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What changed in DarioHealth Corp.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of DarioHealth Corp.'s 2024 and 2025 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 2025 report.

+608 added−878 removedSource: 10-K (2026-03-19) vs 10-K (2025-03-10)

Top changes in DarioHealth Corp.'s 2025 10-K

608 paragraphs added · 878 removed · 364 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

139 edited+84 added−320 removed183 unchanged
Biggest changeDario Flywheel Integrates All These Growth Strategies Our strategy is to integrate all these growth strategies into a united whole through its flywheel as diagramed below, which shows how its B2B and D2C strategies feed one another to create greater value as follows: More B2B Clients : By getting more B2B customers it increases the number of users on the platform, which increases the data collected and used, increases the value to third-party and inhouse virtual clinical care networks, increases cross 11 Table of Contents condition and cross client monetization, such as from behavior health to cardiometabolic health, which increases the average revenue per user, and then increases the D2C users and value.
Biggest changeWe have also found interest among pharmaceutical companies in providing our GLP-1 solution to support patients on their medication in developing healthy habits to improve outcomes. ​ Dario Flywheel Integrates All These Growth Strategies ​ Our strategy is to integrate all these growth strategies into a united whole through its flywheel as diagramed below, which shows how its B2B and D2C strategies feed one another to create greater value as follows: ​ More B2B Clients: By getting more B2B customers it increases the number of users on the platform, which increases the data collected and used, increases the value to third-party and inhouse virtual clinical care networks, increases cross condition and cross client monetization, such as from behavior health to cardiometabolic health, which increases the average revenue per user. ​ More Users: User come from both our B2B and D2C market strategies, which drives our data driven innovation, and our value to virtual human care services. ​ More Value Per User: Data and associated AI, machine learning and analytics is what drives improved personalized user experience, which drives better outcomes, increased trust, more clients, and more users.
De Novo classification requests are subject to user fees, unless a specific exemption applies. Premarket Approval (PMA) . The PMA process is more demanding than the 510(k) and De Novo classification processes.
De Novo classification requests are subject to user fees, unless a specific exemption applies. Premarket Approval . The PMA process is more demanding than the 510(k) and De Novo classification processes.
The California Confidentiality of Medical Information Act (“CMIA”), imposes restrictive requirements regulating the use and disclosure of health information and other personally identifiable information. The California Consumer Privacy Act of 2018 (the “CCPA”) went into effect January 1, 2020.
The California Confidentiality of Medical Information Act (“CMIA”) imposes restrictive requirements regulating the use and disclosure of health information and other personally identifiable information. The California Consumer Privacy Act of 2018 (“CCPA”) went into effect January 1, 2020.
Research indicates that 26.2% of patients discontinue GLP-1s at 3 months, with an additional 30.8 doing so at 6 mots, and 36.5% at 12 months; with only 25% remaining on the medication after two years. Once a patient discontinues use of the GLP-1, the typical patient regained two-thirds of their weight within one year.
Research indicates that 26.2% of patients discontinue GLP-1s at 3 months, with an additional 30.8 doing so at 6 months, and 36.5% at 12 months; with only 25% remaining on the medication after two years. Once a patient discontinues use of the GLP-1, the typical patient regained two-thirds of their weight within one year.
These laws include the following: ● The federal Anti-Kickback Statute (AKS) prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal health care program such as Medicare and Medicaid.
These laws include the following: ● The federal Anti-Kickback Statute (“AKS”) prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal health care program such as Medicare and Medicaid.
Dario Move focuses on improving posture to alleviate pain with its proprietary medical device used with its Dario Move application and virtual coaching. We find that prevalence among employers is nearly 25%.
Dario Move focuses on improving posture to help alleviate pain with its proprietary medical device used with its Dario Move application and virtual coaching. We find that prevalence among employers is nearly 25%.
The GDPR sets out a number of requirements that must be complied with when handling the personal data of such European Union-based data subjects including: providing expanded disclosures about how their personal data will be used; higher standards for organizations to demonstrate that they have obtained valid consent or have another legal basis in place to justify their data processing activities; the obligation to appoint data protection officers in certain circumstances; new rights for individuals to be “forgotten” and rights to data portability, as well as enhanced current rights (e.g. access requests); the principal of accountability and demonstrating compliance through policies, procedures, training and audit; and the new mandatory data breach regime.
The GDPR sets out a number of requirements that must be complied with when handling the personal data of such European Union-based data subjects including: providing expanded disclosures about how their personal data will be used; higher standards for organizations 31 Table of Contents to demonstrate that they have obtained valid consent or have another legal basis in place to justify their data processing activities; the obligation to appoint data protection officers in certain circumstances; new rights for individuals to be “forgotten” and rights to data portability, as well as enhanced current rights (e.g. access requests); the principal of accountability and demonstrating compliance through policies, procedures, training and audit; and the new mandatory data breach regime.
On May 26, 2021, the Medical Devices Regulation, EU 2017/745, (MDR) became effective, repealing and replacing the MDD and the AIMDD. The MDR is directly applicable in all EU member states.
On May 26, 2021, the Medical Devices Regulation, EU 2017/745, (“MDR”) became effective, repealing and replacing the MDD and the AIMDD. The MDR is directly applicable in all EU member states.
The same is generally true for most health plans, which primarily focus on vendors like us to provide chronic and behavioral health solutions to their members. Given this competitive landscape, we differentiate ourself through our integrated whole-person health approach, AI and data-driven personalization, and commitment to user-centric design to deliver industry leading levels of sustained user engagement.
The same is generally true for most health plans, which primarily focus on vendors like us to provide chronic and behavioral health solutions to their members. Given this competitive landscape, we differentiate ourselves through our integrated whole-person health approach, AI and data-driven personalization, and commitment to user-centric design to deliver industry leading levels of sustained user engagement.
The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; 52 Table of Contents ● The Civil Monetary Penalties Law , which prohibits, among other things, the offering or giving of remuneration, which includes, without limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of items or services reimbursable by a federal or state governmental program; ● The HIPAA imposes criminal and civil liability for executing a scheme to defraud any health care benefit program or making false statements relating to health care matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health (“HITECH”) Act, and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● The federal transparency requirements under the Physician Payments Sunshine Act require manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the Center for Medicare and Medicaid Services (“CMS”) information related to payments and other transfers of value to physicians, certain advanced non-physician healthcare practitioners, and teaching hospitals or to entities or individuals at the request of, or designated on behalf of, such physicians, non-physician healthcare practitioners, and teaching hospitals as well as certain ownership and investment interests held by physicians and their immediate family members; and ● Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by nongovernmental third-party payors, including private insurers.
The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; ● The Civil Monetary Penalties Law , which prohibits, among other things, the offering or giving of remuneration, which includes, without limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of items or services reimbursable by a federal or state governmental program; ● The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) imposes criminal and civil liability for executing a scheme to defraud any health care benefit program or making false statements relating to health care matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health (“HITECH”) Act, and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● The federal transparency requirements under the Physician Payments Sunshine Act require manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report, on an annual basis, to the Center for Medicare and Medicaid Services (“CMS”) information related to payments and other transfers of value to physicians, certain advanced non-physician healthcare practitioners, and teaching hospitals or to entities or individuals at the request of, or designated on behalf of, such physicians, non-physician 29 Table of Contents healthcare practitioners, and teaching hospitals as well as certain ownership and investment interests held by physicians and their immediate family members; and ● Analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by nongovernmental third-party payors, including private insurers.
The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches which has led to an increase data breach litigation.
The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches which has led to an increase in data breach litigation.
Under the Federal Trade Commission Act, or FTC Act, the FTC is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; and (c) gather and compile information and conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce.
Under the Federal Trade Commission Act (“FTC Act”), the FTC is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; and (c) gather and compile information and conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce.
Patent No. 8,797,180 in August 2014, and in August2015, we received U.S. patent (No. 9,125,549) that broadened our registered patent No. 8,797,180 to include testing of other bodily fluids through an audio jack connection. We believe these early patents represent critical intellectual property recognition and a significant initial validation of our intellectual property efforts.
Patent No. 8,797,180 in August 2014, and in August 2015, we received U.S. patent (No. 9,125,549) that broadened our registered patent No. 8,797,180 to include testing of other bodily fluids through an audio jack connection. We believe these early patents represent critical intellectual property recognition and a significant initial validation of our intellectual property efforts.
With these two emerging value creation dimensions that are driving competitive advantage, we see the following companies as its primary competitors: Broad-based Digital Health Platforms Companies such as Teladoc Health, Inc. and MDLive, an Evernorth company, offer a full array of integrated virtual care solutions for primary care, chronic and behavioral health.
With these two emerging value creation dimensions that are driving competitive advantage, we see the following companies as their primary competitors: Broad-based Digital Health Platforms Companies such as Teladoc Health, Inc. and MDLive, an Evernorth company, offer a full array of integrated virtual care solutions for primary care, chronic and behavioral health.
Recent surveys of employer’s priorities indicates that they want digital health solutions that have much lower costs that can be broadly deployed among their populations and deliver much higher ROIs than they have accepted in the past. A 2:1 ROI is no longer adequate to meet the needs of employers and health plans.
Recent surveys of employer’s priorities indicate that they want digital health solutions that have much lower costs that can be broadly deployed among their populations and deliver much higher ROIs than they have accepted in the past. A 2:1 ROI is no longer adequate to meet the needs of employers and health plans.
For medium and low risk, class IIb devices and class IIa, Im, Is and Ir devices the transition period is extended until December 31, 2028. In May 2022, the IVDD was replaced by the In Vitro Diagnostic Device Regulation, EU 2017/746, (IVDR) and given a 5-year transition period until its full implementation on May 26, 2022.
For medium and low risk, class IIb devices and class IIa, Im, Is and Ir devices the transition period is extended until December 31, 2028. In May 2022, the IVDD was replaced by the In Vitro Diagnostic Device Regulation, EU 2017/746, (“IVDR”) and given a 5-year transition period until its full implementation on May 26, 2022.
This decision (a) called into question commonly relied upon data transfer mechanisms as between the European Union member states and the United States (such as the Standard Contractual Clauses) and (b) invalidateds the EU-U.S. Privacy Shield on which many companies had relied as an acceptable mechanism for transferring such data from the EU to the United States.
This decision (a) called into question commonly relied upon data transfer mechanisms as between the European Union member states and the United States (such as the Standard Contractual Clauses) and (b) invalidated the EU-U.S. Privacy Shield on which many companies had relied as an acceptable mechanism for transferring such data from the EU to the United States.
Such studies provide the supporting evidence and confidence for us to provide at-risk offerings, performance guarantees, and value-based care. 9 Table of Contents Integrated Whole-Person Digital Health Platform During the past five years, employers, health plans, healthcare providers, and pharmaceutical companies have expressed “point solution fatigue,” and have begun to prune the number of point solutions vendors and instead consolidate their digital health offering with vendors that provide a whole-person portfolio that covers all the major health conditions that drive their healthcare spending.
Such studies provide the supporting evidence and confidence for us to provide at-risk offerings, performance guarantees, and value-based care. ​ Integrated Whole-Person Digital Health Platform ​ During the past five years, employers, health plans, healthcare providers, and pharmaceutical companies have expressed “point solution fatigue,” and have begun to prune the number of point solutions vendors and instead consolidate their digital health offering with vendors that provide a whole-person portfolio that covers all the major health conditions that drive their healthcare spending.
HIPAA applies to health plans, healthcare clearing houses, and healthcare providers that conduct certain healthcare transactions electronically, which are referred to collectively as Covered Entities, as well as individuals or entities that perform services for Covered Entities involving the use, or disclosure of, individually identifiable health information or protected health information (PHI) under HIPAA.
HIPAA applies to health plans, healthcare clearing houses, and healthcare providers that conduct certain healthcare transactions electronically, which are referred to collectively as Covered Entities, as well as individuals or entities that perform services for Covered Entities involving the use, or disclosure of, individually identifiable health information or protected health information (“PHI”) under HIPAA.
The second dimension is driven by economies of scope that increases simplicity by decreasing the number of digital health vendor that deliver an increasingly broad scope of digital health offerings. This simplifies contracting, reporting, value creation, access to users, and the creation of value for users, employers, and health plans.
The second dimension is driven by economies of scope that increases simplicity by decreasing the number of digital health vendors that deliver an increasingly broad scope of digital health offerings. This simplifies contracting, reporting, value creation, access to users, and the creation of value for users, employers, and health plans.
Information about certain clinical studies, including details of the protocol and eventually trial results, also must be submitted within specific timeframes to the National Institutes of Health (NIH), for public dissemination on the ClinicalTrials.gov data registry.
Information about certain clinical studies, including details of the protocol and eventually trial results, also must be submitted within specific timeframes to the National Institutes of Health (“NIH”), for public dissemination on the ClinicalTrials.gov data registry.
Physical Health: Focuses on the prevention, and treatment of physical ailments; primarily cardiometabolic and musculoskeletal conditions. 2. Mental Health: Addresses emotional and psychological well-being, including stress management, as well as clinical anxiety, and depression across all levels of severity. 3. Social and Environmental Factors: Considers influences like socioeconomic status, community resources, housing, and education. 4.
Physical Health: Focuses on the prevention and treatment of physical ailments; primarily cardiometabolic and musculoskeletal conditions. 2. Mental Health: Addresses emotional and psychological well-being, including stress management, as well as clinical anxiety and depression across all levels of severity. 5 Table of Contents 3. Social and Environmental Factors: Considers influences like socioeconomic status, community resources, housing, and education. 4.
However, the FDA may reject the classification request if the agency identifies a suitable legally marketed predicate device that provides a reasonable basis for review of substantial equivalence or determines that the device is not low to moderate risk or that general controls would be inadequate to control the risks and adequate special controls cannot be developed.
However, the FDA may reject the classification request if the agency identifies a suitable legally marketed predicate device that provides a reasonable basis for review of substantial equivalence or determines that the device is not low to moderate risk or that general controls would be inadequate to control the risks 21 Table of Contents and adequate special controls cannot be developed.
To demonstrate compliance with the General Safety and Performance Requirements (GSPRs) set forth in the MDR, medical device manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its classification.
To demonstrate compliance with the General Safety and Performance Requirements (“GSPRs”) set forth in the MDR, medical device manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its classification.
US 11,909,811 B2 titled “ DYNAMIC INTERACTIVE NETWORK SYSTEM FOR PROVIDING ONLINE SERVICE AND SOCIAL COMMUNITY FOR ENGAGING, LEARNING, AND TRAINING SKILLS FOR MENTAL HEALTH”. This patent is a continuation of Patent No. 11,575,737 with additional claims. 57 Table of Contents On August 10, 2023, the United States Patent Office issued Patent No.
US 11,909,811 B2 titled “ DYNAMIC INTERACTIVE NETWORK SYSTEM FOR PROVIDING ONLINE SERVICE AND SOCIAL COMMUNITY FOR ENGAGING, LEARNING, AND TRAINING SKILLS FOR MENTAL HEALTH”. This patent is a continuation of Patent No. 11,575,737 with additional claims. ​ On August 10, 2023, the United States Patent Office issued Patent No.
(“Twill”), began in the D2C market, which has forced us to create what we consider the industry’s most engaging and effective self-care whole-person digital health solutions; and we continue to operate in the D2C market in the U.S. by providing our chronic condition management and patient engagement solutions across many different health conditions.
