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What changed in DarioHealth Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of DarioHealth Corp.'s 2023 and 2024 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 2024 report.

+563 added−488 removedSource: 10-K (2025-03-10) vs 10-K (2024-03-28)

Top changes in DarioHealth Corp.'s 2024 10-K

563 paragraphs added · 488 removed · 289 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

119 edited+216 added−136 removed307 unchanged
Biggest changeType 2 Diabetes Users of Dario Digital Diabetes Management System Experience a Shift from Greater than 180 mg/dL to Normal Glucose Levels with Sustainable Results ● Reduction of 19.3% in high glucose readings within 12 months ● Increase of 11.3% in in-range readings within 12 months Methods : A retrospective data evaluation study was performed on the Dario TM cloud database.
Biggest changeBy leveraging Rula’s high-quality provider network with extensive coverage, we will offer an “easy button” solution for employers looking to implement behavioral health support seamlessly within their existing benefits structure. ​ 19 Table of Contents Clinical Studies Main Highlights Our studies below demonstrate the clinical value of our legacy digital therapeutic devices and the ability of our solutions to deliver sustainable outcomes over time. ​ At the ADA 2018 session, Dario presented three real-world-data analysis studies, as detailed below. ​ Type 2 Diabetes Users of Dario Digital Diabetes Management System Experience a Shift from Greater than 180 mg/dL to Normal Glucose Levels with Sustainable Results ● Reduction of 19.3% in high glucose readings within 12 months ● Increase of 11.3% in in-range readings within 12 months Methods : A retrospective data evaluation study was performed on the Dario TM cloud database.
A 39% increase in the in-range (80-130 mg/dL; In In February 2020, we presented an additional clinical study at the ATTD conference in Madrid, Spain.
A 39% increase in the in-range (80-130 mg/dL; In February 2020, we presented an additional clinical study at the ATTD conference in Madrid, Spain.
Fasting measurements analysis revealed an increase of 16% in ratios of readings In August 2020, we presented an additional clinical study at the Virtual Association of Diabetes Care & Education Specialists (ADCES) conference. The presented observational study data demonstrated better glycemic and blood pressure control.
Fasting measurements analysis revealed an increase of 16% in ratios of readings In August 2020, we presented an additional clinical study at the Virtual Association of Diabetes Care and Education Specialists (ADCES) conference. The presented observational study data demonstrated better glycemic and blood pressure control.
In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA or federal civil money penalties statute; ● the federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act (FCA), which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government.
In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the federal False Claims Act (“FCA”) or federal civil money penalties statute; ● The federal civil and criminal false claims laws and civil monetary penalty laws, including the federal FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government.
However, users had 19% lower all-cause OV charges vs nonusers ( P ​ ​ Three posters were published at AMCP-Nexus, in October 2023: ​ The impact of a digital health technology on healthcare quality measures and clinical outcomes in adults with type 2 diabetes mellitus ​ In this retrospective study, in adults with T2DM, a greater proportion of Dario Diabetes Solution (DDS) users with BL A1c greater than or equal to 8% achieved A1c less than 8% and a smaller proportion with BL A1c greater than 9% remained greater than 9%, compared with a matched cohort of nonusers, without increasing the risk of severe hypoglycemia.
However, users had 19% lower all-cause OV charges vs nonusers ( P ​ Three posters were published at AMCP-Nexus, in October 2023: ​ The impact of a digital health technology on healthcare quality measures and clinical outcomes in adults with type 2 diabetes mellitus ​ In this retrospective study, in adults with T2DM, a greater proportion of DDS users with BL A1c greater than or equal to 8% achieved A1c less than 8% and a smaller proportion with BL A1c greater than 9% remained greater than 9%, compared with a matched cohort of nonusers, without increasing the risk of severe hypoglycemia.
Blood pressure and blood glucose levels were evaluated. First month measuring on Dario platform was used as study baseline. Clinical outcomes examined were blood pressure values, percentage of blood pressure categories, average blood glucose (BGavg) and high blood glucose readings (>250 mg/dL, >400 mg/dL) ratios.
Blood pressure and blood glucose levels were evaluated. First month measuring on Dario platform was used as study baseline. Clinical outcomes examined were blood pressure values, percentage of blood pressure categories, BGavg and high blood glucose readings (>250 mg/dL, >400 mg/dL) ratios.
Results: A group of 345 active users started at baseline with Hypertension stage 1, 2 or hypertensive crisis levels and measured following 3 months was evaluated. ● Blood pressure outcomes: o Normal levels increased from 6% to 12% and percentage of users with hypertension stage 2 decreased from 53% to 45% o 70% of the users (243 out of 345) improved their blood pressure levels in 8.4 mmHg Systolic and 6.2 mmHg on average (Systolic 134.2±12 vs.142.6±14; Diastolic 89.9 ±11 vs.83.7 ±8.7) ● Blood Glucose outcomes: 19 Table of Contents o A group of 345 users measured with Dario their blood glucose in addition to blood pressure, 89% are type 2 and pre-diabetes - average age is 60.4. o For the group of 345 users a reduction of 33% (5.4% vs.8.0%) in high readings ratio (>250 mg/dL) and 67% (0.3%vs.0.9%) in severe events ratio (>400 mg/dL) was observed following six months on average.
Results: A group of 345 active users started at baseline with Hypertension stage 1, 2 or hypertensive crisis levels and measured following 3 months was evaluated. ● Blood pressure outcomes: o Normal levels increased from 6% to 12% and percentage of users with hypertension stage 2 decreased from 53% to 45% o 70% of the users (243 out of 345) improved their blood pressure levels in 8.4 mmHg Systolic and 6.2 mmHg on average (Systolic 134.2±12 vs.142.6±14; Diastolic 89.9 ±11 vs.83.7 ±8.7) ● Blood Glucose outcomes: o A group of 345 users measured with Dario their blood glucose in addition to blood pressure, 89% are type 2 and pre-diabetes - average age is 60.4. o For the group of 345 users a reduction of 33% (5.4% vs.8.0%) in high readings ratio (>250 mg/dL) and 67% (0.3%vs.0.9%) in severe events ratio (>400 mg/dL) was observed following six months on average.
The mean all-cause inpatient event rate was 0.17 (95% CI= 0.15-0.19) in DDS users and 0.22 (95% CI= 0.20-0.23) in nonusers (IRR= 0.77; 95% CI= 0.67-0.87; P ​ ​ Additional poster was presented at ISPOR EU, in November 2023. ​ The Impact of Patient Engagement with a Digital Diabetes Solution on All-Cause Healthcare Resource Utilization Rates and Charges ​ Overall engagement with DDS was associated with a reduction in all-cause HCRU and lower likelihood of incurring HCRU-related charges. ​ Methods : Patient-level claims data for adult DDS users (>18 years; registered 01-Jan-2017 to 30-Apr-2021) receiving therapy for T2DM were retrieved from Symphony Health Integrated Dataverse.
