health (BH) and musculoskeletal health (MSK).
Commercial revenue - B2B2C We provide mobile and web-based digital therapeutics health management programs to employers and health plans for their employees or covered individuals including live clinical coaching, content, automated journeys, hardware, and life-style coaching, currently supporting diabetes, prediabetes and obesity, hypertension, behavioral health (BH) and musculoskeletal health (MSK).
Our general and administrative expenses, excluding stock-based compensation, acquisition costs and depreciation, for the year ended December 31, 2022 were $9,803,000 compared to $8,150,000 for the year ended December 31, 2021, an increase of $1,653,000. This increase was due to an increase in payroll, insurance, consulting services, legal and accounting expenses and investor relations expenses.
The increase was mainly due to an increase in our stock-based compensation, during the year ended December 31, 2023. Our general and administrative expenses, excluding stock-based compensation, acquisition costs and depreciation, for the year ended December 31, 2023, were $8, 663 ,000 compared to $9,803,000 for the year ended December 31, 2022, a decrease of $1, 140 ,000.
Our sales and marketing expenses, excluding stock-based compensation, depreciation and amortization, for the year ended December 31, 2022 were $23,880,000 compared to $33,555,000 for the year ended December 31, 2021, a decrease of $9,675,000.
Our sales and marketing expenses, excluding stock-based compensation, depreciation and amortization, for the year ended December 31, 2023, were $17,146,000 compared to $23,880,000 for the year ended December 31, 2022, a decrease of $6,734,000. This decrease was due to a decrease in our digital marketing, and payroll related expenses.
Cash used in operations increased mainly due to the decrease in our marketing activities. Net cash used in investing activities Net cash used for investing activities was $5 73 ,000 for the year ended December 31, 2022 compared to cash used in investing activities of $8,134,000 for the year ended December 31, 2021.
Cash used in operations decreased mainly due to the decrease in our receivables and inventories, and the decrease in operating and financing expenses. Net cash used in investing activities Net cash used for investing activities was $547,000 for the year ended December 31, 2023, compared to cash used in investing activities of $573,000 for the year ended December 31, 2022.
The increase in revenues for the year ended December 31, 2022, compared to the year ended December 31, 2021, is due to an increase in revenues from sales through our commercial channel .
The decrease in revenues for the year ended December 31, 2023, compared to the year ended December 31, 2022, is due to a decrease in revenues from sales to consumers and our strategic partnerships .
Cash used in investing activities decreased mainly due to the lack of acquisition related cash required in 2022 compared to 2021. Net cash provided by financing activities Net cash provided by financing activities was $61,940,000 for the year ended December 31, 2022 compared to $65,766,000 for the year ended December 31, 2021.
Cash used in investing activities increased mainly due to purchase of property and equipment and investment in short-term bank deposits in 2023 compared to 2022. Net cash provided by financing activities Net cash provided by financing activities was $18,253,000 for the year ended December 31, 2023, compared to $61,940,000 for the year ended December 31, 2022.
In early 2020, we broadened our solutions to include other medical conditions in addition to diabetes, and to serve business customers who seek to improve the health of their stakeholders. Presently, we have deployed solutions for diabetes, hypertension, and pre-diabetes, musculoskeletal (“MSK”) and behavioral health, which conditions will also be powered by our AI-driven behavior change platform.
In early 2020, we broadened our solutions to include other medical conditions in addition to diabetes, and to serve business customers who seek to improve the health of their stakeholders. We also subsequently acquired Upright, PsyInnovations, Physimax Technology, and most recently Twill, to further our platform.
We agreed to pay certain fees with respect to the Loan Facility, including an upfront fee, an unused fee on the undrawn portion of the Loan Facility, an administration fee, a repayment premium and an exit fee, as well as certain other fees and expenses of the Lender.
The Borrowers will pay certain fees with respect to the Loan Facility, including an upfront commitment fee, an administration fee and a prepayment premium, as well as certain other fees and expenses of the Avenue Lenders. ​ On February 15, 2024, we entered into the First Amendment to Loan and Security Agreement and Supplement (the “Avenue Amendment”) with the Avenue Lenders.