(“Twill”), began in the D2C market, which has forced us to create what we consider the industry’s most engaging and effective self-care whole-person digital health solutions; and we continue to operate in the D2C market in the U.S. and select international markets by providing our chronic condition management and patient engagement solutions across many different health conditions.
The manufacturers of such devices remaining on the market must comply with specific requirements in the IVDR, but ultimately, such products, as with all new IVDs, will have to undergo the IVDR’s conformity assessment procedures. In addition, the IVDR imposes additional requirements relating to post-market surveillance and submission of post-market performance follow-up reports.
The manufacturers of such devices remaining on the market must comply with specific requirements in the IVDR, but ultimately, such products, as with all new IVDs, will have to undergo the IVDR’s 24 Table of Contents conformity assessment procedures. In addition, the IVDR imposes additional requirements relating to post-market surveillance and submission of post-market performance follow-up reports.
Additionally, a person who knowingly obtains or discloses PHI in violation of HIPAA may face a criminal penalties (including fines and imprisonment), which increase if the wrongful conduct involves false pretenses or the intent to sell, transfer or use PHI for commercial advantage, personal gain or malicious harm.
Additionally, a person who knowingly obtains or discloses PHI in violation of HIPAA may face criminal penalties (including fines and imprisonment), which increase if the wrongful conduct involves false pretenses or the intent 30 Table of Contents to sell, transfer or use PHI for commercial advantage, personal gain or malicious harm.
If satisfied that the AIMD or other medical device conforms to the relevant GSPRs, the Notified Body issues a certificate of conformity, which the manufacturer uses as a basis for its own declaration 47 Table of Contents of conformity. The manufacturer may then apply the CE-Mark to the device, allowing the device to be legally marketed throughout the EU.
If satisfied that the AIMD or other medical device conforms to the relevant GSPRs, the Notified Body issues a certificate of conformity, which the manufacturer uses as a basis for its own declaration of conformity. The manufacturer may then apply the CE-Mark to the device, allowing the device to be legally marketed throughout the EU.
Active Implantable Medical Devices (AIMD) are defined as medical devices that rely on a source of electrical energy or any source of power other than that generated by the body, which are totally or partially introduced, either surgically or medically, into the human body and intended to remain after the procedure.
Active Implantable Medical Device (“AIMD”) are defined as medical devices that rely on a source of electrical energy or any source of power other than that generated by the body, which are totally or partially introduced, either surgically or medically, into the human body and intended to remain after the procedure.
Progress reports detailing the results of the clinical studies must be submitted at least annually to the FDA and more frequently if unanticipated serious adverse events, or SAEs, occur.
Progress reports detailing the results of the clinical studies must be submitted at least annually to the FDA and more frequently if unanticipated serious adverse events, occur.
The FDA issued a Final Rule on February 2, 2024, describing amendments to harmonize the QSR with the 2016 edition of the International Organization for Standardization publication Medical Devices: Quality management systems—Requirements for regulatory purposes (ISO 13485:2016), which will become effective on February 2, 2026.
The FDA issued a Final Rule on February 2, 2024, describing amendments to harmonize the QSR with the 2016 edition of the International Organization for Standardization publication Medical Devices: Quality management systems—Requirements for regulatory purposes (ISO 13485:2016), which became effective on February 2, 2026.
The MDR changed several aspects of the regulatory framework for medical device marketing in Europe in order to increase regulatory oversight of all medical devices marketed in the EU (which, in turn, increased the costs, time and requirements to place innovative or high-risk medical devices on the European market).
The MDR changed several 23 Table of Contents aspects of the regulatory framework for medical device marketing in Europe in order to increase regulatory oversight of all medical devices marketed in the EU (which, in turn, increased the costs, time and requirements to place innovative or high-risk medical devices on the European market).
HIPAA also regulates and standardizes the codes, formats and identifiers used in certain 53 Table of Contents healthcare transactions and standardization of identifiers for health plans and providers, for example insurance billing. Any non-compliance with HIPAA and HITECH and related penalties, could adversely impact our business.
HIPAA also regulates and standardizes the codes, formats and identifiers used in certain healthcare transactions and standardization of identifiers for health plans and providers, for example insurance billing. Any non-compliance with HIPAA and HITECH and related penalties, could adversely impact our business.
The FDA typically issues a decision within 90 days of receipt of a 510(k) 44 Table of Contents submission but may stop the review clock for up to 180 days to request that the applicant respond to the agency’s requests for additional information about the proposed device.
The FDA typically issues a decision within 90 days of receipt of a 510(k) submission but may stop the review clock for up to 180 days to request that the applicant respond to the agency’s requests for additional information about the proposed device.
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.
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 be carried out by a 27 Table of Contents Notified Body.
Information related to the product, patient population, phase of investigation, trial sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Sponsors are also obligated to disclose the results of their clinical studies after completion.
Information related to the product, patient population, phase of 25 Table of Contents investigation, trial sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Sponsors are also obligated to disclose the results of their clinical studies after completion.
We believe that our D2C marketplace roots and continued focus delivers better user experiences, longer sustained engagement, stronger clinical outcomes, at the most affordable prices, that then delivers the highest return on investment (“ROI”) in the industry. Our whole-person health model includes the following five elements: 5 Table of Contents 1.
We believe that our D2C marketplace roots and continued focus delivers better user experiences, longer sustained engagement, stronger clinical outcomes, at the most affordable prices, that then delivers the highest return on investment (“ROI”) in the industry. ​ Our whole-person health model includes the following five elements: ​ 1.
Trademark applications We have also filed several families of trademark applications covering the “Dario” name (wordmark), the Dario name and logo (logo), the Dario logo alone (logo), the DARIO-LITE wordmark, the LABSTYLE INNOVATIONS wordmark, the DARIOHEALTH wordmark, and the DARIOHEALTH logo.
Trademarks We have filed several families of trademark applications covering the “Dario” name (wordmark), the Dario name and logo, the Dario logo alone, the DARIO-LITE wordmark, the LABSTYLE INNOVATIONS wordmark, the DARIOHEALTH wordmark, and the DARIOHEALTH logo.
The PMA process can be expensive, uncertain and lengthy, and each PMA submission is subject to a substantial user fee 45 Table of Contents unless a specific exemption applies. PMA approval may also be granted with post-approval requirements such as the need for additional patient follow-up or requirements to conduct additional clinical trials.
The PMA process can be expensive, uncertain and lengthy, and each PMA submission is subject to a substantial user fee unless a specific exemption applies. PMA approval may also be granted with post-approval requirements such as the need for additional patient follow-up or requirements to conduct additional clinical trials.
Its primary areas of focus are oncology, rare disease, cardiometabolic health, dermatology, and mental health. Dario AI Creating a Hyper-personalized Digital Health Future We are successfully integrating AI to enhance patient care, streamline operations, and drive continuous innovation on its whole-person digital health platform.
Its primary areas of focus are oncology, rare disease, cardiometabolic health, dermatology, and mental health. ​ ​ 13 Table of Contents Dario AI Creating a Hyper-personalized Digital Health Future ​ We are successfully integrating AI to enhance patient care, streamline operations, and drive continuous innovation on our whole-person digital health platform.
Marketing is focused on industry conferences, and highly targeted outreach. 12 Table of Contents Pharmaceutical Sales and Marketing Many pharmaceutical companies work with consultants to identify how they can leverage digital health to complement and provide companion digital health services to support patients on their medications or to find new patients for their medications.
Marketing is focused on industry conferences, and highly targeted outreach. ​ Pharmaceutical Sales and Marketing ​ Many pharmaceutical companies work with consultants to identify how they can leverage digital health to complement and provide companion digital health services to support patients on their medications or to find new patients for their medications.
However, the 21st Century Cures Act, which became law in December 2016, expressly excluded from the FDCA’s device definition some software functions, such as software to support healthcare facility administration, general wellness software, electronic health records and certain clinical decision support software.
However, the 21st Century Cures Act, which became law in December 2016, expressly excluded from the FDCA’s device definition some software functions, such as 22 Table of Contents software to support healthcare facility administration, general wellness software, electronic health records and certain clinical decision support software.
Device user facilities are not required to report device malfunctions that would likely cause or contribute to death or serious injury if the malfunction 50 Table of Contents were to recur but may voluntarily report such malfunctions through MedWatch, the FDA’s Safety Information and Adverse Event Reporting Program.
Device user facilities are not required to report device malfunctions that would likely cause or contribute to death or serious injury if the malfunction were to recur but may voluntarily report such malfunctions through MedWatch, the FDA’s Safety Information and Adverse Event Reporting Program.
For this reason, employers are eager to have their employees engaged in an effective digital behavioral health program while they are on a GLP-1 that will in crease their weight loss while on the medication and keep the weight off after discontinuation by helping the patient develop new, sustainable healthy habits.
For this reason, employers are eager to have their employees engaged in an effective digital behavioral health program while they are on a GLP-1 that will increase their weight loss while on the medication and keep the weight off after discontinuation by helping the patient develop new, sustainable healthy habits and manage side effects.
It also created a new regulatory entity, the California Privacy Protection Agency data protection agency, which is authorized to issue substantive regulations under the CPRA and is expected to result in increased privacy and information 54 Table of Contents security enforcement.
It also created a new regulatory entity, the California Privacy Protection Agency data protection agency, which is authorized to issue substantive regulations under the CPRA and is expected to result in increased privacy and information security enforcement.
However, these companies do not truly compete in the B2B employer, health plan, and pharmaceutical marketplace with 16 Table of Contents competitive comprehensive behavioral and cardiometabolic offerings. As such, we do not see these companies are true competitors.
However, these companies do not truly compete in the B2B employer, health plan, and pharmaceutical marketplace with competitive comprehensive behavioral and cardiometabolic offerings. As such, we do not see these companies are true competitors.
In addition, the trial must be approved by, and conducted under the oversight of, an institutional review board, or IRB, for each clinical site.
In addition, the trial must be approved by, and conducted under the oversight of, an institutional review board (“IRB”), for each clinical site.
Prior to May 26, 2021, all medical devices placed on the EU market had to meet the relevant essential requirements laid down in Council Directive 93/42/EEC, or the Medical Device Directive (MDD), and if applicable, the Council Directive 90/385/EEC, or the Active Implantable Medical Device Directive (AIMD), or for in vitro diagnostic devices, Council Directive 98/79/EC, or the In Vitro Diagnostic Directive (IVDD).
Prior to May 26, 2021, all medical devices placed on the EU market had to meet the relevant essential requirements laid down in Council Directive 93/42/EEC, or the Medical Device Directive (“MDD”), and if applicable, the Council Directive 90/385/EEC, or the Active Implantable Medical Device Directive (“AIMDD”), or for in vitro diagnostic devices, Council Directive 98/79/EC, or the In Vitro Diagnostic Directive (“IVDD”).
This could lead to the loss of current or prospective customers or other business relationships. ​ 55 Table of Contents Intellectual Property Patent applications On May 8, 2011, certain of our founders filed a Patent Cooperation Treaty (“PCT”) Application No.
This could lead to the loss of current or prospective customers or other business relationships. ​ 32 Table of Contents Intellectual Property Granted Patents On May 8, 2011, certain of our founders filed a Patent Cooperation Treaty (“PCT”) Application No.
This is offered through both our D2C and B2B sales channels. In the B2B sales channel, we see prevalence of this condition between 8-10% for most employers and health plans. Studies completed with a top 20 pharmaceutical company using claims data suggested total medical cost savings for patients using this solution reaching $5,000 per year.
In the B2B sales channel, we see prevalence of this condition between 8-10% for most employers and health plans. Studies completed with a top 20 pharmaceutical company using claims data suggested total medical cost savings for patients using this solution reaching $5,000 per year.
Our digital health platform subscription model applies across our various product and therapeutic areas of focus. We have the following product offerings with the engagement platform subscription revenue models: Dario Connect (Well-being) – Our free D2C user engagement offering activates users, educates them, and encourages them to take the next best action on their patient journey.
Our subscription model applies consistently across our products and therapeutic areas. ​ We have the following product offerings with the engagement platform subscription revenue models: ​ Dario Connect (Well-being) – Our free D2C user engagement offering activates users, educates them, and encourages them to take the next best action on their patient journey.
The GDPR applies across the European Union and includes, among other things, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and significant fines for non-compliance.
The General Data Protection Regulation (“GDPR”) applies across the European Union and includes, among other things, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and significant fines for non-compliance.
We find that among employees for most employers, the prevalence of diabetes is about 10%, while hypertension is 35%, and obesity and being overweight is between 35-75%. 10 Table of Contents Dario Connect is offered with Dario Health as a free digital experience that engages users across many different medical conditions.
We find that among employees of most employers, the prevalence of diabetes is about 10%, while hypertension is 35%, and obesity and being overweight is between 35-75%. ​ Dario Connect is offered with Dario Health as a free digital experience that engages users across many different medical conditions within large health plan environments.
All clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s good clinical practice (GCP), regulations, including the investigational device exemption (IDE) regulations that govern investigational device labeling, prohibit promotion of investigational 48 Table of Contents devices, and specify recordkeeping, reporting and monitoring responsibilities of trial sponsors and investigators.
All clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s good clinical practice (“GCP”), regulations, including the investigational device exemption (“IDE”) regulations that govern investigational device labeling, prohibit promotion of investigational devices, and specify recordkeeping, reporting and monitoring responsibilities of trial sponsors and investigators.
These clearances ensure that the proposed products comply with FCC radio frequency emission and power level standards and will not cause interference. State Licensure Requirements Several U.S. states require that Durable Medical Equipment (“DME”) providers be licensed in order to sell products to patients in that state. Certain of these states require that DME providers maintain an in-state location.
These clearances ensure that the proposed products comply with FCC radio frequency emission and power level standards and will not cause interference. ​ 28 Table of Contents State Licensure Requirements Several U.S. states require that Durable Medical Equipment (“DME”) providers be licensed in order to sell products to patients in that state.
Across all these market segments, we power behavior change by providing digital first self-care, complemented with virtual coaching care, and then the optimal level of clinical care delivered through our clinical provider partners to accelerate access to care and improved whole-person health outcomes, at the lowest possible cost.
Across all these market segments, we power behavior change by providing digital first self-care, complemented with virtual coaching care, and then the optimal level of clinical care delivered through our clinical provider partners to accelerate access to care and improved whole-person health outcomes, at the lowest possible cost. ​ Our Growth Strategies ​ We have four core growth strategies that leverage all aspects of our whole-person digital health platform.
We employ curated generative AI models trained on our decade of user journey data on millions of users and large content library to derive proprietary insights not otherwise attainable from publicly available data to drive significant competitive advantages in engagement, clinical and financial outcomes. We apply these insights to the Dario experience to create a sustainable competitive advantage.
We employ curated generative AI models trained on our decade of user journey data on millions of users and large content library to derive proprietary insights not otherwise attainable from publicly available data to drive significant competitive advantages in engagement, clinical and financial outcomes.
The following provides a summary of many of our clinical research findings that support our claims to improving user clinical, health, and economic outcomes. • 28% reduction in depression and anxiety symptoms • 2.0 reduction in A1c • 10% reduction in weight • 10% reduction in blood pressure • 10% improvement in medication adherence • 50% reduction in pain • $2,323 annual medical cost savings from behavioral interventions • $5,077 annual medical cost savings from cardiometabolic interventions ​ Competitive Strengths Our competitive advantage has emerged from our founding roots as a D2C company, that required us to develop the most engaging self-care digital behavioral programs and medical devices.