The mean all-cause inpatient event rate was 0.17 (95% CI= 0.15-0.19) in DDS users and 0.22 (95% CI= 0.20-0.23) in nonusers (IRR= 0.77; 95% CI= 0.67-0.87; P 38 Table of Contents Additional poster was presented at ISPOR EU, in November 2023. ​ The Impact of Patient Engagement with a Digital Diabetes Solution on All-Cause Healthcare Resource Utilization Rates and Charges ​ Overall engagement with DDS was associated with a reduction in all-cause HCRU and lower likelihood of incurring HCRU-related charges. ​ Methods : Patient-level claims data for adult DDS users (>18 years; registered 01-Jan-2017 to 30-Apr-2021) receiving therapy for T2DM were retrieved from Symphony Health Integrated Dataverse.
Total users’ engagement increased significantly by 29% (14.3 to 18.5) over two years (p 180mg/dL) in high-risk subgroup decreased significantly by 38% (38.8% vs. 63.1%) over two years (p ​ In September 2023, a manuscript was published in a peer-reviewed journal “ Journal of Medical Internet research (JMIR) Diabetes” on the contribution of specific digital engagement tools to mental health conditions – Depression and Anxiety. ​ Specifying the Efficacy of Digital Therapeutic Tools for Depression and Anxiety: Retrospective, 2-Cohort, Real-World Analysis This study demonstrated general improvement followed by a period of stability of depression and anxiety symptoms associated with cognitive behavioral therapy–based digital intervention.
Total users’ engagement increased significantly by 29% (14.3 to 18.5) over two years (p 180mg/dL) in high-risk subgroup decreased significantly by 38% (38.8% vs. 63.1%) over two years (p In September 2023, a manuscript was published in a peer-reviewed journal “ Journal of Medical Internet research (JMIR) Diabetes” on the contribution of specific digital engagement tools to mental health conditions – Depression and Anxiety. 34 Table of Contents Specifying the Efficacy of Digital Therapeutic Tools for Depression and Anxiety: Retrospective, 2-Cohort, Real-World Analysis This study demonstrated general improvement followed by a period of stability of depression and anxiety symptoms associated with cognitive behavioral therapy–based digital intervention.
Finally, perceived posture quality mediated the effect of weekly training duration on the pain levels in 2 weeks ( p ​ In January 2023, a manuscript was published in a peer-reviewed journal “ MDPI-Applied sciences ” on retrospective data analysis glycemic management across Racial/Ethic groups: Glycemic Management by a Digital Therapeutic Platform across Racial/Ethnic Groups: A Retrospective Cohort Study Our findings demonstrate improvement in blood glucose levels in high-risk racial/ethnic minority populations with T2DM, showing that in this group of users who are motivated to use a digital device there appears to be no difference in the outcomes between racial/ethnic groups.
Finally, perceived posture quality mediated the effect of weekly training duration on the pain levels in 2 weeks ( p ​ In January 2023, a manuscript was published in a peer-reviewed journal “ MDPI-Applied sciences ” on retrospective data analysis glycemic management across Racial/Ethic groups: 31 Table of Contents Glycemic Management by a Digital Therapeutic Platform across Racial/Ethnic Groups: A Retrospective Cohort Study Our findings demonstrate improvement in blood glucose levels in high-risk racial/ethnic minority populations with T2DM, showing that in this group of users who are motivated to use a digital device there appears to be no difference in the outcomes between racial/ethnic groups.
Although the law includes limited exceptions, including for PHI maintained by a covered entity or business associate under HIPAA and medical information maintained by healthcare providers under the CMIA, it may regulate or impact our processing of personal information depending on the context. Further, the California Privacy Rights Act (CPRA) went into effect January 1, 2023, amending the CCPA.
Although the law includes limited exceptions, including for PHI maintained by a covered entity or business associate under HIPAA and medical information maintained by healthcare providers under the CMIA, it may regulate or impact our processing of personal information depending on the context. Further, the California Privacy Rights Act (“CPRA”) went into effect January 1, 2023, amending the CCPA.
A subset of 114 users with diabetes in higher risk started with BG average >160 mg/dL improved their average blood glucose by 14% (207±47 vs.177±50 mg/dL) following six months compared to baseline. ​ In November 2020, we presented additional clinical study data at the Virtual Diabetes Technology Society (DTS) meeting.
A subset of 114 users with diabetes in higher risk started with BG average >160 mg/dL improved their average blood glucose by 14% (207±47 vs.177±50 mg/dL) following six months compared to baseline. In November 2020, we presented additional clinical study data at the Virtual Diabetes Technology Society (“DTS”) meeting.
Their fasting blood glucose was significantly reduced (9%) after three months (186±57 vs. 204±62) without change in hypoglycemia events ratio ( ​ In May 2021, a prospective pilot study was published in a peer reviewed journal “Journal of Diabetes Science and Technology”: “Digital Therapeutics for Type 2 Diabetes: Incorporating Coaching Support and Validating Digital Monitoring​” ​ The study suggests that a diabetes digital platform with real-time feedback and access to coaching improved diabetes outcome measures such as HbA1c with a reduction in GV.
Their fasting blood glucose was significantly reduced (9%) after three months (186±57 vs. 204±62) without change in hypoglycemia events ratio ( 25 Table of Contents In May 2021, a prospective pilot study was published in a peer reviewed journal “Journal of Diabetes Science and Technology”: “Digital Therapeutics for Type 2 Diabetes: Incorporating Coaching Support and Validating Digital Monitoring​” ​ The study suggests that a diabetes digital platform with real-time feedback and access to coaching improved diabetes outcome measures such as HbA1c with a reduction in GV.
Under this system, serious incidents must be reported to the relevant authorities of the EU member states, and manufacturers are required to take Field Safety Corrective Actions, (FSCAs), to reduce a risk of death or serious deterioration in the state of health associated with the use of a medical device that is already placed on the market.
Under this system, serious incidents must be reported to the relevant authorities of the EU member states, and manufacturers are required to take Field Safety Corrective Actions (“FSCAs”), to reduce a risk of death or serious deterioration in the state of health associated with the use of a medical device that is already placed on the market.
Federal Communications Commission Regulation The Dario Blood Glucose Monitoring System includes a wireless radio frequency transmitter and receiver and, therefore, is subject to equipment authorization requirements in the United States. The Federal Communications Commission (FCC) requires advance clearance of all radio frequency devices before they can be imported into, sold or marketed in the United States.
Federal Communications Commission Regulation The Dario Blood Glucose Monitoring System includes a wireless radio frequency transmitter and receiver and, therefore, is subject to equipment authorization requirements in the United States. The Federal Communications Commission (“FCC”) requires advance clearance of all radio frequency devices before they can be imported into, sold or marketed in the United States.
Socioeconomic status was matched by applying zip code data to census.gov data. ​ Results : For 11,101 users, the average ratio of target range readings (70-180 mg/dL) was significantly increased from 28.4% to 54.8% (P 180 mg/dL) was significantly reduced from 71.3% to 44.4% over a full year usage (P ​ In August 2021, we presented additional clinical study data at the ADCES meeting.