If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. 62 Table of Contents Results of Operations Comparison of the Year Ended December 31, 2022 to Year Ended December 31, 2021 Revenues Revenues for the year ended December 31, 2022 amounted to $27,656, 000 compared to $ 20,513 , 000 during the year ended December 31, 2021.
If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
During the year ended December 31, 2022, we raised net proceeds in an amount of approximately $38,288,000 through our March 2022 offering and a net proceeds in an amount of approximately $23,786,000 through our June 2022 Credit Agreement.
During the year ended December 31, 202 3 , we raised net proceeds in an amount of approximately $16,482,000 through our May 2023 offering and net proceeds in an amount of approximately $1,771,000 through the LSA with the Avenue Lenders.
As of December 31, 2022, we had approximately $49,357,000 in cash and cash equivalents compared to $35,808,000 at December 31, 2021. We have experienced cumulative losses of $285,850,000 from inception (August 11, 2011) through December 31, 2022 and have a stockholders’ equity of $79,999,000 at December 31, 2022.
We have experienced cumulative losses of $349, 361 ,000 from inception (August 11, 2011) through December 31, 2023 and have a stockholders’ equity of $96,389,000 at December 31, 2023.
On July 28, 2020, we entered into subscription agreements with accredited investors relating to an offering with respect to the sale of an aggregate of (i) 2,969,266 shares of our common stock, at a purchase price of $7.47 per share, and (ii) pre-funded warrants to purchase 824,689 shares of common stock, at a purchase price of $7.4699 per pre-funded warrant.
On February 15, 2024, we entered into securities purchase agreements (each, a “Series C Purchase Agreement”) with accredited investors relating to an offering (the “Offering”) and the sale of an aggregate of (i) 17,307 shares of newly designated Series C Preferred Stock (the “Series C Preferred Stock”), and (ii) 4,000 shares of Series C-1 Preferred Stock (the “Series C-1 Preferred Stock”), at a purchase price of $1,000 for each share of Preferred Stock.
During the term of the Loan Facility, interest payable in cash by us shall accrue on any outstanding balance due under the Loan Facility at a rate per annum equal to the higher of (x) the adjusted SOFR rate (which is the forward-looking term rate for a one-month tenor based on the secured overnight financing rate administered by the CME Group Benchmark Administration Limited) and (y) 0.50% plus, in either case, 9.50%.
The Borrowers shall repay amounts outstanding under the Loan Facility in full immediately upon an acceleration as a result of an event of default as set forth in the LSA. ​ During the term of the Loan Facility, interest payable in cash by the Borrowers shall accrue on any outstanding balance due under the Loan Facility at a rate per annum equal to the higher of (x) the sum of four one-half percent (4.50%) plus the prime rate as published in the Wall Street Journal and (y) twelve and one-half percent (12.50%).
This decrease was due to a decrease in our digital marketing, and payroll related expenses. 63 Table of Contents Sales and marketing expenses consist mainly of payroll expenses, online marketing campaigns of our service offering, trade show expenses, customer support expenses and marketing consultants, marketing expenses and subcontractors.
Sales and marketing expenses consist mainly of payroll expenses, online marketing campaigns of our service offering, trade show expenses, customer support expenses and marketing consultants, marketing expenses and subcontractors. General and Administrative Expenses Our general and administrative expenses increased by $1,647,000 to $18,140,000 for the year ended December 31, 2023, compared to $16,493,000 for the year ended December 31, 2022.
The increase in cost of revenues was in part due to higher costs related to amortization of acquired technology in the amount of $4,357,000 and $4,106,000 as a result of the acquisitions during 2021 and 2022.
The decrease in cost of revenues was due to the decrease in revenues. Cost of revenues excluding amortization of acquired technology during the year ended December 31, 2023 and 2022, was $10,370,000 and $1 4 , 012 ,000, respectively.
All obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of our and each guarantor's assets.