The following provides a summary of many of our clinical research findings that support our claims to improving user clinical, health, and economic outcomes. ​ ● 28% reduction in depression and anxiety symptoms. ● 2.0 reduction in A1c. ● 10% reduction in weight. ● 10% reduction in blood pressure. ● 10% improvement in medication adherence. ● 50% reduction in pain. ● $2,323 annual medical cost savings from behavioral interventions. ● $5,077 annual medical cost savings from cardiometabolic interventions. ​ Competitive Strengths ​ Our competitive advantage stems from our origins as a D2C company, which requires us to build highly engaging self-care digital behavioral programs and integrated medical devices from the outset.
As of 2024, our eligible user base spans millions of individuals worldwide, supported by partnerships with employers, health plans, pharmaceutical companies, and providers aiming to deliver instant access to the highest quality and most effective self-care and virtual human care that delivers the optimal level of clinical utilization to ensure the best value and outcomes to our users and customers.
As of 2025, our eligible user base spans millions of individuals worldwide, supported by partnerships with employers, health plans, pharmaceutical companies, and providers aiming to deliver instant access to the highest quality and most effective self-care and virtual human care that delivers the optimal level of clinical utilization to ensure the best value and outcomes to our users and customers. ​ Who We Serve ​ We serve four primary market segments that drive our business model.
At the core of our mission and vision is engagement. We believe that most existing digital health solutions in the market fail to deliver improved health outcomes because users are not engaged due to a lack relevance, personalization, consumerization, and longitudinal data and information.
We believe that most existing digital health solutions in the market fail to deliver improved health outcomes because users are not engaged due to a lack relevance, personalization, consumerization, and longitudinal data and information.
As hypertension is one of the most prevalent conditions among adults in the United States, we find that among health plans and employers this solution is useful to 35% or more of their employees and members. This is offered through both our D2C and B2B sales channels.
As hypertension is one of the most prevalent conditions among adults in the United States, we find that among health plans and employers this solution is useful to 35% or more of their employees and members.
Our proprietary datasets span multiple health conditions, providing a unique foundation for developing advanced AI models tailored to real-world patient needs. 25 Years of Cumulative Experience, With Billions of Proprietary Data Points Our AI capabilities are built upon a rich foundation of proprietary data and research, including: • Large available member datasets : Billions of data points from providing its products to over 5 million users over a cumulative 25 years. • Multi-condition focus : Addressing multiple therapeutic areas Cardiometabolic (diabetes, hypertension, weight management), Behavioral Health (stress, anxiety, depression), and musculoskeletal pain with over 75 million physical and behavioral health measurements collected through our medical devices and tens of billions of data points through its applications. • Uniquely matched datasets : Enriched with metadata such as biomedical and behavioral, as well as location, nutrition, and other timely and relevant health information for deeper insights. • Extensive AI research : Over 7 years of AI advancements, including the development of large language models, conversational AI chatbot, and advanced machine learning and deep learning algorithms, delivering over 15 million behavioral health interventions and 25 million digital behavioral health virtual coaching interactions. • Direct access to claims data : Utilized on an anonymized basis in-house to train proprietary models for optimized care delivery and outcomes. • Open architecture : Enabling integration with client-provided care modalities, seamlessly connecting them to Dario’s digital care pathways. 13 Table of Contents Our AI strategy has three primary pillars: 1.
Our proprietary datasets span multiple health conditions, providing a unique foundation for developing advanced AI models tailored to real-world patient needs. ​ 25 Years of Cumulative Experience, With Billions of Proprietary Data Points ​ Our AI capabilities are built upon a rich foundation of proprietary data and research, including: ​ ● Large available member datasets: Billions of data points from providing its products to over 5 million users over a cumulative 25 years. ​ ● Multi-condition focus: Addressing multiple therapeutic areas Cardiometabolic (diabetes, hypertension, weight management), Behavioral Health (stress, anxiety, depression), and musculoskeletal pain with over 75 million physical and behavioral health measurements collected through our medical devices and billions of data points through its applications. ​ ● Uniquely matched datasets: Enriched with metadata such as biomedical and behavioral, as well as location, nutrition, and other timely and relevant health information for deeper insights. ​ ● Extensive AI research: Over 8 years of AI advancements, including the development of large language models, conversational AI chatbot, and advanced machine learning and deep learning algorithms, delivering over 15 million behavioral health interventions and 25 million digital behavioral health virtual coaching interactions. ​ ● Direct access to claims data: Utilized on an anonymized basis in-house to train proprietary models for optimized care delivery and outcomes. ​ ● Open architecture: Enabling integration with client-provided care modalities, seamlessly connecting them to Dario’s digital care pathways. ​ Core AI ​ Capabilities and Applications ​ We deliver measurable commercial value by leveraging AI-driven personalization, human expertise, and connected devices to engage users and drive sustained behavior change across the conditions that matter most to its customers, including diabetes, hypertension, weight management, behavioral health, and musculoskeletal health.
Other intangible assets As the number of Dario users grows, an ever-growing amount of data is being collected from diabetic patients, including their blood sugar levels, meal compositions, routines, physical exercise (intensity and duration) as well as many other factors, and lately also blood pressure data, which are all useful for creating meaningful correlations between these factors and insulin use.
Titled “ Systems and methods for dynamic user interaction for improving mental health”. ​ Other intangible assets As the number of our users grows, an ever-growing amount of data is being collected from patients, including their blood sugar levels, meal compositions, routines, physical exercise (intensity and duration) as well as many other factors, and lately also blood pressure data, which are all useful for creating meaningful correlations between these factors and insulin use.
Due to the success of these drugs in decreasing BMI, there are now nearly 100 drugs in the pipeline among these two pharmaceutical companies and their competitors that address many of the side effects that these drugs have with regards to tolerability, fatigue, and muscle loss.
Due to the success of these drugs in decreasing BMI, there are now nearly 100 drugs in the pipeline among these two pharmaceutical companies and their competitors that address many of the side effects that these drugs have with regards to tolerability, fatigue, and muscle loss. Clinical appropriateness, tolerability, and patient safety guide our GLP-1 support strategy.
We seek to provide solutions to their employees that address the primary areas of health condition focus on by employers for meaningful costs savings that can deliver high and sustainable returns on investment, which can exceed 5:1.
In total, we had 1 67 employer customers in 2025, up from 53 in 2024. We seek to provide solutions to their employees that address the primary areas of health condition focus on by employers for meaningful costs savings that can deliver high and sustainable returns on investment, which can exceed 5:1.
Also, there can be no assurance that the clinical study will provide sufficient evidence to assure 49 Table of Contents regulatory authorities that the product is safe, effective and performs as intended as a prerequisite for granting market clearance. See “Clinical Trials” above for clinical trials performed to date.
Also, there can be no assurance that the clinical study will provide sufficient evidence to assure regulatory authorities that the product is safe, effective and performs as intended as a prerequisite for granting market clearance.
D2C Roots Ensured Highest Levels of Engagement Unlike most of our competitors, we have always operated in the D2C market, and we continue to operate in both the D2C market as well as the B2B market, where the former drives rapid innovation cycles that require accelerated deployment of new features that can then be provided to our B2B customers.
Claims-based analyses of our users demonstrate that we deliver among the highest ROI for customers, including employers, health plans, and pharmaceutical companies. ​ D2C Roots Ensured Highest Levels of Engagement ​ Unlike most of our competitors, we have always operated in the D2C market, and we continue to operate in both the D2C market as well as the B2B market, where the former drives rapid innovation cycles that require accelerated deployment of new features that can then be provided to our B2B customers.
In addition, we are partnering with clinical healthcare provides to provide virtual clinical care to its digital health offerings and virtual coaching.
In addition, we are partnering with clinical healthcare providers to add virtual clinical care to our digital health offerings and virtual coaching.
Among employers, this offering is used to increase access to our product benefits among non-employee dependents, and the payment for this service is included in the subscription for the primary product purchased for the various conditions addressed. For health plans, it provides support to patients across a broad array of medical conditions.
Among employers, this offering is used to increase access to our product benefits among non-employee dependents, and the payment for this service is included in the subscription for the primary product purchased for the various conditions addressed.
The recent introduction of GLP-1 medication has also increased the interest in this solution. We believe that we have demonstrated that our digital self-care solution, with our proprietary weight scale, Dario Health app and virtual coaching, delivers the industry’s highest level of digital self-care weight loss, at 10%, over 12 months.
We believe that we have demonstrated that our digital self-care solution, with our Dario Health app and virtual coaching, delivers the industry’s highest level of digital self-care weight loss, at 10%, over 12 months.
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. 51 Table of Contents Federal Trade Commission Regulatory Oversight Our advertising for our products in the United States is subject to federal truth-in-advertising laws enforced by the Federal Trade Commission (“FTC”), as well as comparable state consumer protection laws.
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.
Users can also get access to our virtual clinic partners and services through Dario Connect. Dario Connect is also the product that we configure for pharmaceutical companies to provide Top of Funnel awareness campaigns to help them find new patients.
Dario Connect is also the product that we configure for pharmaceutical companies to provide Top of Funnel awareness campaigns to help them find new patients.
Our medium-to-large employer market segment is focused on employers with over 1,000 employees and currently includes three of the five largest global technology companies and one of the two largest employers in the United States. In total, we had 53 employer customers in 2024.
These B2B market segments include medium-to-large employers, national and regional health plans, and global pharmaceutical companies. ​ Our medium-to-large employer market segment is focused on employers with over 1,000 employees and currently includes three of the five largest global technology companies and one of the two largest employers in the United States.
Most medium-to-large employers go through a two-to-three-year request for proposal (“RFP”) cycle where they evaluate digital health vendors to select new ones based upon the value of their offering.
This means that it works with brokers and consultants as well as employing a direct sales force. Most medium-to-large employers go through a two-to-three-year request for proposal (“RFP”) cycle where they evaluate digital health vendors to select new ones based upon the value of their offering.
Competition We operate in a highly competitive digital health market, characterized by rapid innovation and evolving consumer expectations. During the past five years, employers and health plans have expressed “point-solution fatigue” and have begun to decrease the number of their point-solution digital health vendors, and to consolidate their digital health vendors among those that provide multiple, integrated offerings.
During the past five years, employers and health plans have expressed “point-solution fatigue” and have begun to decrease the number of their point-solution digital health vendors, and to consolidate their digital health vendors among those that provide multiple, integrated offerings.
Our value proposition with employers is to engage their employees at the highest levels, with effective, evidenced-based behavioral interventions that deliver meaningful clinical outcomes, and show compelling evidence of ROI at twice the industry average. We can contract directly with an employer or enable the employer to leverage their existing health plan benefits to pay for our services.
Our value proposition with employers is to engage their employees at the highest levels, with effective, evidenced-based behavioral interventions that deliver meaningful clinical outcomes, and show compelling evidence of ROI at twice the industry average.
Wearable Technology Firm While we integrate with many wearable technology firm’s devices from companies such as Fitbit, Garmin, and Apple, these companies also provide some D2C offerings that could be considered as competitors to our D2C products.
All these companies primarily focus narrowly on behavioral health rather than multi-condition support. 16 Table of Contents Wearable Technology Firm While we integrate with many wearable technology firm’s devices from companies such as Fitbit, Garmin, and Apple, these companies also provide some D2C offerings that could be considered as competitors to our D2C products.
However, device manufacturers will likely need to revise certain quality system procedures to ensure compliance with the harmonized regulations and any failure to make such revisions or adapt to the harmonized regulations, once they become effective, may result in observations of noncompliance during facility inspections by the FDA or comparable regulatory authorities. 46 Table of Contents 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.
However, device manufacturers will likely need to revise certain quality system procedures to ensure compliance with the harmonized regulations and any failure to make such revisions or adapt to the harmonized regulations, once they become effective, may result in observations of noncompliance during facility inspections by the FDA or comparable regulatory authorities.
Other countries, such as Switzerland, have entered into Mutual Recognition Agreements and allow the marketing of medical devices that meet EU requirements.
The EU rules described below are generally applicable in the European Economic Area (“EEA”). Other countries, such as Switzerland, have entered into Mutual Recognition Agreements and allow the marketing of medical devices that meet EU requirements.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur 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. 84 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.
Biggest changeOur certificate of incorporation and by-laws, among other things: ● 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; ● provide that our Board of Directors or a super-majority of our stockholders (66 2/3%) may amend our bylaws; ● provide the Board of Directors with the exclusive authority to fix the number of directors constituting the whole Board; and ● provide that vacancies on the Board of Directors may be filled by a majority of directors then in office, although less than a quorum.
Reforms implemented under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, (the “ACA”) in the United States, as well as state-level healthcare reform proposals, could reduce medical procedure volumes and impact the demand for medical device products or the prices at which we can sell products.
Reforms implemented under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, (“ACA”) in the United States, as well as state-level healthcare reform proposals, could reduce medical procedure volumes and impact the demand for medical device products or the prices at which we can sell products.
The risks and uncertainties that we face with respect to our pending patent and other proprietary rights principally include the following: ● pending patent applications we have filed or will file may not result in issued patents or may take longer than we expect to result in issued patents; ● we may be subject to interference proceedings; ● we may be subject to opposition proceedings in foreign countries; ● any patents that are issued to us may not provide meaningful protection; ● we may not be able to develop additional proprietary technologies that are patentable; ● other companies may challenge patents licensed or issued to us; ● other companies may have independently developed and/or patented (or may in the future independently develop and patent) similar or alternative technologies, or duplicate our technologies; ● other companies may design their technologies around technologies we have licensed or developed; and ● enforcement of patents is complex, uncertain and very expensive.
The risks and uncertainties that we face with respect to our pending patents and other proprietary rights principally include the following: ● pending patent applications we have filed or will file may not result in issued patents or may take longer than we expect to result in issued patents; ● we may be subject to interference proceedings; ● we may be subject to opposition proceedings in foreign countries; ● any patents that are issued to us may not provide meaningful protection; ● we may not be able to develop additional proprietary technologies that are patentable; ● other companies may challenge patents licensed or issued to us; ● other companies may have independently developed and/or patented (or may in the future independently develop and patent) similar or alternative technologies, or duplicate our technologies; ● other companies may design their technologies around technologies we have licensed or developed; and ● enforcement of patents is complex, uncertain and very expensive.
We cannot be certain that patents will be issued as a result of any of our pending or future applications, or that any of our patents, once issued, will provide us with adequate protection from competing products. For example, issued patents may be circumvented or challenged, declared invalid or unenforceable, or narrowed in scope.
We cannot be certain that patents will be issued as a result of any of our pending or future applications, or that any of our future patents, once issued, will provide us with adequate protection from competing products. For example, issued patents may be circumvented or challenged, declared invalid or unenforceable, or narrowed in scope.
Although we seek to enter into these types of agreements with our contractors, consultants, advisors and research collaborators, to the extent that employees and consultants utilize or independently develop intellectual property in connection with any of our projects, disputes may arise as to the intellectual property rights associated with our technology.
Although we seek to enter into these types of agreements with our employees, contractors, consultants, advisors and research collaborators, to the extent that employees and consultants utilize or independently develop intellectual property in connection with any of our projects, disputes may arise as to the intellectual property rights associated with our technology.