Socioeconomic status was matched by applying zip code data to census.gov data. 26 Table of Contents Results : For 11,101 users, the average ratio of target range readings (70-180 mg/dL) was significantly increased from 28.4% to 54.8% (P 180 mg/dL) was significantly reduced from 71.3% to 44.4% over a full year usage (P In August 2021, we presented additional clinical study data at the ADCES meeting.
HIPAA also regulates and standardizes the codes, formats and identifiers used in certain 46 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 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.
A 2-part gamma distribution model was used to determine 1) likelihood (odds ratio, OR) of users vs nonusers to incur charges, then 2) total charges per patient per year (PPPY) including all-cause HCRU and office visit (OV) charges. 34 Table of Contents ​ Results : Of 9779 pts, 2445 DDS users and 7334 nonusers were matched; mean age, 58.2±10.6 and 58.3±12.5 years, respectively.
A 2-part gamma distribution model was used to determine 1) likelihood (odds ratio, OR) of users vs nonusers to incur charges, then 2) total charges per patient per year (PPPY) including all-cause HCRU and office visit (OV) charges. ​ Results : Of 9779 pts, 2445 DDS users and 7334 nonusers were matched; mean age, 58.2±10.6 and 58.3±12.5 years, respectively.
Pre-market Notification (510(k)) Clearance Process. Manufacturers of most Class II devices must submit premarket notifications to the FDA under Section 510(k) of the FDCA (21 U.S.C. § 360(k)) in order to obtain the necessary authorization to market or commercially distribute such devices.
Pre-market Notification (510(k)) Clearance Process. Manufacturers of most Class II devices must submit premarket notifications to the FDA under Section 510(k) of the FDCA (21 U.S.C. § 360(k)) to obtain the necessary authorization to market or commercially distribute such devices.
Secondary endpoints included severe hypoglycemia (event requiring medical intervention) rates for all included DDS users and nonusers and for those with BL A1c greater than or equal to 8% who achieved a predefined target A1c of less than 8%. ​ Results : Overall, DDS user and nonuser cohorts were well matched , including by payer type (70% commercial and 18% Medicare for both groups).
Secondary endpoints included severe hypoglycemia (event requiring medical intervention) rates for all included DDS users and nonusers and for those with BL A1c greater than or equal to 8% who achieved a predefined target A1c of less than 8%. 37 Table of Contents Results : Overall, DDS user and nonuser cohorts were well matched , including by payer type (70% commercial and 18% Medicare for both groups).
All-cause HCRU rates and charges per 100 days of engagement were adjusted for baseline values with a negative binomial generalized linear model and logistic model, respectively; incidence rate ratios (IRR) for HCRU and odds ratios (OR) for charges >$0 were derived. ​ 36 Table of Contents Results : We identified 2445 DDS users (mean+SD age, 58.2+10.6 years; 53.3% female).
All-cause HCRU rates and charges per 100 days of engagement were adjusted for baseline values with a negative binomial generalized linear model and logistic model, respectively; incidence rate ratios (IRR) for HCRU and odds ratios (OR) for charges >$0 were derived. ​ Results : We identified 2445 DDS users (mean+SD age, 58.2+10.6 years; 53.3% female).
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 47 Table of Contents 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 54 Table of Contents security enforcement.
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; 45 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 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 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; 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.
Our findings also underscore the need and provide a basis for a comprehensive approach to understanding the mechanism of BP regulation associated with BG. Methods : In this retrospective, real-world case-control study, we extracted the data of 269 people with type 2 diabetes (T2D) who tracked their BG levels using the Dario digital platform for a chronic condition.
Our findings also underscore the need and provide a basis for a comprehensive approach to understanding the mechanism of BP regulation associated with BG. Methods : In this retrospective, real-world case-control study, we extracted the data of 269 people with T2D who tracked their BG levels using the Dario digital platform for a chronic condition.
Users had 23.5% lower inpatient hospitalization incident rate versus non-users (IRR, 0.765 [0.671–0.873]; P Three studies were presented by Sanofi at the 83 th ADA conference: Impact of Digital Diabetes Solution on Glycemic Control in Adults with Type 2 Diabetes Mellitus in the United States—A Retrospective Cohort Study T he study showed adults with uncontrolled T2DM using Dario Diabetes Solution (DDS) had better outcomes at 6 months, with more significant HbA1c reductions than matched nonusers across various BL HbA1c levels, showing incremental improvements to usual care. 33 Table of Contents ​ Methods : This retrospective cohort study included adults with type 2 diabetes mellitus (T2DM) with a baseline (BL) HbA1c ≥7% who used DDS (users) or received usual care (nonusers) between January 1, 2017, to October 31, 2021.
Users had 23.5% lower inpatient hospitalization incident rate versus non-users (IRR, 0.765 [0.671–0.873]; P Three studies were presented by Sanofi at the 83 th ADA conference: Impact of Digital Diabetes Solution on Glycemic Control in Adults with Type 2 Diabetes Mellitus in the United States—A Retrospective Cohort Study The study showed adults with uncontrolled T2DM using DDS had better outcomes at 6 months, with more significant HbA1c reductions than matched nonusers across various BL HbA1c levels, showing incremental improvements to usual care. ​ Methods : This retrospective cohort study included adults with T2DM with a baseline (BL) HbA1c ≥7% who used DDS (users) or received usual care (nonusers) between January 1, 2017, to October 31, 2021.
Class III devices are intended to be life sustaining or life supporting, devices that are implantable, devices that present a potential unreasonable risk of harm or are of substantial importance in preventing impairment of health, and 37 Table of Contents devices that are not substantially equivalent to other lawfully marketed devices and for which safety and effectiveness cannot be assured solely by the general controls and special controls.
Class III devices are intended to be life sustaining or life supporting, devices that are implantable, devices that present a potential unreasonable risk of harm or are of substantial importance in preventing impairment of health, and devices that are not substantially equivalent to other lawfully marketed devices and for which safety and effectiveness cannot be assured solely by the general controls and special controls.
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.
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.
Patients using an integrated chronic disease management digital platform have the potential to improve user activation which may assist to better manage their blood glucose and blood pressure levels and sustain behavioral change. ​ Impact of Digital Management on Clinical Outcome in Patients with Chronic Conditions: diabetes and hypertension. The study presented Hypertension and Diabetes clinical outcomes.
Patients using an integrated chronic disease management digital platform have the potential to improve user activation which may assist to better manage their blood glucose and blood pressure levels and sustain behavioral change. 23 Table of Contents Impact of Digital Management on Clinical Outcome in Patients with Chronic Conditions: diabetes and hypertension. The study presented Hypertension and Diabetes clinical outcomes.
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.
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.
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.
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.
A population of active Type 2 Diabetic (T2D) users that continuously measured their blood glucose using Dario TM BGMS during the full year of 2017 was evaluated. The study assessed the ratio of high (180-400 mg/dL) and hyperglycemic (>400mg/dL) blood glucose readings during full year of 2017 as recorded in the database.
A population of active T2D users that continuously measured their blood glucose using Dario TM BGMS during the full year of 2017 was evaluated. The study assessed the ratio of high (180-400 mg/dL) and hyperglycemic (>400mg/dL) blood glucose readings during full year of 2017 as recorded in the database.