All obligations under the LSA, and the guarantees of those obligations, are secured by substantially all of our, PsyInnovations’ and the guarantor's assets. Subject to certain milestones set forth in the LSA, the Borrowers shall make monthly payments to the Avenue Lenders of the interest at the then effective rate.
On June 9, 2022, we closed on the Initial Commitment Amount, less certain fees and expenses payable to or on behalf of the Lender. All obligations under the Credit Agreement are guaranteed by all of our wholly owned subsidiaries other than Dario Health Services Private Limited.
As a result of the execution of the LSA and the funding of the Initial Tranche, we satisfied our prior Credit Agreement we previously executed with OrbiMed, on June 9, 2022, and terminated the Credit Agreement with Orbimed. ​ All obligations under the LSA are guaranteed by our wholly owned subsidiary, Labstyle.
Removed
We are currently delivering our solutions to providers, employers, health plans and pharmaceutical companies. We commenced a commercial launch of our free application in the United Kingdom in late 2013 and commenced an initial soft launch of the full Dario solution (including the app and the Dario Blood Glucose Monitoring System) in selected jurisdictions in March 2014.
Added
Presently, we have deployed solutions for diabetes, hypertension, pre-diabetes, MSK and behavioral health, which conditions will also be powered by our AI-driven behavior change platform. We are currently delivering our solutions to providers, employers, health plans and pharmaceutical companies.
Removed
We continued to scale up launch during 2014 in the United Kingdom, the Netherlands and New Zealand, and during 2015 in Australia, Israel and Canada, with the goal of collecting customer feedback to refine 59 Table of Contents our longer-term roll-out strategy.
Added
We continue to achieve key benchmarks as we rapidly scale our B2B2C model, including more than 100 total signed contracts as of today. We believe we have a unique and defensible position in the market thanks to our unique solution origin in consumer markets.
Removed
We are consistently adding new additional features and functionality in making Dario the new standard of care in diabetes data management. Through our Israeli subsidiary, Labstyle, and its subsidiary Upright, our plan of operations is to continue the development of our software and hardware offerings and related technology.
Added
We, along with TWILL Merger Sub, Inc. (“Merger Sub”), Twill and Bilal Khan, solely in his capacity as the representatives of Twill’s stockholders and other equity holders, entered into an Agreement and Plan of Merger (the “Merger Agreement”), dated February 15, 2024 (the “Closing Date”).
Removed
During 2015, we successfully launched the Dario Smart Diabetes Management Solution according to plan and are currently expanding the launch to other jurisdictions. In 2016, we established our direct-to-consumer model in the U.S. to achieve higher and faster penetration into the market during the launch phase.
Added
Pursuant to the provisions of the Merger Agreement, on the Closing Date, (i) Merger Sub was merged with and into Twill (the “Merger”), the separate corporate existence of Merger Sub ceased and Twill continued as the surviving company and a wholly owned subsidiary of the Company, (ii) we paid to Twill’s debt holders and equity holders aggregate consideration (“Merger Consideration”) of (A) $10.0 million in cash, (B) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 10,000,400 shares (the “Warrant Shares”) of our common stock issuable to a trust (the “Trust”) formed for the benefit of certain equity and debt holders of Twill, issuable in 4 equal tranches, (C) stock options to purchase up to 2,963,459 shares of common stock issued to employees of Twill as an inducement to their employment with us, issued outside of our equity compensation plans, pursuant to Nasdaq Rule 5635(c)(4), with an exercise price of $2.55 per share, and (D) a combination of warrants and restricted stock units (“RSUs”) to acquire up to 1,766,508 shares of common stock issued to certain outgoing board members, consultants and outgoing officers of Twill (all of such RSUs and warrants being subject to the approval of the Company’s stockholders, pursuant to Nasdaq Rule 5635), and (iii) the parties to the Merger Agreement consummated the transactions contemplated thereby.
Removed
We have invested in a robust digital marketing department with in-house platforms, experienced personnel and robust infrastructures to support expected growth of users and online subscribers in this market. During the third quarter of 2016 we expanded these efforts to include Australia as well.
Added
The Merger Agreement contains various customary representations, warranties and covenants. As a result of the Merger, Twill will operate as our wholly owned subsidiary.