The trading market for our common stock may be influenced by the research and reports that securities or industry analysts may publish about us, our business, our market or our competitors.
The trading market for our common stock may be influenced by research and reports that securities or industry analysts may publish about us, our business, our market or our competitors.
In the event that we lose the continued services of such key personnel for any reason, this could have a material adverse effect on our business, operations, and prospects. If we are not able to attract and retain highly skilled managerial, scientific and technical personnel, we may not be able to implement our business model successfully.
In the event that we lose the continued services of such key personnel for any reason, this could have a material adverse effect on our business, operations, and prospects. If we are unable to attract and retain highly skilled managerial, scientific and technical personnel, we may not be able to implement our business model successfully.
If we raise additional funds through collaborations and licensing arrangements, we may be required to relinquish some rights to our technologies or candidate products, or to grant licenses on terms that are not favorable to us. Funding from any source may be unavailable to us on acceptable terms, or at all.
If we raise additional funds through collaborations and licensing arrangements, we may be required to relinquish some rights to our technologies or products, or to grant licenses on terms that are not favorable to us. Funding from any source may be unavailable to us on acceptable terms, or at all.
We believe that our management team must be able to act decisively to apply and adapt our business model in the rapidly changing markets in which we will compete. In addition, we will rely upon technical and scientific employees or third-party contractors to effectively establish, manage and grow our business.
We believe that our management team must be able to act decisively to apply and adapt our business model in the rapidly changing markets in which we compete. In addition, we rely upon technical and scientific employees or third-party contractors to effectively establish, manage and grow our business.
If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our common stock or trading volume to decline.
If any analyst who cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our common stock or trading volume to decline.
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 HIPAA.
There are a number of federal and state laws protecting the confidentiality of certain patient health and personal 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 HIPAA.
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.
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; 40 Table of Contents ● 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.
It is also possible that others may have or may obtain issued patents that could prevent us from commercializing our products or require us to obtain licenses requiring the payment of significant fees or royalties in order to enable us to conduct our business.
It is also possible that others may have or may obtain issued patents that could prevent us from commercializing future products or require us to obtain licenses requiring the payment of significant fees or royalties in order to enable us to conduct our business.
For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship.
For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our product. Litigation may be necessary to defend against these and other claims challenging inventorship.
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.
If we fail to adequately demonstrate the safety and effectiveness of a product under development, it could delay or prevent regulatory authorization of the device, resulting in delays to commercialization, and could materially harm our business.
If any of the analysts who may cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline.
If any of the analysts who cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline.
Although we have a code of business conduct and ethics, it is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
Although we have a code of conduct, it is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
Any failure by a cyber device manufacturer to comply with applicable cybersecurity requirements is considered a violation of the FDCA and will subject the manufacturer to enforcement actions and possibly legal sanctions.
Any failure by a cyber device manufacturer to comply with applicable cybersecurity requirements is considered a violation of the FDCA and is subject the manufacturer to enforcement actions and possibly legal sanctions.
Consequently, we believe that our future viability will depend largely on our ability to attract and retain highly skilled managerial, sales, scientific and technical personnel.
Consequently, we believe that our future viability will continue to depend largely on our ability to attract and retain highly skilled managerial, sales, scientific and technical personnel.
Additionally, third-party payors and governmental authorities have become increasingly interested in reference pricing systems and publication of discounts and list prices. We are subject to federal, state and foreign laws prohibiting “kickbacks” and false or fraudulent claims, and other fraud and abuse laws, transparency laws, and other healthcare laws and regulations, which, if violated, could subject us to substantial penalties.
Additionally, third-party payors and government authorities have become increasingly interested in reference pricing systems and publication of discounts and list prices. We are subject to federal, state and foreign laws prohibiting “kickbacks” and false or fraudulent claims, and other fraud and abuse laws, transparency laws, and other healthcare laws and regulations, which, if violated, could subject us to substantial penalties.
There can be no assurance that even after such time and expenditures, we will be able to obtain necessary regulatory approvals for clinical testing or for the manufacturing or marketing of any products. In addition, during the regulatory process, other companies may develop other technologies with the same intended use as our products.
There can be no assurance that even after such time and expenditures, we will be able to obtain necessary regulatory approvals for clinical trials or for the manufacturing or marketing of any products. In addition, during the regulatory process, other companies may develop other technologies with the same intended use as our products.
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 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 69 Table of Contents ● criminal prosecution.
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 marketing authorization of new products, new intended uses or modifications to our current or future products; ● suspending or withdrawing marketing authorizations that have already been granted; and ● criminal prosecution.
In the event that another party has also filed a patent application or been issued a patent relating to an invention or technology claimed by us in pending applications, we may be required to participate in 76 Table of Contents an interference proceeding declared by the United States Patent and Trademark Office to determine priority of invention, which could result in substantial uncertainties and costs for us, even if the eventual outcome was favorable to us.
In the event that another party has also filed a patent application or been issued a patent relating to an invention or technology claimed by us in pending applications, we may be required to participate in an interference proceeding declared by the United States Patent and Trademark Office to determine priority of invention, which could result in substantial uncertainties and costs for us, even if the eventual outcome was favorable to us.
Our relationships with customers and third-party payors are subject to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain our sales, marketing and other promotional activities by limiting the kinds of financial arrangements, including sales programs and certain customer and product support programs, we may 73 Table of Contents have with hospitals, physicians or other purchasers of medical devices.
Our relationships with customers and third-party payors are subject to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain our sales, marketing and other promotional activities by limiting the kinds of financial arrangements, including sales programs and certain customer and product support programs, we may have with hospitals, physicians or other purchasers of medical devices.
If a dispute arises, a court may determine that the right belongs to a third party. In addition, enforcement of our rights can be costly and unpredictable. We also rely on trade secrets and proprietary know-how that we seek to protect in part by confidentiality agreements with our employees, contractors, consultants, advisors or others.
If a dispute arises, a court may determine that the right belongs to a third party. In addition, enforcement of our rights can 50 Table of Contents be costly and unpredictable. We also rely on trade secrets and proprietary know-how that we seek to protect in part by confidentiality agreements with our employees, contractors, consultants, advisors or others.
Although we believe that we take reasonable steps to protect our intellectual property, including the use of agreements relating to the non-disclosure of confidential information to third parties, as well as agreements that purport to 77 Table of Contents require the disclosure and assignment to us of the rights to the ideas, developments, discoveries and inventions of our employees and consultants while we employ them, the agreements can be difficult and costly to enforce.
Although we believe that we take reasonable steps to protect our intellectual property, including the use of agreements relating to the non-disclosure of confidential information to third parties, as well as agreements that purport to require the disclosure and assignment to us of the rights to the ideas, developments, discoveries and inventions of our employees and consultants while we employ them, the agreements can be difficult and costly to enforce.
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; 63 Table of Contents ● 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, may make errors in manufacturing that could negatively affect the efficacy or safety of our products 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 our products; ● 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 38 Table of Contents ● 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.
We may be subject to claims challenging the inventorship of our patents and other intellectual property. We may be subject to claims that former employees, collaborators or other third parties have an interest in our patents or other intellectual property as an inventor or co-inventor.
We may be subject to claims challenging the inventorship of our patents and other intellectual property. We may be subject to claims that former employees, collaborators or other third parties have an interest in our patents or other intellectual property as inventors or co-inventors.
Many of these laws create consumer rights including the right to know what personal information is collected, the right to know whether the data is sold or disclosed and to whom, the right to request that a company delete personal information collected, the right to opt-out of the sale of personal information and the right to non-discrimination in terms 74 Table of Contents of price or service when a consumer exercises a privacy right.
Many of these laws create consumer rights including the right to know what personal information is collected, the right to know whether the data is sold or disclosed and to whom, the right to request that a company delete personal information collected, the right to opt-out of the sale of personal information and the right to non-discrimination in terms of price or service when a consumer exercises a privacy right.
These laws include, among others, the federal Anti-Kickback Statute, the federal civil False Claims Act, other federal healthcare false statement and fraud statutes, the Open Payments program under the Physician Payments Sunshine Act, the Civil Monetary Penalties Law, and analogous fraud and abuse and transparency laws in most states, as described in “ Government Regulation—Other U.S.
These laws include, among others, the federal Anti-Kickback Statute, the federal civil False Claims Act, other federal healthcare false statement and fraud statutes, the Open Payments program under the Physician Payments Sunshine Act, the Civil Monetary Penalties Law, and analogous fraud and abuse and transparency laws in most states, as described in “Government Regulation—Other U.S.
There can be no assurance that current levels of reimbursement will not be decreased in the future, or that future legislation, regulation, or reimbursement policies of third parties will not adversely affect the demand for our products and services or our ability to sell products and provide services on a profitable basis.
There can be no assurance that current levels of reimbursement will not be decreased in the future, or that future legislation, regulation, or reimbursement policies of third parties will not adversely affect the demand for our products and services or our ability to sell products and provide 45 Table of Contents services on a profitable basis.
In order for our business to be viable and to compete effectively, we need to develop and maintain, and we will heavily rely on, our proprietary position with respect to our technologies and intellectual property.
In order for our business to be viable and to compete effectively, we need to maintain and continue to develop, and we heavily rely on, our proprietary position with respect to our technologies and intellectual property.
Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws against 80 Table of Contents us or our officers and directors because Israel may not be the most appropriate forum to bring such a claim.
Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws against us or our officers and directors because Israel may not be the most appropriate forum to bring such a claim.
The occurrence of any or all of these risks could adversely affect our international business and, consequently, our results of operations and financial condition. 67 Table of Contents 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. We expect to be exposed to fluctuations in currency exchange rates, which could adversely affect our results of operations.
The harmonization process is not expected to have a significant impact on the quality system compliance operations of device manufacturers because most requirements 72 Table of Contents described in the QSR correspond to requirements set forth in ISO 13485:2016.
The harmonization process is not expected to have a significant impact on the quality system compliance operations of device manufacturers because most requirements described in the QSR correspond to requirements set forth in ISO 13485:2016.
The occurrence of any of these events may have a material adverse effect on our business, financial condition and results of operations. We have conducted limited clinical trials of Dario. Clinical and nonclinical data is susceptible to varying interpretations, which could delay, limit or prevent additional regulatory clearances. To date, we have conducted limited clinical trials on Dario.
The occurrence of any of these events may have a material adverse effect on our business, financial condition and results of operations. We have conducted limited clinical trials of certain of our solutions. Clinical and nonclinical data is susceptible to varying interpretations, which could delay, limit or prevent additional regulatory clearances.
In addition, we and certain of our manufacturers and suppliers are subject to inspection by regulatory authorities to assess regulatory compliance from time to time and may not be able to demonstrate adequate compliance with applicable regulations.
In addition, we and certain of our 44 Table of Contents manufacturers and suppliers are subject to inspection by regulatory authorities to assess regulatory compliance from time to time and may not be able to demonstrate adequate compliance with applicable regulations.
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. 66 Table of Contents 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 on 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.
These factors include, without limitation: ● “short squeezes”; ● comments by securities analysts or other third parties, including blogs, articles, message boards and social and other media; ● large stockholders exiting their position in our securities or an increase or decrease in the short interest in our securities; ● actual or anticipated fluctuations in our financial and operating results; ● changes in foreign currency exchange rates; ● the commencement, enrollment or results of our planned or future clinical trials of our product candidates or those of our competitors; ● the success of competitive drugs or therapies; ● regulatory or legal developments in the United States and other countries; ● the success of competitive products or technologies; ● developments or disputes concerning patent applications, issued patents or other proprietary rights; ● the recruitment or departure of key personnel; ● the level of expenses related to our product candidates or clinical development programs; ● litigation matters, including amounts which may or may not be recoverable pursuant to our officer and director insurance policies, regulatory actions affecting the Company and the outcome thereof; ● the results of our efforts to discover, develop, acquire or in-license additional product candidates; ● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; ● disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; 82 Table of Contents ● significant lawsuits, including patent or stockholder litigation; ● variations in our financial results or those of companies that are perceived to be similar to us; ● market conditions in our market sector; ● general economic, political, and market conditions and overall fluctuations in the financial markets in the United States and abroad; and ● investors’ general perception of us and our business.
These factors include, without limitation: ● “short squeezes”; ● comments by securities analysts or other third parties, including blogs, articles, message boards and social and other media; ● large stockholders exiting their position in our securities or an increase or decrease in the short interest in our securities; ● actual or anticipated fluctuations in our financial and operating results; ● changes in foreign currency exchange rates; ● regulatory or legal developments in the United States and other countries; ● the success of competitive products or technologies; 54 Table of Contents ● developments or disputes concerning patent applications, issued patents or other proprietary rights; ● the recruitment or departure of key personnel; ● the level of expenses related to our products or clinical development programs; ● litigation matters, including amounts which may or may not be recoverable pursuant to our officer and director insurance policies, regulatory actions affecting us and the outcome thereof; ● the results of our efforts to discover, develop, acquire or license additional products; ● actual or anticipated changes in estimates as to financial results and development timelines; ● disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; ● significant lawsuits, including patent or stockholder litigation; ● variations in our financial results or those of companies that are perceived to be similar to us; ● market conditions in our market sector; ● general economic, political, and market conditions and overall fluctuations in the financial markets in the United States and abroad; and ● investors’ general perception of us and our business.
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. 68 Table of Contents 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 currently do, 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.
Department of Health and Human Services (HHS-OIG), CMS, and the Department of Justice, or may be subject to whistleblower lawsuits under federal and state false claims laws. Product liability suits, whether or not meritorious, could be brought against us due to an alleged defective product or for the misuse of Dario or our potential future products.
Department of Health and Human Services (HHS-OIG), CMS, and the Department of Justice, or may be subject to whistleblower lawsuits under federal and state false claims laws. 46 Table of Contents Product liability suits, whether or not meritorious, could be brought against us due to an alleged defective product or for the misuse of our current products or our potential future products.
If such financing is not available on satisfactory terms, or is not available at all, we may be required to delay, scale back or eliminate the development of business opportunities and our operations and financial condition may be materially adversely affected. As of December 31, 2024, we have drawn down $30 million of the credit facility.
If such financing is not available on satisfactory terms, or is not available at all, we may be required to delay, scale back or eliminate the development of business opportunities and our operations and our financial condition may be materially adversely affected. As of December 31, 2025, we have drawn down $32.5 million of the credit facility.
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.
Additionally, we will rely on the continued function of the Apple App Store and the Google Play Store as digital stores where our Dario applications may be obtained. There have been occasions in the past when these digital stores were unavailable for short periods of time or where there have been issues with the in-app purchasing functionality within the store.
Furthermore, the FDA issued a Final Rule on February 2, 2024 describing amendments to harmonize the QSR with ISO 13485:2016, which will become effective on February 2, 2026.
Furthermore, the FDA issued a Final Rule on February 2, 2024 describing amendments to harmonize the QSR with ISO 13485:2016, which became effective on February 2, 2026.
If we fail to comply with these standards, we could be subject to criminal penalties and civil sanctions, including fines and penalties and amounts could be significant. Our employees, independent contractors, consultants, manufacturers and suppliers may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
If we fail to comply with these standards, we could be subject to criminal penalties and civil sanctions, including fines and penalties in amounts that could be significant. 47 Table of Contents Our employees, independent contractors, consultants, manufacturers and suppliers may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
Given our limited revenue and lack of positive cash flow, we will need to raise additional capital, which may be unavailable to us or, even if consummated, may cause dilution or place significant restrictions on our ability to operate.