Results : 21 Table of Contents ● Significant reduction in lab values such as HbA1C (2 points), Fasting Blood Glucose (18%) and Body Mass Index (BMI) (10%)​ ● Statistically significant improvement in glucose variability (21%)​ ● Significant improvement in self-reported evaluation in weight and glucose control satisfaction​ ● Weekly engagement with CDCES predicted reduction of participants’ GV during the following week ​ In June 2021, two studies were presented in 81 th ADA: ​ ​ Impact of Digital Intervention Tools on Engagement and Glycemic Outcomes ​ Product updates to digital platforms that guide on healthy eating and help users understand their glucose readings in context may assist users in improving the management of their diabetes. ​ Methods : A retrospective data evaluation study was performed on Dario TM members during the time before and after product modification.
Clinical outcomes and self reported data before and after intervention were compared. ​ Results : ● Significant reduction in lab values such as HbA1C (2 points), Fasting Blood Glucose (18%) and BMI (10%)​ ● Statistically significant improvement in glucose variability (21%)​ ● Significant improvement in self-reported evaluation in weight and glucose control satisfaction​ ● Weekly engagement with CDCES predicted reduction of participants’ GV during the following week ​ In June 2021, two studies were presented in 81 th ADA: Impact of Digital Intervention Tools on Engagement and Glycemic Outcomes ​ Product updates to digital platforms that guide on healthy eating and help users understand their glucose readings in context may assist users in improving the management of their diabetes. ​ Methods : A retrospective data evaluation study was performed on Dario TM members during the time before and after product modification.
A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease 41 Table of Contents or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a patient.
A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a patient.
Efficacy of a tailored digital intervention tool targeting patients with clustered recurrent high glucose readings 22 Table of Contents The potential benefit of implementing a real-time digital diabetes intervention journey to recognize episodes of high blood glucose measurement clusters and assist patients in improving self-management and clinical outcomes.
Efficacy of a tailored digital intervention tool targeting patients with clustered recurrent high glucose readings The potential benefit of implementing a real-time digital diabetes intervention journey to recognize episodes of high blood glucose measurement clusters and assist patients in improving self-management and clinical outcomes.
A PCT search report and written opinion on patentability that we received from World Intellectual Property Organization (known as WIPO) that included only two “Y” citations and one additional non-relevant reference. Corresponding national applications of our PCT were filed in the U.S., Europe, Japan, China, Australia and Israel. On May 1, 2014, we announced the receipt of a U.S.
A PCT search report and written opinion on patentability that we received from World Intellectual Property Organization (“WIPO”) that included only two “Y” citations and one additional non-relevant reference. Corresponding national applications of our PCT were filed in the U.S., Europe, Japan, China, Australia and Israel. On May 1, 2014, we announced the receipt of a U.S.
Individual components of engagement were also analyzed. ​ 35 Table of Contents Results : 568 DDS users were included. At BL, their mean age was 57.3 years (SD ±11.3) and mean A1c was 9.14±1.78%. Median engagement activity was 65 active days of 180.
Individual components of engagement were also analyzed. ​ Results : 568 DDS users were included. At BL, their mean age was 57.3 years (SD ±11.3) and mean A1c was 9.14±1.78%. Median engagement activity was 65 active days of 180.
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.
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 abstract contained in the patent award describes this patent as “A computing system for interacting with a user comprises a processor and a memory storing executable software which, when executed by the processor, causes the processor to 50 Table of Contents commence an interactive session with a user, receive input data from the user during the interactive session, analyze the received input data and output a response to the user to continue the interactive session with the user.
The abstract contained in the patent award describes this patent as “A computing system for interacting with a user comprises a processor and a memory storing executable software which, when executed by the processor, causes the processor to commence an interactive session with a user, receive input data from the user during the interactive session, analyze the received input data and output a response to the user to continue the interactive session with the user.
In February 2023, we presented two additional clinical studies at the ATTD conference in Berlin, Germany: ​ 28 Table of Contents Decrease in Hypoglycemia Events over Year in Older adults with Diabetes Monitoring with Digital Diabetes Management System Older adults using a digital diabetes management platform have the potential to promote behavioral change and prevent hypoglycemia, demonstrating better glycemic outcome.
In February 2023, we presented two additional clinical studies at the ATTD conference in Berlin, Germany: Decrease in Hypoglycemia Events over Year in Older adults with Diabetes Monitoring with Digital Diabetes Management System Older adults using a digital diabetes management platform have the potential to promote behavioral change and prevent hypoglycemia, demonstrating better glycemic outcome.
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.
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.
Our findings underscore the need for and provide a basis for a personalized approach to digital health. ​ Methods : This retrospective real-world analysis followed 998 people with type 2 diabetes who regularly tracked their blood glucose levels with the Dario digital therapeutics platform for chronic diseases.
Our findings underscore the need for and provide a basis for a personalized approach to digital health. 24 Table of Contents Methods : This retrospective real-world analysis followed 998 people with type 2 diabetes who regularly tracked their blood glucose levels with the Dario digital therapeutics platform for chronic diseases.
A group of 31% (387) achieved BG avg of 17 Table of Contents Subgroup analyses of 568 non-insulin users revealed that 40% (226) achieved a BG avg ​ In August 2019 another study was presented at the AADE 2019 in Atlanta.
A group of 31% (387) achieved BG avg of Subgroup analyses of 568 non-insulin users revealed that 40% (226) achieved a BG avg In August 2019 another study was presented at the AADE 2019 in Atlanta.
The presented data shows the Dario digital therapeutics platform successfully assists insulin dependent patients with diabetes in reducing hypoglycemic events. ​ Decrease in Hypoglycemia Events Over Two Years in Patients Monitoring with Dario’s Digital Diabetes Management System Methods : A retrospective data analysis was performed on the Dario real-world database.
The presented data shows the Dario digital therapeutics platform successfully assists insulin dependent patients with diabetes in reducing hypoglycemic events. 22 Table of Contents Decrease in Hypoglycemia Events Over Two Years in Patients Monitoring with Dario’s Digital Diabetes Management System Methods : A retrospective data analysis was performed on the Dario real-world database.
Scores were calculated based on PHQ-9 scoring guidelines. Users were stratified based on severity as minimal-mild (score 0-9), mild-moderate and severe-moderate (10-19), or Severe (>=20). Results: ● A group of 496 platform users (376 women, 108 men, 12 other) who completed two assessments of PHQ-9 was evaluated.
Users were stratified based on severity as minimal-mild (score 0-9), mild-moderate and severe-moderate (10-19), or Severe (>=20). Results: A group of 496 platform users (376 women, 108 men, 12 other) who completed two assessments of PHQ-9 was evaluated.