Removed
In 2017, we expanded our direct-to-consumer marketing efforts in the United Kingdom in cooperation with our local distributor and launched similar marketing efforts in Germany.
Added
The Pre-Funded Warrants are subject to a non-waivable 19.99% ownership blocker and the issuance of any shares of common stock underlying such warrants that are in excess of such amount shall be subject to the approval of our stockholders.
Removed
In support of these goals, we intend to utilize our funds for the following activities: ● ramp up of mass production, marketing and distribution and sales efforts related to the Dario Smart Diabetes Management Solution and the DarioEngage platform; ● develop our customer support and telemarketing services in order to support the expect growth of our revenues and the increase of user, and service provider who will use our platform to better serve people with chronic conditions and improve their clinical outcome; ● continued product and software development, and related activities (including costs associated with application development and data storage capabilities as well as any necessary design modifications to the various elements of the Dario Platform; ● continued work on registration of our patents worldwide; ● Regulatory and quality assurance matters; ● professional fees associated with being a publicly reporting company; and ● general and administrative matters.
Added
In addition, the Company, the Trust and WhiteHawk Capital Partner LP (the “Beneficiary”), have executed a Lock Up/Leak Out Agreement (the “Leak Out Agreement”), pursuant to which until such time as the Trust receives $10,600,000 in aggregate net proceeds (the “Leak Out Period”), (i) the Trust shall only be allowed to sell such Warrant Shares at a rate of up to 10% of the average daily trading volume of the common stock in a manner which will not negatively affect the share price, (ii) all such sales shall be conducted pursuant to Rule 144 and (iii) that the Beneficiary shall not cause the Trust to engage in any short selling of such Warrant Shares during the Leak-Out Period.
Removed
The agreement was consummated on February 1, 2021, and Upright now operates as a wholly owned subsidiary of the Company.
Added
The Company has agreed to seek stockholder approval within 135 days following the closing of the Merger to permit the full exercise of the Pre-Funded Warrants (the “Warrant Vote”). In addition, we entered into voting agreements with certain existing 87 Table of Contents stockholders to vote in favor of the Warrant Vote.
Removed
The Company has also agreed to file a registration statement covering the resale of the shares within ninety (90) days following the Closing Date. In addition, 30% of the Consideration Shares issuable to Upright’s founder, Mr.
Added
We have agreed to call a stockholder meeting each fiscal quarter thereafter to the extent the Warrant Vote is not approved by the Company’s stockholders.
Removed
Oded Cohen, shall be held in a specific holdback retention mechanism, of which 50% shall be released at the lapse of twelve (12) months of retention following the Closing Date, and the balance of 50% shall be released at the lapse of eighteen (18) months of retention following the Closing Date. 60 Table of Contents On February 1, 2021, the Company, through Labstyle, has also agreed to enter into an employment agreement with Mr.
Added
Pursuant to the terms of the Merger Agreement, we also agreed to appoint a new member to our board of directors, nominated by Twill equity holders and subject to such nominee being acceptable to us, within 90 days following the closing of the Merger.
Removed
Cohen, pursuant to which he will serve as General Manager of MSK. In consideration for Mr.
Added
Such appointment right shall continue until the earlier of 540 days following the closing of the Merger, or the date which the Trust exercises its third tranche of Pre-Funded Warrants. In addition, we executed certain consulting agreements (the “Consulting Agreements”) with Ofer Leidner and Bilal Khan, each former officers of Twill.
Removed
Cohen’s duties, he will be entitled to (a) a monthly salary of NIS 63,000, (b) an annual bonus of up to four times his monthly salary, and (c) up to 220,980 shares of restricted stock of the Company, subject to meeting certain key performance metrics. See “Management – Employment Agreements.” On November 25, 2021, Mr.
Added
Pursuant to the terms of the Consulting Agreements, we agreed to retain the services of Messrs. Leidner and Khan for a period of at least 14 months and 6 months respectively, in exchange for monthly consulting fees of $35,416 and $35,417, respectively. In addition, the Company agreed to issue to Mr.

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