Risks Related to Our Financial Position and Capital Requirements Given our limited revenue and lack of positive cash flow, we will need to raise additional capital, which may be unavailable to us or, even if consummated, may cause dilution or place significant restrictions on our ability to operate.
Under the FDORA amendments to the FDCA, any application for marketing authorization of the cyber device must include a software bill of materials and a cybersecurity plan describing the methods by which the manufacturer will monitor, identify and address cybersecurity vulnerabilities.
Additionally, under the FDORA amendments to the FDCA, any application for marketing authorization of the cyber device, such as our applications, must include a software bill of materials and a cybersecurity plan describing the methods by which the manufacturer will monitor, identify and address cybersecurity vulnerabilities.
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.
Our internal control over financial reporting may have weaknesses and conditions that could require correction or remediation. The disclosure of these issues could have an adverse impact on the price of our common stock. We have established and are required to maintain appropriate internal control over financial reporting.
In the event that either the Apple App Store or the Google Play Store is unavailable or if in-app purchasing functionality within the storefront is non-operational for a prolonged period of time, it would have a material adverse effect on the ability of our customers to secure the Dario Smart Diabetes Management application, which would materially harm our business.
In the event that either the Apple App Store or the Google Play Store is unavailable or if in-app purchasing functionality within the stores is non-operational for a prolonged period of time, it would have a material adverse effect on the ability of our customers to secure the Dario applications, which would materially harm our business.
Our Dario Blood Glucose Monitoring System is currently designed to be plugged into the Lighting jack for Apple devices or the USB-C jack for other mobile devices. As a result, our products are subject to future technological changes to mobile devices that may occur in the future.
Our products are subject to technological changes which may impact their use. Our Dario Blood Glucose Monitoring System is currently designed to be plugged into the Lightning jack for Apple devices or the USB-C jack for other mobile devices. As a result, our products are subject to future technological changes to mobile devices that may occur in the future.
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, which is our digital health engagement platform. 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, which is our digital health engagement platform.
Outside of the United States, we operate our business internationally, presently in Europe, Australia and Canada. The international operation of our business requires significant management attention, which could negatively affect our business if it diverts their attention from their other responsibilities.
Outside of the United States, we operate our business internationally, presently in Israel and India and offer our products in Europe, Canada, and Mexico. The international operation of our business requires significant management attention, which could negatively affect our business if it diverts their attention from their other responsibilities.
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.
In the event that either Apple or Google ever determines that we are in violation of their standard terms and conditions, including by a new interpretation, and prohibits us from distributing our Dario applications on their store, it would materially harm our business.
If we are found to have violated laws protecting the confidentiality of patient health information, we could be subject to civil or criminal penalties, which could increase our liabilities and harm our reputation or our business. Part of our business plan includes the storage and potential monetization of medical data of users of Dario.
If we are found to have violated laws protecting the confidentiality of patient health information, we could be subject to civil or criminal penalties, which could increase our liabilities and harm our reputation or our business. Part of our business operations includes the handling of medical data of users of our products.
Recent initiatives by the FDA to enhance and modernize various regulatory pathways for device products and its overall approach to safety and innovation in the medical technology industry creates the possibility of changing product development costs, requirements, and other factors and additional uncertainty for our future products and business.
Accordingly, our operating results could suffer. FDA initiatives to enhance and modernize various regulatory pathways for device products and its overall approach to safety and innovation in the medical technology industry create the possibility of changing product development costs, requirements, and other factors and additional uncertainty for our future products and business.
We may also need additional funding for developing products and services, increasing our sales and marketing capabilities, and promoting brand identity, as well as for working capital requirements and other operating and general corporate purposes. Moreover, the regulatory compliance arising out of being a publicly registered company has dramatically increased our costs.
We may also need additional funding for developing products and services, increasing our sales and marketing capabilities, and promoting brand identity, as well as for working capital requirements and other operating and general corporate purposes. Moreover, the regulatory compliance that comes with being a publicly registered company incurs significant costs.
As a publicly reporting company, we are faced with expensive and complicated and evolving disclosure, governance and compliance laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and the Dodd-Frank Act, and, to the extent we complete our anticipated public offering, the rules of the Nasdaq Stock Market.
Our compliance with U.S. regulations concerning corporate governance and public disclosure is expensive. As a public reporting company, we are faced with expensive, complicated, and evolving disclosure, governance and compliance laws, regulations and standards relating to corporate governance and public disclosure, including the Exchange Act, Sarbanes-Oxley Act and the Dodd-Frank Act, and the rules of the Nasdaq Stock Market.
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.
Even though we have received FDA clearance for our blood glucose monitoring system (“BGMS”) product, 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 we are unable to achieve or maintain a good relationship with each of Apple and Google or similar platforms, or if the Apple App Store or the Google Play Store or any other applicable platform were unavailable for any prolonged period of time, our business will suffer.
If we are unable to achieve or maintain a good relationship with each of Apple and Google or similar platforms, or if the Apple App Store or the Google Play Store or any other applicable platform, which we may use in the future, become unavailable for any prolonged period of time, our business will be negatively impacted.
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.
However, there is a risk that our marketing strategy could fail. Because we use non-traditional retail sales tools and rely on healthcare providers to educate our customers about our products, we cannot predict the level of success, if any, that we may achieve by marketing our products via the Internet.
If we are unable to make our Dario Smart Diabetes Management application compatible with these platforms, or if there is any deterioration in our relationship with either Apple or Google or others after our application is available, our business would be materially harmed.
If we are unable to make our Dario applications compatible with these platforms, or if there is any deterioration in our relationship with either Apple or Google or others platforms we may offer our applications on, our business would be materially harmed.
Misusing our device or failing to adhere to the operating guidelines or the device producing inaccurate meter readings could cause significant harm to patients, including death. In addition, if our operating guidelines are found to be inadequate, we may be subject to liability.
Misusing our device or failing to adhere to the operating guidelines or any devices not functioning as intended, could cause significant harm to patients, including death. In addition, if our operating guidelines are found to be inadequate, we may be subject to liability.
Specifically, the U.S. Dollar cost of our operations in Israel is influenced by any movements in the currency exchange rate of the New Israeli Shekel (NIS). Such movements in the currency exchange rate may have a negative effect on our financial results. If the U.S.
Specifically, the U.S. Dollar costs of our operations in Israel and India are influenced by any movements in the currency exchange rate of the New Israeli Shekel (“NIS”) and Indian Rupee, respectively. Such movements in the currency exchange rate may have a negative effect on our financial results. If the U.S.
There can be no assurance that we will successfully complete additional clinical trials necessary to receive additional regulatory approvals in certain jurisdictions.
To date, we have conducted limited clinical trials on certain of our solutions. There can be no assurance that we will successfully complete additional clinical trials necessary to receive additional regulatory approvals in certain jurisdictions.
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.
To date, we have eleven 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. Our other patents were acquired through the acquisitions of other companies.
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. 83 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 55 Table of Contents and a diversion of management time and attention from revenue-generating activities to compliance activities.
Whether or not we are successful in defending against any such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending ourselves against any of these claims or investigations, which could have a material adverse effect on our business, financial condition and results of operations. 75 Table of Contents Risks Related to Our Intellectual Property The failure to obtain or maintain patents, licensing agreements and other intellectual property could materially impact our ability to compete effectively.
Whether or not we are successful in defending against any such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending ourselves against any of these claims or investigations, which could have a material adverse effect on our business, financial condition and results of operations.
The Dario platform 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.
As a result, our customers or end users may experience 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. We may discover significant errors or defects in the future that we may not be able to fix.
In addition to the requirement that sponsors of pivotal trials submit diversity action plans for pivotal trials (see “ Government Regulation—Clinical Trials ”), FDORA included new requirements for cyber devices, defined as any medical device that is or includes software that is validated, installed, or authorized by the manufacturer; can connect to the internet; and may be vulnerable to cybersecurity threats.
The FDORA included new requirements for cyber devices, defined as any medical device that is or includes software that is validated, installed, or authorized by the manufacturer; can connect to the internet; and may be vulnerable to cybersecurity threats.
Risks Related to Our Business There is no assurance that our digital health engagement platform will succeed or be adopted by healthcare providers.
Risks Related to Our Business There is no assurance that our digital health engagement platform will succeed or achieve broad adoption by healthcare providers, employers, health plans or other enterprise customers.
Our future performance depends to a large extent on the continued services of members of our current management including, in particular, Erez Raphael, our Chief Executive Officer and a member of our Board of Directors and Zvi Ben David, our Chief Financial Officer, Treasurer and Secretary.
Our future performance depends largely on the continued services of members of our current management including, in particular, Erez Raphael, our Chief Executive Officer and a member of our Board of Directors, Steven Nelson, our Chief Commercial Officer and President, and Chen Franco-Yehuda, our Chief Financial Officer, Treasurer and Secretary.
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.
If our current products 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.
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.
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 our current or any future product.
The time required to obtain marketing authorization in other countries might differ from that required to obtain FDA clearance or other marketing authorization. Obtaining authorization for a device in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory authorization in one country may negatively impact the regulatory process in others.
Obtaining authorization for a device in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory authorization in one country may negatively impact the regulatory process in others.
Therefore, you should not invest in reliance on your ability to have any control over our company. 81 Table of Contents ​ If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our common stock adversely, the price of our common stock and trading volume could decline.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our common stock adversely, the price of our common stock and trading volume could decline.
We have financed our operations primarily through private placements, public offerings of common stock and certain credit facilities, and have incurred losses in each year since inception including net losses of $42,747,000 and $59,427,000 in 2024 and 2023, respectively. Our accumulated deficit at December 31, 2024 was approximately $390,343,000. We do not know whether or when we will become profitable.
We have financed our operations primarily through private placements, public offerings of common stock and certain credit facilities, and have incurred losses in each year since inception including net losses of $41,714,000 and $42,747,000 in 2025 and 2024, respectively. Our accumulated deficit as of December 31, 2025 was approximately $452,078,000.
For example, the closing sale prices of our Common Stock from January 1, 2024 through December 31, 2024, ranged from a high of $2.55 per share (on February 15, 2024) to a low of $0.65 per share (on December 18, 2024).
For example, the closing sale prices of our common stock from January 1, 2025 through December 31, 2025, ranged from a high of $30.60 per share (on January 7, 2025) to a low of $6.17 per share (on September 18, 2025).
Consequently, we may incur substantial expenses and devote significant management effort and expense in developing customer adoption of our platform which may not result in revenue generation.
We are often faced with lengthy customer evaluation and approval processes associated with the adoption of our digital health engagement platform. Consequently, we incur substantial expenses and devote significant management effort and expense to developing customer adoption of our platform which may not result in revenue generation.
If we fail to achieve appropriate economies of scale or if we fail to manage or anticipate the evolution and demand of the SaaS pricing model, then our business and operating results could be adversely affected. Our results of operations may fluctuate significantly due to the timing of our recognition of SaaS revenues.
If we fail to achieve appropriate economies of scale, or if we fail to anticipate or manage the evolution of SaaS pricing and packaging or customer demand for our SaaS solutions, our revenues, margins and overall operating results could be adversely affected.
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.
Failure to maintain those controls could adversely affect our public disclosures regarding our business, prospects, financial condition or results of operations, which may also raise concerns for investors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSenior management regularly discusses cyber risks and trends and, should they arise, any material incidents with the Audit Committee. ​ 85 Table of Contents Our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
Biggest changeOur business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
A team of dedicated privacy, safety, and security professionals oversees cybersecurity risk management and mitigation, incident prevention, detection, and remediation. Leadership of this team includes professionals with deep cybersecurity expertise, including our Chief Information Security Officer.
A team of dedicated privacy, safety, and security professionals oversees cybersecurity risk management and mitigation, incident prevention, detection, and remediation. Leadership of this team includes professionals with deep cybersecurity expertise, including our Chief Compliance Officer.
Added
Senior management regularly discusses cyber risks and trends and, should they arise, any material incidents with the Audit Committee.

Item 2. Properties

Properties — owned and leased real estate

1 edited+3 added−0 removed1 unchanged
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 $21,800. ​
Biggest changeThe lease 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 $22,195. ​ We also maintain offices at Office Unit, Seventh Floor, IndiQube Unitech Cyber Park, Sector 39, Gurugram, Haryana, India.
Added
On June 1, 2024, we signed a lease agreement for these offices for a period of 2 years. The monthly rent and management services under this lease are approximately $16,790.
Added
On January 2, 2026, we signed a new lease 57 Table of Contents agreement for offices on the fourth floor at Vatika Towers, Golf Course Road, Sector 54, Gurugram, Haryana 122003, India. The lease is for a period of 42 months starting in April 2026.
Added
The existing lease for our offices at IndiQube Unitech Cyber Park will be terminated at that time. The monthly rent, including management services, under the new lease will be approximately $18,900. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeMine Safety Disclosures Not applicable. ​ ​ 86 Table of Contents PART II
Biggest changeMine Safety Disclosures Not applicable. ​ ​ 58 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

20 edited+5 added−18 removed4 unchanged
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2024: The following table provides information as of December 31, 2024, 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 ​ 334,522 5,881,675 ​ $ 3.24 7,583,836 Equity compensation plans not approved by security holders (1) ​ ​ 90,000 ​ $ 8.41 — Equity compensation plans not approved by security holders (2) ​ ​ 50,000 ​ $ 5.75 — Equity compensation plans not approved by security holders (3) ​ ​ 20,000 ​ $ 18.62 — Equity compensation plans not approved by security holders (4) ​ ​ 1,931,074 ​ $ 2.55 — Equity compensation plans not approved by security holders (5) ​ ​ ​ 2,250,000 ​ $ 1.35 ​ — Total ​ 334,522 10,222,749 ​ ​ ​ 7,583,836 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, 2025: The following table provides information as of December 31, 2025, with respect to awards outstanding under the Company’s Amended and Restated 2012 Equity Incentive Plan (the “2012 Equity Incentive Plan”), the Company’s Amended and Restated 2020 Equity Incentive Plan, as amended (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 (4) ​ ​ ​ warrants and rights ​ ​ ​ warrants and rights ​ ​ ​ for future issuance Equity compensation plans approved by security holders ​ 133,208 189,868 ​ $ 51.51 98,927 Equity compensation plans not approved by security holders (1) ​ ​ 2,500 ​ $ 115.00 — Equity compensation plans not approved by security holders (2) ​ ​ 51,900 ​ $ 51.00 — Equity compensation plans not approved by security holders (3) ​ ​ 92,500 ​ $ 27.00 — Total ​ 133,208 336,768 ​ ​ ​ 98,927 In March 2013, our Board adopted a non-employee director’s remuneration policy.
(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.
(1) 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.
(4) In February 2024, 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 the employees of Twill, Inc. The options have an exercise price of $2.55 per share, the options are time based and vest over a two-year period in eight equal amounts.
(2) In February 2024, 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 the employees of Twill. The options have an exercise price of $51.00 per share, the options are time based and vest over a two-year period in eight equal amounts.
These options have a cashless exercise feature and a ten-year term. (5) In June 2024, 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 Commercial Officer.