HbA1c drop ≥1% from BL to 6 months was achieved by 47% of users vs 37% nonusers (difference: 10%; P P 9%, the healthcare effectiveness data and information set performance measure, mean difference between groups was -0.47% (users, -2.25% [-2.50, -1.99]; nonusers, -1.78% [-1.92, -1.63]; P =0.002). ​ ​ Use of Digital Diabetes Solution Is Associated with Improved Glycemic Control without Increased Risk of Severe Hypoglycemia in Adults with Type 2 Diabetes Mellitus in the United States—Retrospective Cohort Study ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In this retrospective study, a larger proportion of adults with uncontrolled T2DM (BL HbA1c ≥8%) achieved HbA1c severe hypoglycemia (SH). ​ Methods : This retrospective cohort analysis included adults with T2DM who used DDS (users) and nonusers from 1JAN2017 to 31OCT2021.
HbA1c drop ≥1% from BL to 6 months was achieved by 47% of users vs 37% nonusers (difference: 10%; P P 9%, the healthcare effectiveness data and information set performance measure, mean difference between groups was -0.47% (users, -2.25% [-2.50, -1.99]; nonusers, -1.78% [-1.92, -1.63]; P =0.002). ​ Use of Digital Diabetes Solution Is Associated with Improved Glycemic Control without Increased Risk of Severe Hypoglycemia in Adults with Type 2 Diabetes Mellitus in the United States—Retrospective Cohort Study In this retrospective study, a larger proportion of adults with uncontrolled T2DM (BL HbA1c ≥8%) achieved HbA1c severe hypoglycemia (SH).
Upright also added the following trademarks to our list: UPRIGHT, UPRIGHT GO – registered in the US, AU and EM, and UPRIGHT DASHBOARD, UPRIGHT DESKTOP, UPRIGHT GO 2, UPRIGHT POSTURE IS WITHING REACH – registered in the U.S. 49 Table of Contents ​ Utility Models We have been granted Utility Models for our core invention in Japan.
Upright also added the following trademarks to our list: UPRIGHT, UPRIGHT GO – registered in the US, AU and EM, and UPRIGHT DASHBOARD, UPRIGHT DESKTOP, UPRIGHT GO 2, UPRIGHT POSTURE IS WITHING REACH – registered in the U.S. ​ Utility Models We have been granted Utility Models for our core invention in Japan.
The severe group significantly improved their average GAD-7 score (P 5) in GAD-7 over the study period. ● The minimal-mild group mostly maintained their levels and hence did not escalate to higher severity while using the care platform.
The severe group significantly improved their average GAD-7 score (P 5) in GAD-7 over the study period. 30 Table of Contents ● The minimal-mild group mostly maintained their levels and hence did not escalate to higher severity while using the care platform.
In particular, the “Dario” wordmark is registered as a trademark in Australia, Canada, China, Costa Rica, United States, Israel, Hong Kong, South Africa, Japan, Costa Rica, Europe, Israel, Korea, Mexico, New Zealand, Panama and Russia. The “DARIOHEALTH” wordmark is registered as a trademark in the United States, Canada, China and India.
In particular, the “Dario” wordmark is registered as a trademark in Australia, Canada, China, Costa Rica, United States, Israel, Hong Kong, South Africa, Japan, 56 Table of Contents Costa Rica, Europe, Israel, Korea, Mexico, New Zealand, Panama and Russia. The “DARIOHEALTH” wordmark is registered as a trademark in the United States, Canada, China and India.
Results : For the 2554 users with diabetes and hypertension stage 1 and above, more than two thirds improved their systolic blood pressure by 13 mmHg (P Additionally, a group of 38.7% (N=990) moved to a lower hypertensive stage (P 24 Table of Contents The subset of 1367 users with stage 2 hypertension improved their systolic blood pressure from 150±12.4 to 141±15.2 mmHg on average and 43.9% (N=600) improved their blood pressure by more than 10 mmHg over six months (P The subgroup of 306 users who started at high-risk blood glucose levels significantly reduced their blood glucose average by 15% over 6 months (232.4±46 to 198±65 mg/dL) (P ​ Blood Glucose Levels in High-Risk Type 2 Diabetes Users of a Digital Therapeutic Platform by Race/Ethnicity ​ Digital therapeutic platforms may promote behavior modification in high-risk patients with type 2 diabetes to create sustainable outcomes and allow the users to become more active participants in their chronic condition.
A statistical analysis (T-test) was used to evaluate differences in Systolic and Diastolic pressures and average blood glucose. 28 Table of Contents Results : For the 2554 users with diabetes and hypertension stage 1 and above, more than two thirds improved their systolic blood pressure by 13 mmHg (P Additionally, a group of 38.7% (N=990) moved to a lower hypertensive stage (P The subset of 1367 users with stage 2 hypertension improved their systolic blood pressure from 150±12.4 to 141±15.2 mmHg on average and 43.9% (N=600) improved their blood pressure by more than 10 mmHg over six months (P The subgroup of 306 users who started at high-risk blood glucose levels significantly reduced their blood glucose average by 15% over 6 months (232.4±46 to 198±65 mg/dL) (P Blood Glucose Levels in High-Risk Type 2 Diabetes Users of a Digital Therapeutic Platform by Race/Ethnicity ​ Digital therapeutic platforms may promote behavior modification in high-risk patients with type 2 diabetes to create sustainable outcomes and allow the users to become more active participants in their chronic condition.
These were evaluated for the blood glucose average (BGavg), estimated A1c (eA1c) values and glycemic variability (by Standard Deviation; SD) following 24 months compared to the first month (baseline). 18 Table of Contents Results : 368 high-risk, T2D active and engaged users for at least consecutive 2 years were identified and assessed for their risk-level and insulin usage.
These were evaluated for the blood glucose average (“BGavg”), estimated A1c (eA1c) values and glycemic variability (by Standard Deviation; SD) following 24 months compared to the first month (baseline). Results : 368 high-risk, T2D active and engaged users for at least consecutive 2 years were identified and assessed for their risk-level and insulin usage.
The EU 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.
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.
We have employment agreements with our four executive officers. See “Management – Employment Agreements.” ​ ​ 55 Table of Contents
We have employment agreements with our four executive officers. See “Management – Employment Agreements.” ​ ​ 59 Table of Contents
An additional study evaluated the potential improvement in glycemic variability in Type 2 diabetes over six months in patients monitoring with Dario Digital Diabetes Management System. Dario presented the study results at the Advance Technologies and Treatment for Diabetes (ATTD) conference in February 2019 in Berlin.
An additional study evaluated the potential improvement in glycemic variability in Type 2 diabetes over six months in patients monitoring with Dario Digital Diabetes Management System. Dario presented the study results at the Advance Technologies and Treatment for Diabetes (ATTD) conference in February 2019 in Berlin. We presented two additional studies outcomes at ADA 2019 conference.
The system/method further includes retrieving of a pair of sequential user response and follow-up prompt from the database, displaying user-selectable ratings, each rating designating a respectively different quality to the follow-up prompt, receiving selection of a rating and a related comment, and associating the selection and the comment to the follow-up prompt.” There are also pending associated patent applications filed in the European Patent Office (Application 19847959.4), Canada (Application 3109113). ​ Patent Applications ​ ​ On October 25, 2021, patent application 17/510,341 was filed in the United States Patent office.