These options have a cashless exercise feature and a ten-year term. 59 Table of Contents (3) In June 2024, 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 Commercial Officer.
The options have an exercise price of $5.75 per share, and vest over a three-year period with one third vesting after one year and the balance vesting over eight quarterly installments after the first anniversary; these options have a cashless exercise feature and a six-year term.
The options have an exercise price of $115.00 per share, and vest over a three-year period with one third vesting after one year and the balance vesting over eight quarterly installments after the first anniversary; these options have a cashless exercise feature and a six-year term.
In connection with the administration of our 2020 Equity Incentive Plan, our Compensation Committee will: ● determine which employees and other persons will be granted awards under our 2020 Equity Incentive Plan; ● grant the awards to those selected to participate; ● determine the exercise price for options; and ● prescribe any limitations, restrictions and conditions upon any awards, including the vesting conditions of awards.
In connection with the administration of our 2020 Equity Incentive Plan, our Compensation Committee: ● determines which employees and other persons will be granted awards under our 2020 Equity Incentive Plan; ● grants the awards to those selected to participate; ● determines the exercise price for options; and ● prescribes any limitations, restrictions and conditions upon any awards, including the vesting conditions of awards.
The options have an exercise price of $1.35 per share, 500,000 options are time based and vest over a three-year 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.
The options have an exercise price of $27.00 per share, 25,000 options are time based and vest over a three-year 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.
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 3, 2025, we had 328 stockholders of record of our common stock.
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 11 , 2026, we had 41 5 stockholders of record of our common stock.
On September 2, 2020 and October 14, 2020, respectively, our Board of Directors and stockholders 88 Table of Contents approved and adopted the Company’s 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”), reserving for issuance a pool of 900,000 shares of the Company’s common stock under the plan.
On September 2, 2020, and October 14, 2020, respectively, our Board of Directors and stockholders approved and adopted the 2020 Equity Incentive Plan, reserving for issuance a pool of 45,000 shares of the Company’s common stock under the plan.
However, without stockholder approval, our 2020 Equity Incentive Plan may not be amended in a manner that would: ● increase the number of shares that may be issued under such Equity Incentive Plan; ● materially modify the requirements for eligibility for participation in such Equity Incentive Plan; ● materially increase the benefits to participants provided by such Equity Incentive Plan; or ● otherwise disqualify such Equity Incentive Plan for coverage under Rule 16b-3 promulgated under the Exchange Act. 89 Table of Contents 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.
However, without stockholder approval, our 2020 Equity Incentive Plan may not be amended in a manner that would: ● increase the number of shares that may be issued under such 2020 Equity Incentive Plan; ● materially modify the requirements for eligibility for participation in such 2020 Equity Incentive Plan; ● materially increase the benefits to participants provided by such 2020 Equity Incentive Plan; or ● otherwise disqualify such 2020 Equity Incentive Plan for coverage under Rule 16b-3 promulgated under the Exchange Act.
The purpose of our 2020 Equity Incentive Plan is to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in our development and financial achievements The 2020 Equity Incentive Plan will be administered by the Compensation Committee of our Board of Directors or by the full board, which may determine, among other things, the (a) terms and conditions of any option or stock purchase right granted, including the exercise price and the vesting schedule, (b) persons who are to receive options and stock purchase rights and (c) the number of shares to be subject to each option and stock purchase right.
As of March 11, 2026, there were 1,238,177 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 purpose of our 2020 Equity Incentive Plan is to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in our development and financial achievements The 2020 Equity Incentive Plan is administered by the Compensation Committee of our Board of Directors or by the full board, which may determine, among other things, the (a) terms and conditions of any option or stock purchase right granted, including the exercise price and the vesting schedule, (b) persons who are to receive options and stock purchase rights and (c) the number of shares to be subject to each option and stock purchase right.
On January 1, 2021, the number of shares of common stock available under the plan increased to 1,828,890 according to the terms thereof. On June 7, 2021, the number of shares of common stock available under the plan increased to 2,528,890 according to the terms thereof.
On January 1, 2021, the number of shares of common stock available under the plan increased to 91,445 according to the terms thereof. On June 7, 2021, the number of shares of common stock available under the plan increased to 126,445 according to the terms thereof.
The 2020 Equity Incentive Plan will each provide for the grant of (i) ”incentive” options (qualified under section 422 of the Internal Revenue Code of 1986, as amended) to employees of our company and (ii) non-qualified options to directors and consultants of our company.
The 2020 Equity Incentive Plan provides for the grant of (i) ”incentive” options (qualified under section 422 of the Internal Revenue Code of 1986, as amended) to employees of our company and (ii) non-qualified options to directors and consultants of our company, (iii) restricted stock units (“RSUs”), and (iv) other stock-based awards.
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.
Our Compensation Committee: (i) interpret our 2020 Equity Incentive Plan; and (ii) makes all other determinations and actions that may be necessary or advisable to implement and administer our 2020 Equity Incentive Plan. 60 Table of Contents The 2020 Equity Incentive Plan provides that in the event of a change of control, 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.
On January 1, 2022, the number of shares of common stock available under the plan increased to 3,868,514 according to the terms thereof. On January 1, 2023, the number of shares of common stock available under the plan increased to 5,862,860 according to the terms thereof.
On January 1, 2022, the number of shares of common stock available under the plan increased to 193,426 according to the terms thereof. On January 1, 2023, the number of shares of common stock available under the plan increased to 293,143 according to the terms thereof.
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. On June 25, 2024, the number of shares of common stock available under the plan increased to 11,356,624. On January 1, 2025, the numbers of shares of common stock available under the plan increased to 17,897,652.
On January 1, 2024, the number of shares of common stock available under the plan increased to 417,832 according to the terms thereof. On June 25, 2024, the number of shares of common stock available under the plan increased to 567,832. On January 1, 2025, the numbers of shares of common stock available under the plan increased to 894,883.
Unregistered Sales of Equity Securities and Use of Proceeds During the fourth quarter of 2024, we issued an aggregate 418,550 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. ​ Prior Awards to Management ​ On November 4, 2024, our Compensation Committee approved amendments to certain previously issued awards of restricted Common Stock in the aggregate amount of 68,750 and 250,000, respectively, granted to Mr.
Unregistered Sales of Equity Securities and Use of Proceeds During the fourth quarter of 2025, we issued an aggregate 150,000 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 (“Securities Act”), for the foregoing transactions under Section 4(a)(2) of the Securities Act. ​ Item 6. [Reserved] ​
On October 7, 2018 and November 29, 2018, 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 7,873,000.
On January 29, 2026, our stockholders approved an amendment to our 2020 Equity Incentive Plan to increase the number of shares of Common Stock authorized for issuance under the 2020 Equity Incentive Plan by 500,000 shares. In addition to the 2020 Equity Incentive Plan, we also maintain the Amended and Restated 2012 Equity Incentive Plan.
An additional 1,750,000 options are performance based, and vest upon achieving personal objective during the years 2025 to 2028. (6) 334,522 restricted shares of common stock issued to certain of our employees were forfeited, as they were not vested upon certain employee departures.
(4) 133,208 restricted shares of common stock issued to certain of our employees were forfeited, as they were not vested upon certain employee departures.
On December 26, 2019 and February 5, 2020, 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 1,968,650. The 2012 Equity Incentive Plan expired on January 23, 2022.
Under the 2012 Equity Incentive Plan, awards may be granted to our officers, directors, employees and consultants or the officers, directors, employees and consultants of our subsidiary. Pursuant to the 2012 Equity Incentive Plan, the total number of shares of Common Stock authorized for issuance thereunder may not exceed 98,434. The 2012 Equity Incentive Plan expired on January 23, 2022.
Removed
(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 America. The options have an exercise price of $8.41 per share. 90,000 options are time based and vest over a three-year period.
Added
An additional 87,500 options are performance based, and vest upon achieving personal objective during the years 2025 to 2028. During the year ended December 31, 2025, 22,500 performance-based options expired as the applicable objectives were not achieved.
Removed
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 six-year term. An additional 90,000 options are performance based, and vest over a three-year period.
Added
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.
Removed
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- 87 Table of Contents 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.
Added
On May 19, 2025, our Board of Directors, upon the recommendation of the Compensation Committee approved an amended and restated 2020 Equity Incentive Plan, which was approved by the stockholders on July 23, 2025.
Removed
(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.
Added
The principal amendments (i) provide that for each of the calendar years ending on December 31, 2026, December 31, 2027, December 31, 2028, December 31, 2029 and December 31, 2030, the number of shares available under the 2020 Equity Incentive Plan shall be increased by an additional number of shares of Common Stock equal to six percent (6%) of the number of shares of Common Stock issued and outstanding on a Fully Diluted Basis on the immediately preceding December 31; and (ii) authorize the grant of RSU s as a permissible form of award under the 2020 Equity Incentive Plan.
Removed
The options have an exercise price of $18.62 per share, and vest over a three-year period with one third vesting after one year and the balance vesting over eight quarterly installments after the first anniversary; these options have a cashless exercise feature and a ten-year term. The option expired on February 4, 2025 following the departure of the employee.
Added
We may issue awards under the 2012 Equity Incentive Plan up to the amount available under the 2012 Equity Incentive Plan.
Removed
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).
Removed
On January 23, 2012, an Israeli sub-plan was adopted under our 2012 Equity Incentive Plan, which sets forth the terms for the grant of stock awards to Israeli employees or Israeli non-employees. The sub-plan was adopted in accordance with the amended sections 102 and 3(i) of Israel’s Income Tax Ordinance.
Removed
The sub-plan is part of the 2012 Equity Incentive Plan and subject to the same terms and conditions.
Removed
On September 26, 2016 and November 30, 2016, 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 1,873,000 as well as amended the 2012 Equity Incentive Plan to permit grants of shares of common stock.
Removed
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.
Removed
On October 9, 2017 and December 4, 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 3,873,000.
Removed
On March 26, 2018 and May 18, 2018, 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 5,373,000.
Removed
On September 3, 2019 and November 6, 2019, 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 618,650 on a post reverse stock split basis.
Removed
As of March 3, 2025, there were 7,583,836 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.
Removed
Our Compensation Committee will: (i) interpret our 2020 Equity Incentive Plan; and (ii) make all other determinations and take all other action that may be necessary or advisable to implement and administer our 2020 Equity Incentive Plan.
Removed
Option Exercises To date, no options have been exercised by our directors or officers.
Removed
Erez Raphael, our Chief Executive Officer, and Mr.
Removed
Zvi Ben David, our Chief Financial Officer, in the aggregate amount of 23,750 and 125,000, respectively, on May 18, 2022 and March 6, 2024 (collectively, the “Prior Awards”) to permit an immediate acceleration of the unvested portion of the Prior Awards in the event of change in control of the Company ​ Item 6. [Reserved] ​

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) ​ ​ 2024 2023 $ Change Net Loss Reconciliation ​ ​ ​ Net loss - as reported ​ $ (42,747) ​ $ (59,427) ​ $ 16,680 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustments ​ ​ ​ ​ Depreciation and impairment expense ​ 1,327 ​ 473 ​ 854 Amortization of acquired technology, brand and customer relationship ​ ​ 6,100 ​ ​ 4,512 ​ ​ 1,588 Other financial (income) expenses, net ​ (13,145) ​ 3,174 ​ (16,319) Income tax ​ (1,852) ​ 64 ​ (1,916) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EBITDA ​ (50,317) ​ (51,204) ​ 887 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition costs ​ ​ 729 ​ ​ 128 ​ ​ 601 Stock-based compensation expenses ​ 15,796 ​ 19,701 ​ (3,905) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-GAAP adjusted loss ​ $ (33,792) ​ $ (31,375) ​ $ (2,417) ​ ​ Liquidity and Capital Resources (amounts in thousands except for share and share amounts) We have incurred net losses since its inception.
Biggest changeGAAP measure to NGFM, as discussed above, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ (in thousands) ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ Change Net Loss Reconciliation ​ ​ ​ ​ ​ ​ ​ Net loss - as reported ​ $ (41,714) ​ $ (42,747) ​ $ 1,033 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustments ​ ​ ​ ​ ​ ​ Depreciation and impairment expense ​ 307 ​ 1,327 ​ (1,020) Amortization of acquired technology and brand ​ ​ 2,831 ​ ​ 6,100 ​ ​ (3,269) Financial (income) expenses, net ​ ​ 4,954 ​ ​ (13,145) ​ ​ 18,099 Income tax ​ 105 ​ (1,852) ​ 1,957 Acquisition costs ​ ​ — ​ ​ 729 ​ ​ (729) Stock-based compensation expenses ​ 9,365 ​ 15,796 ​ (6,431) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-GAAP adjusted Loss ​ $ (24,152) ​ $ (33,792) ​ $ 9,640 ​ ​ Liquidity and Capital Resources (amounts in thousands except for share and share amounts) As of December 31, 2025, we has incurred recurring losses and negative cash flows from operations since inception and has an accumulated deficit of $452,078 as of December 31, 2025.
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.
As a result of the execution of the LSA and the funding of the Initial Tranche, we satisfied our prior OrbiMed Credit Agreement we previously executed with OrbiMed, on June 9, 2022, and terminated the OrbiMed Credit Agreement with Orbimed. ​ All obligations under the LSA are guaranteed by our wholly owned subsidiary, Labstyle.
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.
The Borrowers will pay certain fees with respect to the Avenue 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.
Pursuant to the Avenue Amendment, the parties agreed to include the Merger Sub and Twill as parties to our existing loan facility with the Avenue Lenders.
Pursuant to the Avenue Amendment, the parties agreed to include the Merger Sub and Twill as parties to our existing Avenue Loan Facility with Avenue Lenders.
In addition, on February 16, 2024, we entered into Series C Purchase Agreements with accredited investors relating to the Offering and the sale of an aggregate of 1,115 shares of Series C-2 Preferred Stock (the “Series C-2 Preferred Stock” and together with the Series C Preferred Stock and the Series C-1 Preferred Stock, the “Series C Preferred Stock”), at a purchase price of $1,000 for each share of preferred stock.
In addition, on February 16, 2024, we entered into Series C Purchase Agreements with accredited investors relating to the Series C Offering and the sale of an aggregate of 1,115 shares of Series C-2 Preferred Stock (the “Series C-2 Preferred Stock” and together with the Series C Preferred Stock and the Series C-1 Preferred Stock, the “Series C Preferred Stock”), at a purchase price of $1,000 for each share of preferred stock.
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.
The Pre-Funded Warrants were 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.
GAAP) audited 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 such as 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.
During an event of default, any outstanding amount under the Loan Facility will bear interest at a rate of 5.00% in excess of the otherwise applicable rate of interest.
During an event of default, any outstanding amount under the Avenue Loan Facility will bear interest at a rate of 5.00% in excess of the otherwise applicable rate of interest.
Pursuant to the Third Avenue Amendment, the parties agreed to (i) amend the potential interest only period under the loan facility such that the existing interest only period ending on April 30, 2024 was extended by a period of six months provided that we net certain proceeds from an equity financing on or before March 31, 2025 in the aggregate; (ii) an additional sixth month interest only extension period was added, which is conditioned on our achieving a multi-million dollar net revenue milestone, with cash burn not to exceed a certain multi-million dollar level, for the trailing six month period ending September 30, 2025; (iii) the interest only period may not exceed a total of 36 months from the closing of the loan as of May 1, 2023; and (iv) the maturity date of the loan will be extended from May 1, 2027 to November 1, 2027, provided that we meet the foregoing amended milestones. ​ In addition, the Third Avenue Amendment provides (i) that we will seek stockholder approval to reprice the warrants issued to the Avenue Lenders on May 1, 2023 to permit an amendment to the exercise price of such warrants to the “minimum price” as defined by Nasdaq rules as of the closing of the Avenue Amendment (or $0.7208 per share) and (ii) permit the Avenue Lenders, subject to Nasdaq rules, to convert up to two million of the principal amount of its loan to us at a conversion price of $0.8650 per share.
Pursuant to the Third Avenue Amendment, the parties agreed to (i) amend the potential interest only period under the Avenue Loan Facility such that the existing interest only period ending on April 30, 2024 was extended by a period of six months provided that we net certain proceeds from an equity financing on or before March 31, 2025 in the aggregate; (ii) an additional sixth month interest only extension period was added, which is conditioned on our achieving a multi-million dollar net revenue milestone, with cash burn not to exceed a certain multi-million dollar level, for the trailing six month period ending September 30, 2025; (iii) the interest only period may not exceed a total of 36 months from the closing of the loan as of May 1, 2023; and (iv) the maturity date of the loan will be extended from May 1, 2027 to November 1, 2027, provided that we meet the foregoing amended milestones. ​ In addition, the Third Avenue Amendment provides (i) that we will seek stockholder approval to reprice the warrants issued to the Avenue Lenders on May 1, 2023 to permit an amendment to the exercise price of such warrants to the “minimum price” as defined by Nasdaq rules as of the closing of the Avenue Amendment (or $14.416 per share) and (ii) permit the Avenue Lenders, subject to Nasdaq rules, to convert up to two million of the principal amount of its loan to us at a conversion price of $17.30 per share.
In addition, the Avenue Amendment provides (i) that we will seek stockholder approval to reprice the warrants issued to the lenders on May 1, 2023 to permit an amendment to the exercise price of such warrants to the “minimum price” as defined by Nasdaq rules as of the closing of the Twill Agreement and (ii) permit the Avenue Lenders, subject to Nasdaq rules, to convert up to two million of the principal amount of its loan to us at a conversion price of $4.001 per share. ​ On December 16, 2024, we entered into the Third Amendment to Loan and Security Agreement and Supplement (the “Third Avenue Amendment”) with Avenue Lenders.
In addition, the Avenue Amendment provides (i) that we will seek stockholder approval to reprice the warrants issued to the lenders on May 1, 2023 to permit an amendment to the exercise price of such warrants to the “minimum price” as defined by Nasdaq rules as of the closing of the Twill Agreement and (ii) permit the Avenue Lenders, subject to Nasdaq rules, to convert up to two million of the principal amount of its loan to us at a conversion price of $80.02 per share. ​ On December 16, 2024, we entered into the Third Amendment to Loan and Security Agreement and Supplement (the “Third Avenue Amendment”) with Avenue Lenders.
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%) 98 Table of Contents plus the prime rate as published in the Wall Street Journal and (y) twelve and one-half percent (12.50%).
The Borrowers shall repay amounts outstanding under the Avenue 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 Avenue Loan Facility, interest payable in cash by the Borrowers shall accrue on any outstanding balance due under the Avenue 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%).
Certain of our contracts include client performance guarantees and a portion of the fees in those contracts are subject to performance-based metrics such as clinical outcomes or minimum member utilization rate.
Certain of our contracts include client performance guarantees and a portion of the fees in those contracts are subject to performance-based metrics such as clinical outcomes or minimum member utilization rates.
You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
You should review the “Risk Factors” section of this Annual Report for a discussion of important factors 61 Table of Contents that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
We include in the transaction price some or all of an amount of variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
The Company includes in the transaction price some or all of an amount of variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
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”).
(“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”).
In addition, the shares issued are subject to the terms of a lock-up agreement, pursuant to which the Selling Shareholders (subject to certain exceptions) have agreed to restrict their ability to transfer their shares as follows: (i) shares representing 20% of their respective Consideration Shares will be restricted from transfer for a period of one hundred and eighty (180) days from the date of the closing of the acquisition, (ii) shares representing 30% of their respective Consideration Shares will be restricted from transfer for a period of two hundred and seventy (270) days from the closing date, (iii) shares representing 30% of their respective Consideration Shares will be restricted from transfer for a period of three hundred and sixty (360) days from the closing date and (iv) shares representing 20% of their respective Consideration Shares will be restricted from transfer for a period of four hundred and fifty (450) days from the closing date.
In addition, the shares issued are subject to the terms of a lock-up agreement, pursuant to which the Selling Shareholders (subject to certain exceptions) have agreed to restrict their ability to transfer their shares as follows: (i) shares representing 20% of their respective Consideration Shares will be restricted from transfer for a period of one hundred and eighty (180) days from the date of the closing of the acquisition, (ii) shares representing 30% of their respective Consideration Shares will be restricted from transfer for a period of two hundred and seventy (270) days from the closing date, (iii) shares representing 30% of their respective Consideration Shares will be restricted from transfer for a period of three hundred and sixty (360) days from the closing date and (iv) shares representing 20% of their respective Consideration Shares will be restricted from transfer for a period of four hundred and fifty (450) days from the closing date. 62 Table of Contents We, along with Twill Merger Sub, Inc.
Asset acquisition-related direct costs are capitalized as part of the asset or assets acquired Results of Operations Comparison of the Year Ended December 31, 2024 to Year Ended December 31, 2023 (dollar amounts in thousands) Revenues Revenues for the year ended December 31, 2024, amounted to $27,040 compared to $20,352 during the year ended December 31, 2023.
Asset acquisition-related direct costs are capitalized as part of the asset or assets acquired Results of Operations Comparison of the Year Ended December 31, 2025 to Year Ended December 31, 2024 (dollar amounts in thousands) Revenues Revenues for the year ended December 31, 2025, amounted to $22,359 compared to $27,040 during the year ended December 31, 2024.
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.
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 500,020 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 148,173 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 $51.00 per share, and (D) a combination of warrants and RSUs to acquire up to 88,326 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.
The LSA provides for a four-year secured credit facility in an aggregate principal amount of up to $40,000 (the “Loan Facility”), of which $30,000 was made available on the closing date (the “Initial Tranche”) and up to $10,000 (the “Discretionary Tranche”) may be made available on the later of July 1, 2023, or the date the Lender approves the issuance of the Discretionary Tranche.
The LSA provides for a four-year secured credit facility in an aggregate principal amount of up to $40,000 (the “Avenue Loan Facility”), of which $30,000 was made available on the closing date (the “Initial Tranche”) and up to $10,000 (the “Discretionary Tranche”) may be made available on the later of July 1, 2023, or the date the Avenue Lenders approve the issuance of the Discretionary Tranche.
The remaining net operating losses carryforwards of approximately $165,134 were generated during 2018 - 2024, and 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, 2024, in the amount of approximately $221,030.
The remaining net operating losses carryforwards of approximately $183,221 were generated during 2018 - 2024 and 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, 2025, in the amount of approximately $273,548.
Sales and marketing expenses consist mainly of employees’ salaries and related overhead costs, stock-based compensation, online marketing campaigns of our service offering, trade show expenses and marketing consultants, marketing expenses and subcontractors.
Sales and marketing expenses consist mainly of employees’ salaries and related overhead costs, stock-based compensation, depreciation of customer relationship intangible asset, online marketing campaigns of our service offering, trade show expenses and marketing consultants and subcontractors.
Pursuant to the Preferred Agreement, we agreed to issue such holders of Series A-1 Preferred Stock up to an aggregate of an additional 382,050 shares of common stock, in addition to the 1,273,499 shares of common stock issuable upon conversion of the Series A-1 Preferred Stock, in consideration for such holders agreeing not to convert their shares of Series A-1 Preferred Stock.
Pursuant to the Preferred Agreement, we agreed to issue such holders of Series A-1 Preferred Stock up to an aggregate of an additional 19,103 shares of common stock, in addition to the 63,675 shares of common stock issuable upon conversion of the Series A-1 Preferred Stock, in consideration for such holders agreeing not to convert their shares of Series A-1 Preferred Stock.
Financial expenses, net primarily consist of credit facility interest expense, interest income from cash balances, revaluation of warrants, revaluation of short-term investments, bank charges, lease liability and foreign currency translation differences.
Financial expenses, net, primarily consist of credit facility interest expense, interest income from cash balances, revaluation of warrants and pre-funded warrants, revaluation of a long-term loan, bank charges, lease liability and foreign currency translation differences.
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”).
As part of the acquisition, we issued the Selling Shareholders 84,381 shares of our common stock and agreed to assume options to purchase up to 5,010 shares of our common stock, subject to certain escrow and indemnity provisions contained in the Upright Agreement (in the aggregate, the “Consideration Shares”).
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.
We also subsequently acquired Upright, PsyInnovations, Physimax Technology, and most recently Twill, to further our platform. 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.
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 $282,92 5 and a credit facility of $25,564 as of December 31, 202 4 .
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 $307,133 and a credit facility of $25,795 as of December 31, 2025.
The increase is mainly due to the acquisition of Twill in the year ended December 31, 2024, compared to the year ended December 31, 2023. Net cash provided by financing activities Net cash provided by financing activities was $38,531 for the year ended December 31, 2024, compared to $18,253 for the year ended December 31, 2023.
The decrease is mainly due to the acquisition of Twill in the year ended December 31, 2024, compared to the year ended December 31, 2025. Net cash provided by financing activities Net cash provided by financing activities was $24,313 for the year ended December 31, 2025, compared to $38,531 for the year ended December 31, 2024.
The factors described above resulted in net loss attributable to common stockholders of $4 0 , 9 82 and $63,511 for the year ended December 31, 2024 and 2023, 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 $61,735 and $40,982 for the year ended December 31, 2025 and 2024, respectively. Non-GAAP Financial Measures To supplement our consolidated financial statements presented in accordance with U.S.
Research and development expenses consist mainly of employees’ salaries and related overhead costs involved in research and development activities, expenses related to: (i) our solutions including our Dario Smart Diabetes Management Solution, Dario Move solution and our digital behavioral health solution, (ii) labor, stock-based compensation 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 approval requirements and (v) facilities expenses associated with and allocated to research and development activities.
Research and development expenses consist mainly of employees’ salaries and related overhead costs involved in research and development activities, expenses related to: (i) our solutions including our Diabetes Management, MSK and our digital behavioral health solutions, (ii) labor, stock-based compensation contractors and engineering expenses, (iii) depreciation and maintenance fees related to equipment and software tools used in research and development and (iv) facilities expenses associated with and allocated to research and development activities.
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 We consider customer and distributor purchase orders to be contracts with customers. For each contract, the Company considers the promise to transfer tangible hardware and/or services, each of which are distinct, and accounted for as separate performance obligations.
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, 2024, total inventory write-downs expenses amounted to $ 301 . Production Lines Capitalization of Costs .
Inventory and supply chain 65 Table of Contents 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, 2025, total inventory write-downs expenses amounted to $3 20 . Business combination and asset acquisitions.
Net operating loss carryforwards As of December 31, 2024, we, WayForward and Twill had a U.S. federal net operating loss carryforward of approximately $ 192 , 404 , of which $27,270 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.
Net operating loss carryforwards As of December 31, 2025, we, WayForward and Twill had a U.S. federal net operating loss carryforward of approximately $47,055, $5,803, and $156,686 of which $7,120, $371 and $18,832 respectively, were generated from tax years 2011-2017 and can be carried forward and offset against taxable income and that expires during the years 2031 to 2037.
Such shares of common stock are issuable on the following dates, assuming the Series A-1 Preferred Stock has not yet been converted: (i) up to an aggregate of 99 Table of Contents 63,675 shares of Common Stock before July 1, 2023, if not converted for at least one quarter, (ii) up to an aggregate of 127,350 shares of Common Stock before October 1, 2023, if not converted for at least two quarters, (iii) up to an aggregate of 191,026 shares of Common Stock before January 1, 2024, if not converted for at least three quarters, (iv) up to an aggregate of 254,700 shares of Common Stock before April 1, 2024, if not converted for at least four quarters, and (v) up to an aggregate of 382,050 shares of Common Stock before July 1, 2024, if not converted for at least five quarters.
Such shares of common stock are issuable on the following dates, assuming the Series A-1 Preferred Stock has not yet been converted: (i) up to an aggregate of 3,184 shares of Common Stock before July 1, 2023, if not converted for at least one quarter, (ii) up to an aggregate of 6,368 shares of Common Stock before October 1, 2023, if not converted for at least two quarters, (iii) up to an aggregate of 9,551 shares of Common Stock before January 1, 2024, if not converted for at least three quarters, (iv) up to an aggregate of 12,735 shares of Common Stock before April 1, 2024, if not converted for at least four quarters, and (v) up to an aggregate of 19,103 shares of Common Stock before July 1, 2024, if not converted for at least five quarters.
Gross profit for the year ended December 31, 2024, excluding amortization of acquired technology, depreciation and stock-based compensation was $18,366 ( 6 7.9% of revenues) compared to $10,801 (53.1% of revenues) during the year ended December 31, 2023.
Gross profit for the year ended December 31, 2025, excluding amortization of acquired technology, depreciation and stock-based compensation was $14,404 (64.4% of revenues) compared to $18,366 (67.9% of revenues) during the year ended December 31, 2024.
The increase in our income from tax was due to a change in the valuation allowance for deferred tax liability that resulted from the acquisition of Twill. Net loss Net loss for the year ended December 31, 2024 was $42, 747 . Net loss for the year ended December 31, 2023, was $59,427.
The change was primarily due to a reduction in the valuation allowance for deferred tax liability that resulted from the acquisition of Twill in 2024. 67 Table of Contents Net loss Net loss for the year ended December 31, 2025 was $41,714. Net loss for the year ended December 31, 2024, was $42, 747 .
We expect to incur future net losses and our transition to profitability is dependent upon, among other things, the successful development and commercialization of our products and the achievement of a level of revenues adequate to support the cost structure. Until we achieve profitability or generate positive cash flows, we will continue to be dependent on raising additional funds.
We expect to incur future net losses and its transition to profitability is dependent upon, among other things, the successful commercialization of our products and the achievement of a level of revenues adequate to support the cost structure.
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.
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. As of December 31, 2025, both Consulting Agreements have been concluded. In addition, we agreed to issue to Mr.
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.
On June 9, 2022, we entered into a Credit Agreement (the “OrbiMed 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, 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. 69 Table of Contents On May 1, 2023, we entered into a Loan and Security Agreement, and Supplement thereto (the “LSA”), with our subsidiary, PsyInnovations, collectively as the borrowers (the “Borrowers”) and Avenue Venture Opportunities Fund II, L.P. and Avenue Venture Opportunities Fund, L.P., collectively as the lenders (the “Avenue Lenders”).
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.
Our fiscal year ends on December 31. 63 Table of Contents 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.
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. 91 Table of Contents 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.
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.
On May 1, 2023, we executed an agreement (the “Preferred Agreement”) with existing holders of our Series A-1 Convertible Preferred Stock (the “Series A-1 Preferred Stock”).