The system/method further includes retrieving of a pair of sequential user response and follow-up prompt from the database, displaying user-selectable ratings, each rating designating a respectively different quality to the follow-up prompt, receiving selection of a rating and a related comment, and associating the selection and the comment to the follow-up prompt.” There are also pending associated patent applications filed in the European Patent Office (Application 19847959.4), Canada (Application 3109113). ​ Patent Applications ​ On December 8, 2021, patent application 17/546,020 was filed in the United States Patent office.
Analysis revealed that during the first 4 months there is a positive trend of monthly average steps ( B =.02, P B = -2.00, P P ​ ​ Certain clinical studies were published by Sanofi on our data in 2023. The first poster was published at ISPOR May 2023.
Analysis revealed that during the first 4 months there is a positive trend of monthly average steps ( B =.02, P B = -2.00, P P ​ Certain clinical studies were published by Sanofi on our data in 2023.
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 (the “CCPA”) went into effect January 1, 2020.
The PMA pathway is much more costly, lengthy and uncertain.
The PMA pathway is much more costly, lengthy and uncertain. Breakthrough Devices.
In general, software that is intended for a medical purpose, whether it is included with a hardware device or is standalone software, is considered a medical device and subject to the same regulatory pathways described above, as long as it meets the definition of a “device” in Section 201(h) of the FDCA.
Our acquisition of Twill added a PDT that received a Breakthrough Device Designation. ​ In general, software that is intended for a medical purpose, whether it is included with a hardware device or is standalone software, is considered a medical device and subject to the same regulatory pathways described above, as long as it meets the definition of a “device” in Section 201(h) of the FDCA.
Findings indicate a positive association between digital engagement and glycemia, with no differences between REM and WP participants. ​ In February 2023, a manuscript was published in a peer-reviewed journal “ PAIN reports ” on an analytical framework of retrospective data for personalized pain management using piecewise mixed-effects model trees: Personalizing digital pain management with adapted machine learning approach This analytical framework offers an opportunity for investigating the personalized efficacy of digital therapeutics for pain management, taking into account users' characteristics and boosting interpretability and can benefit from including more users' characteristics.
In February 2023, a manuscript was published in a peer-reviewed journal “ PAIN reports ” on an analytical framework of retrospective data for personalized pain management using piecewise mixed-effects model trees: Personalizing digital pain management with adapted machine learning approach This analytical framework offers an opportunity for investigating the personalized efficacy of digital therapeutics for pain management, taking into account users' characteristics and boosting interpretability and can benefit from including more users' characteristics.
Weight measurements and blood glucose readings were observed over 12 months. Results : The total population of 715 users who participated in the study improved their weight level on average (p 2 . Over 30 percent achieved weight loss of 5% or greater over 12 months.
Results : The total population of 715 users who participated in the study improved their weight level on average (p 2 . Over 30 percent achieved weight loss of 5% or greater over 12 months.
Average numbers of Hypoglycemia Level 1 ( Results: In the cohort of 28 44 users, hypoglycemia level 1 events were reduced by 31% and 35% from baseline (0.54, 0.51 vs. 0.78) on average within 6 months and sustained over a year (p ​ Impact of Digital Coaching on Diabetes Self-management and Glycemic Outcomes for People with Type 2 Diabetes Self-monitoring blood glucose and digital engagement have a mediating role in the effect of digital coaching on blood glucose levels.
Average numbers of Hypoglycemia Level 1 ( Results: In the cohort of 28 44 users, hypoglycemia level 1 events were reduced by 31% and 35% from baseline (0.54, 0.51 vs. 0.78) on average within 6 months and sustained over a year (p 32 Table of Contents or older with Type 1 or Type 2 using Insulin revealed a substantial reduction of severe hypoglycemia Level 2 of 42% (0.11 vs. 0.19) (p Impact of Digital Coaching on Diabetes Self-management and Glycemic Outcomes for People with Type 2 Diabetes Self-monitoring blood glucose and digital engagement have a mediating role in the effect of digital coaching on blood glucose levels.
Results: The Avg.bg was significantly reduced in each group over a year with no differences between REM/WP users. Blood glucose measurements in Model 1 and frequency of measurements by months in Model 2 and Model 3 predicted the Avg.bg.
Results: The Avg.bg was significantly reduced in each group over a year with no differences between REM/WP users. Blood glucose measurements in Model 1 and frequency of measurements by months in Model 2 and Model 3 predicted the Avg.bg. Findings indicate a positive association between digital engagement and glycemia, with no differences between REM and WP participants.
Comparison of All-Cause Healthcare Resource Utilization Rates between Patients with Type 2 Diabetes Who Use a Digital Diabetes Solution Versus Non-Users: A 12-Month Retrospective Cohort Study I n this retrospective cohort study, utilizing Dario Diabetes Solution (DDS) demonstrated a significantly greater reduction in all-cause HCRU and inpatient hospitalization rates during 12-month follow-up compared with non-users receiving usual care.
The first poster was published at ISPOR May 2023. 35 Table of Contents Comparison of All-Cause Healthcare Resource Utilization Rates between Patients with Type 2 Diabetes Who Use a Digital Diabetes Solution Versus Non-Users: A 12-Month Retrospective Cohort Study In this retrospective cohort study, utilizing Dario Diabetes Solution (DDS) demonstrated a significantly greater reduction in all-cause HCRU and inpatient hospitalization rates during 12-month follow-up compared with non-users receiving usual care.
The group included 112 users whose starting average blood glucose >180 mg/dL. Among this group the average age was 50±20.8. The group also included 173 users whose starting average blood glucose was ​ Results : In the sub-group of 112 users the average amount of basal insulin increased by six units after three months (45 vs.39).
The group also included 173 users whose starting average blood glucose was ​ Results : In the sub-group of 112 users the average amount of basal insulin increased by six units after three months (45 vs.39).
We presented two additional studies outcomes at ADA 2019 conference. 16 Table of Contents Decrease in Glycemic Variability for T2D over Six Months in Patients Monitoring with Dario Digital Diabetes Management System ● The study demonstrated a reduction of 14%-18% in measurements variability was observed in T2D within 6 months ● Hypo events ( Methods: A retrospective data evaluation study was performed on the Dario TM database.
Decrease in Glycemic Variability for T2D over Six Months in Patients Monitoring with Dario Digital Diabetes Management System ● The study demonstrated a reduction of 14%-18% in measurements variability was observed in T2D within 6 months ● Hypo events ( Methods: A retrospective data evaluation study was performed on the Dario TM database.
The Patient Health Questionnaire-9 (“PHQ-9”) was utilized to screen for depression severity and track progress over time. The current sample is based on individuals who used the Dario Behavioral Health platform between 2019-2021, and completed at least two PHQ-9 assessments, one at baseline and the second between baseline and 12 weeks of platform utilization.
The Generalized Anxiety Disorder Assessment (GAD-7) was utilized to screen for anxiety severity and track progress over time. The current sample is based on individuals who used the Dario Behavioral Health platform between 2019-2021, and completed at least two GAD-7 assessments, one at baseline and the second between baseline and 12 weeks of platform utilization.
Digital engagement was assessed by additional parameters including measurement type (fasting/premeal/post meal/bedtime), carbohydrate intake, meal type and physical activity alongside glucose measurement. 29 Table of Contents Results: A group of 1,239 users significantly reduced their BG avg consistently over three years by 15.6% (179±55 vs. 212±42) (p ​ 30 Table of Contents Digital Platform Users Managing Three Chronic Conditions Diabetes, Hypertension and Overweight Experience Better Outcomes than those Who Manage One Condition Following Six Months Monitoring several conditions on an integrated platform may have the potential to offer a greater means for a person with diabetes to effectively manage glycemia, engage with the treatment and improve outcomes.
Results: A group of 1,239 users significantly reduced their BG avg consistently over three years by 15.6% (179±55 vs. 212±42) (p Digital Platform Users Managing Three Chronic Conditions Diabetes, Hypertension and Overweight Experience Better Outcomes than those Who Manage One Condition Following Six Months Monitoring several conditions on an integrated platform may have the potential to offer a greater means for a person with diabetes to effectively manage glycemia, engage with the treatment and improve outcomes.
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.
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.
Some customers or other service providers may respond to these evolving laws and regulations by asking us to make certain privacy or data-related contractual commitments that we are unable or unwilling to make. This could lead to the loss of current or prospective customers or other business relationships.
Some customers or other service providers may respond to these evolving laws and regulations by asking us to make certain privacy or data-related contractual commitments that we are unable or unwilling to make.
For individuals who are less inclined to measure their blood glucose, coaching can help establish regular monitoring habits and to understand the importance of monitoring their levels. ​ In June 2023, we presented three clinical studies at the 83 th ADA conference: Blood Glucose Reduction and Long-term Sustainability in High-risk Patients with Type 2 Diabetes Over Three Years Using a Digital Platform The study showed that digital diabetes monitoring has the potential to enhance users’ awareness and affect and sustain glycemic control improvements over 3 years.
In June 2023, we presented three clinical studies at the 83 th ADA conference: Blood Glucose Reduction and Long-term Sustainability in High-risk Patients with Type 2 Diabetes Over Three Years Using a Digital Platform The study showed that digital diabetes monitoring has the potential to enhance users’ awareness and affect and sustain glycemic control improvements over 3 years.
The average number of blood glucose measurements increased by 34% (p 180 mg/dL) the average blood glucose and glucose variability were significantly reduced by 13% and 11% on average, respectively (p In August 2023, we presented an additional clinical study on the benefits of engagement with a digital therapeutic for better clinical outcomes at the Association of Diabetes Care & Education Specialists (ADCES) conference. ​ Users managing Diabetes with Large-scale Digital Therapeutics Platform Experience a Change in Blood Glucose and Engagement Over Two Years.
The average number of blood glucose measurements increased by 34% (p 180 mg/dL) the average blood glucose and glucose variability were significantly reduced by 13% and 11% on average, respectively (p In August 2023, we presented an additional clinical study on the benefits of engagement with a digital therapeutic for better clinical outcomes at the ADCES conference.
Results : A population of 119,482 platform users was included, Age: 53 ± 15; Gender: 51% women. High-risk subgroup included 31,562 users with first month (baseline) average BG>180 mg/dL.
Linear mixed effects models investigated changes in engagement and clinical outcomes. Results : A population of 119,482 platform users was included, Age: 53 ± 15; Gender: 51% women. High-risk subgroup included 31,562 users with first month (baseline) average BG>180 mg/dL.
Moreover, the 15 Table of Contents ratio of severe hyperglycemia events (>400 mg/dL) was decreased in 57.8% (from 0.90% to 0.38% of the entire measurements) at the same period. ​ Continuous Reduction of Blood Glucose Average during One Year of Glucose Monitoring Using Dario Digital Monitoring System in a High-Risk Population ● The study presented a reduction of 14% Blood Glucose average was observed in T2D within 12 months ● 76% of the population showed 24% improvement in Blood glucose average within 12 months Methods : An exploratory data analysis study reviewed a population of high-risk active type 2 Diabetic users with initial 30 days glucose average above 180 mg/dL during a full calendar year.
Continuous Reduction of Blood Glucose Average during One Year of Glucose Monitoring Using Dario Digital Monitoring System in a High-Risk Population ● The study presented a reduction of 14% Blood Glucose average was observed in T2D within 12 months ● 76% of the population showed 24% improvement in Blood glucose average within 12 months 20 Table of Contents Methods : An exploratory data analysis study reviewed a population of high-risk active type 2 Diabetic users with initial 30 days glucose average above 180 mg/dL during a full calendar year.
Future research should replicate our findings using a larger sample. ​ Methods : In this study (ClinicalTrials.gov: NCT04057248), 12 participants with baseline HbA1c >8.5% were provided with Dario digital therapeutic platform (connected blood glucose meter, test strips, mobile app and access to live CDCES). At both study enrollment and completion, participants completed blood testing and a satisfaction report.
Methods : In this study (ClinicalTrials.gov: NCT04057248), 12 participants with baseline HbA1c >8.5% were provided with Dario digital therapeutic platform (connected blood glucose meter, test strips, mobile app and access to live certified diabetes care and education specialist (“CDCES”)). At both study enrollment and completion, participants completed blood testing and a satisfaction report.
Notified Body certificates of conformity are valid for a fixed duration (which shall not exceed five years). Throughout the term of the certificate, the manufacturer will be subject to periodic surveillance audits to verify continued 40 Table of Contents compliance with the applicable requirements.
Notified Body certificates of conformity are valid for a fixed duration (which shall not exceed five years). Throughout the term of the certificate, the manufacturer will be subject to periodic surveillance audits to verify continued compliance with the applicable requirements. In particular, there will be a new audit by the Notified Body before it renews the relevant certificate(s).
The PCT application was transferred to us by our founders on October 27, 2011. This application covers the novel blood glucose measurement device, comprising the glucose meter; and an adaptor that connects the glucose meter to a smart-phone to receive power supply and data display, storage, and analysis.
This application covers the novel blood glucose measurement device, comprising the glucose meter; and an adaptor that connects the glucose meter to a smart-phone to receive power supply and data display, storage, and analysis.
See “Clinical Trials” above for clinical trials performed to date. 42 Table of Contents Post-Clearance Matters Even if the FDA or other non-US regulatory authorities approve or clear a device, they may limit its intended uses in such a way that manufacturing and distributing the device may not be commercially feasible.
Post-Clearance Matters Even if the FDA or other non-US regulatory authorities approve or clear a device, they may limit its intended uses in such a way that manufacturing and distributing the device may not be commercially feasible.
Updated Analysis combining 2017 and 2018 data totals 38,838 Type 2 Diabetes active users and 3,318,014 measurements show 14.3% decrease in high readings (180-400 mg/dL) and 9.2 % increase in In-range (80-120 mg/dL) readings. ​ A decrease in High Readings and Severe Hyperglycemic Events for People with T2D over the Full Year of 2017 in Users Monitoring with Dario Digital Diabetes Management System ● Reduction of 20% of High events (180-400 mg/dL) in T2D sustained within 12 months ● Reduction of 58% of Hyper events (>400mg/dL) in T2D within 12 months Methods: A retrospective data evaluation study was performed on the Dario TM cloud database.