On April 30, 2025, the Avenue Loan Facility pursuant to the LSA was repaid in full. ​ On May 1, 2023, we executed an agreement (the “Preferred Agreement”) with existing holders of our Series A-1 Convertible Preferred Stock (the “Series A-1 Preferred Stock”).
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. 101 Table of Contents Recently Issued and Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.
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. 74 Table of Contents Recently Issued and Adopted Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.
Our sales and marketing expenses, excluding stock-based compensation, depreciation and amortization, for the year ended December 31, 2024, were $20, 27 7 compared to $17,146 for the year ended December 31, 2023, an increase of $3,1 3 1.
Our sales and marketing expenses, excluding stock-based compensation, depreciation and amortization, for the year ended December 31, 2025, were $16,851 compared to $20,277 for the year ended December 31, 2024, a decrease of $3,426.
As a result of the sale of the preferred stock, the aggregate gross proceeds to us from the offering were approximately $6,800. The closing of the offering occurred on January 14, 2025. ​ Readers are advised that available resources may be consumed more rapidly than currently anticipated, resulting in the need for additional funding sooner than expected.
We received aggregate gross proceeds of approximately $17,500 from the offering of common stock and pre-funded warrants. The closing of the offering occurred on September 23, 2025. ​ Readers are advised that available resources may be consumed more rapidly than currently anticipated, resulting in the need for additional funding sooner than expected.
Income tax Income from tax was $1,852 for the year ended December 31, 2024, representing an increase of $1,916 as compared to $64 of income tax expenses for the year ended December 31, 2023.
Income tax Income tax expense was $105 for the year ended December 31, 2025, compared to income from tax of $1,852 for the year ended December 31, 2024.
General and Administrative Expenses Our general and administrative expenses increased by $2, 342 to $20, 482 for the year ended December 31, 2024, compared to $18,140 for the year ended December 31, 2023.
General and Administrative Expenses Our general and administrative expenses decreased by $5,291 to $15,191 for the year ended December 31, 2025, compared to $20,482 for the year ended December 31, 2024.
Gross Profit Gross profit for the year ended December 31, 2024, amounted to $13,267 ( 49 . 1 % of revenues) compared to $5,984 (29.4% of revenues) for the year ended December 31, 2023 94 Table of Contents .
Gross Profit Gross profit for the year ended December 31, 2025, amounted to $12,665 (56.6% of revenues) compared to $13,267 (49.1% of revenues) for the year ended December 31, 2024.
Commercial revenue - Strategic partnerships We have also entered into contracts with a preferred partner and a health plan provider in which we provide data license, development and implementation services.
In the 2025 fiscal year, our B2B2C channel included 85 new employers and health plan clients, which brought our total client base to 1 67 . Commercial revenue - Strategic partnerships We have also entered into contracts with a preferred partner and a health plan provider in which we provide data license, development and implementation services.
GAAP within this Annual Report on Form 10-K, management provides certain non-GAAP financial measures (“NGFM”) of the Company’s financial results, including such amounts captioned: “net loss before interest, taxes, depreciation, and amortization” or “EBITDA,” and “Non-GAAP Adjusted Loss,” as presented herein below.
GAAP within this Annual Report on Form 10-K, management provides certain non-GAAP financial measures (“NGFM”) of our financial results, including such amounts captioned: “Non-GAAP Adjusted Loss,” as presented herein below. Importantly, we note the NGFM measures captioned “Non-GAAP Adjusted Loss” are not recognized terms under U.S.
As a result of the sale of the preferred stock, the aggregate gross proceeds to us from the offering were approximately $18,805.
We received aggregate gross proceeds of approximately $18,805 from the offering of preferred stock.
We believe the NGFM provide useful information by isolating certain expenses, gains, and losses, which are not necessarily indicative of our operating financial results and business outlook. In this regard, the presentation of the NGFM herein below, is to help the reader of our consolidated financial statements to understand the effects of the non-cash impact on our (U.S.
We believe the NGFM provide useful information by isolating certain expenses, gains, and losses, which are not necessarily indicative of our operating financial results and business outlook.
The increase in gross profit as a percentage of revenue for the year ended December 31, 2024, compared to the year ended December 31, 2023, resulted mainly from the increase in the revenues from the commercial channel, mainly related to the acquisition of Twill.
The increase in gross profit as a percentage of revenue for the year ended December 31, 2025, compared to the year ended December 31, 2024, resulted mainly from lower amortization of technology, hardware and consumables and reduced hosting costs.
We believe that we have sufficient cash to fund our operations for at least the next twelve months. ​ 100 Table of Contents Cash Flows (dollar amounts in thousands) The following tables sets forth selected cash flow information for the periods indicated: ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2024 ​ 2023 ​ $ ​ $ Cash used in operating activities: ​ (38,562) (30,379) Cash used in investing activities: ​ (8,934) (547) Cash provided by financing activities: ​ 38,531 18,253 ​ ​ (8,965) ​ (12,673) ​ Net cash used in operating activities Net cash used in operating activities was $38,562 for the year ended December 31, 2024, compared to $30,379 used in operations for the year ended December 31, 2023.
Cash Flows (dollar amounts in thousands) The following tables sets forth selected cash flow information for the periods indicated: ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 ​ ​ ​ ​ $ ​ $ Cash used in operating activities: ​ (25,941) (38,562) Cash used in investing activities: ​ (4,342) (8,934) Cash provided by financing activities: ​ 24,313 38,531 ​ ​ (5,970) ​ (8,965) ​ Net cash used in operating activities Net cash used in operating activities was $25,941 for the year ended December 31, 2025, compared to $38,562 used in operations for the year ended December 31, 2024.
Cash used in operations increased mainly due to the increase in our operating expenses and an increase in our working capital. Net cash used in investing activities Net cash used for investing activities was $8,934 for the year ended December 31, 2024, compared to cash used in investing activities of $547 for the year ended December 31, 2023.
Net cash used in investing activities Net cash used for investing activities was $4,342 for the year ended December 31, 2025, compared to cash used in investing activities of $8,934 for the year ended December 31, 2024.
Such NGFM are presented with the intent of providing greater transparency of information used by us in our financial performance analysis and operational decision-making.
GAAP, and as such, they are not a substitute for, considered superior to, considered separately from, nor as an alternative to, U.S. GAAP and /or the most directly comparable U.S. GAAP financial measures. Such NGFM are presented with the intent of providing greater transparency of information used by us in our financial performance analysis and operational decision-making.
As a result of the sale of the preferred stock, the aggregate gross proceeds to us from the Series C Offering were approximately $22,422.
We received aggregate gross proceeds of approximately $22,422 from the offering of preferred stock.
Refund to a customer that results from performance levels that were not met by the end of the measurement period are adjusted to the transaction price, and therefore estimated at the outset of the arrangement. In the 2024 fiscal year, our B2B2C channel included 36 new employers and health plan clients, which brought our total client base to 83.
Refunds to a customer that result from performance levels that were not met by the end of the measurement period are adjusted to the transaction price and therefore estimated at the outset of the arrangement.
Research and Development Expenses Our research and development expenses increased by $3,931 to $ 24 , 1 79 for the year ended December 31, 2024, compared to $20,248 for the year ended December 31, 2023.
Research and Development Expenses Our research and development expenses decreased by $10,388 to $13,791 for the year ended December 31, 2025, compared to $24,179 for the year ended December 31, 2024.
As a result of the sale of the preferred stock, the aggregate gross proceeds to us from the Offering are approximately $15.4 million. The closing of the Series B Preferred Stock, Series B-1 Preferred Stock and Series B-2 Preferred Stock occurred on May 4, 2023, and the closing of the Series B-3 Preferred Stock occurred on May 9, 2023.
As a result of the sale of the preferred stock, the aggregate gross proceeds we received from the Series D Offering are approximately $6,800. The closing of the Series D-2 Preferred Stock, and Series D-3 Preferred Stock occurred on January 14, 2025. The conversion of the preferred stock was subject to stockholder approval.
We allocate the transaction price to each distinct performance obligation based on their relative standalone selling price. Revenue from tangible products is recognized when control of the product is transferred to the customer (i.e., when our performance obligation is satisfied), which typically occurs at shipment.
In determining the transaction price we evaluate whether the price is subject to rebates and adjustments to determine the net consideration to which we expect to receive. Revenue from tangible hardware is recognized when control of the hardware is transferred to the customer (i.e., when our performance obligation is satisfied), which typically occurs at shipment.
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.
Our most developed AI tools leverage direct-to-consumer experience from over 150,000 members to drive superior engagement and outcomes. 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.
This increase was mainly a result of higher payroll related expenses, software licenses and an increase in subcontractor and consulting expenses due to the consolidation of Twill during the year ended December 31, 2024, partially offset by stock-based compensation and bonus payments.
Sales and Marketing Our sales and marketing expenses decreased by $6,012 to $20,338 for the year ended December 31, 2025, compared to $26,350 for the year ended December 31, 2024. This decrease was mainly a result of lower payroll related expenses, lower stock-based compensation expenses, partially offset by an increase in subcontractors and consulting expenses and digital marketing expenses.
Our general and administrative expenses, excluding stock-based compensation, acquisition costs and depreciation, for the year ended December 31, 2024, were $1 1 , 236 compared to $8, 663 for the year ended December 31, 2023, an increase of $2, 573 . This increase was mainly due to higher payroll related expenses and acquisition costs related to the consolidation of Twill.
Our general and administrative expenses, excluding stock-based compensation, share-based payments, acquisition costs and depreciation, for the year ended December 31, 2025, were $9,667 compared to $11,236 for the year ended December 31, 2024, a decrease of $1,569, and was mainly due to lower accounting and legal fees, reduced subcontractor and consulting expenses.
Revenues generated during the year ended December 31, 2024, were derived from the sale of services to our commercial customers and consumers located mainly in the United States. Cost of Revenues During the years ended December 31, 2024 and 2023, we recorded costs related to revenues in the amount of $13,7 73 and $14,368, respectively.
The decrease in revenues for the year ended December 31, 2025, compared to the year ended December 31, 2024, resulted primarily from a non-renewal of one customer acquired through the Twill acquisition. Revenues generated during the year ended December 31, 2025, were derived from the sale of services to our commercial customers and consumers located mainly in the United States.
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.
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. As of December 31, 2025, the Trust had exercised its third tranche of Pre-Funded Warrants, and accordingly, the related board appointment right has terminated and is no longer in effect.
The ASU requires, among other items, additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the Statements of Operations. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.
ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the effect of adopting the ASU on its disclosures.
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 90 Table of Contents from over 150,000 members to drive superior engagement and outcomes.
We were formed on August 11, 2011, as a Delaware corporation with the name LabStyle Innovations Corp. On July 28, 2016, we changed our name to DarioHealth Corp. 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.
We intend to fund our future operations through cash on hand, additional private and/or public offerings of debt or equity securities or a combination of the foregoing. There are no assurances, however, that we will be able to obtain an adequate level of financial resources that are required for the long-term development and commercialization of our product offerings.
There are no assurances, however, that we will be able to obtain an adequate level of financial resources that are required for the long-term development and commercialization of its product offerings. As of December 31, 2025, we had approximately $26,017 in cash and cash equivalents and short-term bank deposits compared to $28,461 at December 31, 2024.
The increase was mainly due to higher payroll related expenses and acquisition costs related to the consolidation of Twill during the year ended December 31, 2024, partially offset by a decrease in stock-based compensation.
The decrease was mainly due to lower stock-based compensation expenses, lower accounting and legal fees and reduced acquisition costs that were related to the acquisition of Twill on February 15, 2024.
Our general and administrative expenses consist mainly of employees’ salaries and related overhead costs, stock-based compensation, directors’ fees, legal and accounting fees, patent registration, expenses related to investor relations, as well as our office rent and related expenses. 95 Table of Contents Finance income (expenses), net Our finance income, net, increased by $16,319 to $13,145 for the year ended December 31, 2024, compared to $3,174 financing expenses for the year ended December 31, 2023.
Our general and administrative expenses consist mainly of employees’ salaries and related overhead costs, stock-based compensation, insurance costs, legal and accounting fees, acquisition related costs, expenses related to investor relations.
As of December 31, 2024, we had approximately $27,7 64 in cash and cash equivalents compared to $36,797 at December 31, 2023. 97 Table of Contents We have experienced cumulative losses of $390, 343 from inception (August 11, 2011) through December 31, 2024 and have a stockholders’ equity of $ 7 2,019 at December 31, 202 4 .
We have experienced cumulative losses of $ 452 , 078 from inception (August 11, 2011) through December 31, 2025 and have a stockholders’ equity of $ 67 , 922 at December 31, 2025.
Our research and development expenses, excluding stock-based compensation and depreciation, for the year ended December 31, 2024, were $ 20 , 6 45 compared to $16,367 for the year ended December 31, 2023, an increase of $ 4 ,278.
Our research and development expenses, excluding stock-based compensation and depreciation, for the year ended December 31, 2025, were $12,033 compared to $20,645 for the year 66 Table of Contents ended December 31, 2024, a decrease of $8,612. This decrease was mainly due to efficiency and post-merger integration activities resulting in a decrease in payroll, and subcontractors and consulting expenses.
Leidner warrants to purchase up to 1,032,946 shares of common stock, of which 717,946 are subject to time vesting and 315,000 are subject to certain performance-based metrics, and to issue to Mr. Khan 350,000 fully vested RSUs which shall be vest subject to stockholder approval.
Leidner warrants to purchase up to 51,648 shares of common stock, of which 35,898 are subject to time vesting and 15,750 are subject to certain performance-based metrics. As of December 31, 2025, all 35,898 time-vesting warrants have vested. The 15,750 performance-based warrants expired upon conclusion of the Consulting Agreement. We also agreed to issue to Mr.
Revenue Recognition Revenue is recognized under the five-step methodology in accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from contracts with customers,” (“ASC 606”), which requires us to identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations identified, and recognize revenue when (or as) each performance obligation is satisfied.
We apply the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.
The guidance will be effective for us for annual periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the impact on its financial statement disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses .
Recently issued accounting pronouncements, not yet adopted: In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses. The ASU requires, among other items, additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the Statements of Operations.
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).
The revenues from fixed-price service arrangements are recognized over time based on the pattern of transfer of services to the customer. ​ ​ 64 Table of Contents Commercial revenue - B2B2C We provide a mobile and web-based digital therapeutics health management programs to employers and health plans for their employees or covered individuals.
The decrease in cost of revenues was mainly due to a reduction in payroll related expenses included in the cost of revenues and stock-based compensation during the period, partially offset by an increase in amortization of technology related to the acquisition of Twill, and hosting costs.
This decrease was mainly due to a reduction in payroll expenses resulting from post-merger integration activities and a reduction in headcount. partially offset by an increase in subcontractors and consulting expenses and digital marketing expenses.
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Overview We are a leading global DTx company revolutionizing the way people manage their health across the chronic condition spectrum to live a better and healthier life. Our mission is to transform how affected individuals manage their health and chronic conditions by empowering our customers to easily manage their conditions and take steps to improve their overall health.
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Overview We are a vertically integrated health intelligence platform with a mission to power the behavior changes that drive better health.
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Most chronic conditions are driven by personal behaviors and the actions that are or are not taken. We believe that changing these behaviors can dramatically improve our customers’ overall health and substantially reduce unnecessary health spending. However, behavioral change and habit formation are difficult, especially in managing chronic disease and related conditions.

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