A decrease in High Readings and Severe Hyperglycemic Events for People with T2D over the Full Year of 2017 in Users Monitoring with Dario Digital Diabetes Management System ● Reduction of 20% of High events (180-400 mg/dL) in T2D sustained within 12 months ● Reduction of 58% of Hyper events (>400mg/dL) in T2D within 12 months Methods: A retrospective data evaluation study was performed on the Dario TM cloud database.
During 3-month intervention, participants tracked their blood glucose levels through the app and were routinely contacted by CDCES. Clinical outcomes and self reported data before and after intervention were compared.
During 3-month intervention, participants tracked their blood glucose levels through the app and were routinely contacted by CDCES.
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.
Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: warning letters, 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 510(k) clearance or PMA approval of new products, rescinding previously granted 510(k) clearances or withdrawing previously granted PMA approvals.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

79 edited+28 added−38 removed244 unchanged
Biggest changeWe may receive less revenue from future products if any of our employees successfully claim for compensation for their work in developing our intellectual property, which in turn could impact our future profitability. 74 Table of Contents Risks Related to Our Industry We face intense competition in the digital support solution and the self-monitoring of blood glucose market, and as a result we may be unable to effectively compete in our industry.
Biggest changeRisks Related to Our Industry We face intense competition in the digital support solution and the self-monitoring of blood glucose market, and as a result we may be unable to effectively compete in our industry. In recent years, a number of digitally supported solutions have emerged to manage diabetes and other chronic conditions.
Our reliance on these third-party suppliers also subjects us to other risks that could harm our business, including: ● we are not a major customer of many of our suppliers, and these suppliers may therefore give other customers’ needs higher priority than ours; ● third parties may threaten or enforce their intellectual property rights against our suppliers, which may cause disruptions or delays in shipment, or may force our suppliers to cease conducting business with us; ● we may not be able to obtain an adequate supply in a timely manner or on commercially reasonable terms; ● our suppliers, especially new suppliers, may make errors in manufacturing that could negatively affect the efficacy or safety of the Dario Blood Glucose Monitoring System or cause delays in shipment; ● we may have difficulty locating and qualifying alternative suppliers; 59 Table of Contents ● switching components or suppliers may require product redesign and possibly submission to FDA, European Economic Area Notified Bodies, or other foreign regulatory bodies, which could significantly impede or delay our commercial activities; ● one or more of our sole- or single-source suppliers may be unwilling or unable to supply components of the Dario Blood Glucose Monitoring System; ● other customers may use fair or unfair negotiation tactics and/or pressures to impede our use of the supplier; ● the occurrence of a fire, natural disaster or other catastrophe impacting one or more of our suppliers may affect their ability to deliver products to us in a timely manner; and ● our suppliers may encounter financial or other business hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
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.
The completion of any future clinical trials for Dario or other trials that we may be required to undertake in the future could be delayed, suspended or terminated for several reasons, including: ● delay or failure in reaching agreement with regulatory authorities on a trial design that we are able to execute; ● delay or failure in obtaining authorization to commence a trial, including approval from the appropriate IRB to conduct testing of a product candidate on human subjects, or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; ● delay in reaching, or failure to reach, agreement on acceptable terms with prospective contract research organizations and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● failure or inability to conduct the clinical trial in accordance with regulatory requirements; 66 Table of Contents ● sites participating in the trial may drop out of the trial, which may require us to engage new sites for an expansion of the number of sites that are permitted to be involved in the trial; ● failure to initiate or delay of or inability to complete a clinical trial as a result of a clinical hold imposed by a regulatory authority due to observed safety findings or other reasons; ● delays that we may experience in patient enrollment or completion of certain trials; ● patients may not enroll in, remain in or complete, the clinical trial at the rates we expect; and ● clinical investigators may not perform our clinical trial on our anticipated schedule or consistent with the clinical trial protocol and good clinical practices.
The completion of any future clinical trials for Dario or other trials that we may be required to undertake in the future could be delayed, suspended or terminated for several reasons, including: ● delay or failure in reaching agreement with regulatory authorities on a trial design that we are able to execute; ● delay or failure in obtaining authorization to commence a trial, including approval from the appropriate IRB to conduct testing of a product candidate on human subjects, or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; ● delay in reaching, or failure to reach, agreement on acceptable terms with prospective contract research organizations and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● failure or inability to conduct the clinical trial in accordance with regulatory requirements; ● sites participating in the trial may drop out of the trial, which may require us to engage new sites for an expansion of the number of sites that are permitted to be involved in the trial; ● failure to initiate or delay of or inability to complete a clinical trial as a result of a clinical hold imposed by a regulatory authority due to observed safety findings or other reasons; ● delays that we may experience in patient enrollment or completion of certain trials; ● patients may not enroll in, remain in or complete, the clinical trial at the rates we expect; and ● clinical investigators may not perform our clinical trial on our anticipated schedule or consistent with the clinical trial protocol and good clinical practices.
If we fail to comply 65 Table of Contents with present or future regulatory requirements that are applicable to us, we may be subject to enforcement action by regulatory agencies, which may include, among others, any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees, and civil penalties; ● customer notification, or orders for repair, replacement or refunds; ● voluntary or mandatory recall or seizure of our current or future products; ● imposing operating restrictions, suspension or shutdown of production; ● refusing our requests for marketing authorization of new products, new intended uses or modifications to Dario or future products; ● suspending or withdrawing marketing authorizations that have already been granted; and ● criminal prosecution.
If 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 Dario fails to satisfy current or future customer requirements, we may be required to make significant expenditures to redesign the product, and we may have insufficient resources to do so. Dario is being designed to address an evolving marketplace and must comply with current and evolving customer requirements in order to gain market acceptance.
If Dario fails to satisfy current or future customer requirements, we may be required to make significant expenditures to redesign the product, and we may have insufficient resources to do so. Dario is designed to address an evolving marketplace and must comply with current and evolving customer requirements in order to gain market acceptance.
According to our management’s estimates, based on our current cash on hand and further based on our budget and the assumption that initial commercial sales will commence during our anticipated timeframes, we believe that we will have sufficient resources to continue our activities through 202 5 . 56 Table of Contents Since we might be unable to generate sufficient revenue or cash flow to fund our operations for the foreseeable future, we will need to seek additional equity or debt financing to provide the capital required to maintain or expand our operations.
According to our management’s estimates, based on our current cash on hand and further based on our budget and the assumption that initial commercial sales will commence during our anticipated timeframes, we believe that we will have sufficient resources to continue our activities through 202 5 . 60 Table of Contents Since we might be unable to generate sufficient revenue or cash flow to fund our operations for the foreseeable future, we will need to seek additional equity or debt financing to provide the capital required to maintain or expand our operations.
If reimbursement of our product candidates is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability. Our Dario Solution and associated business processes may contain undetected errors, which could limit our ability to provide our services and diminish the attractiveness of our service offerings.
If reimbursement of our product candidates is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability. Our Dario platform and associated business processes may contain undetected errors, which could limit our ability to provide our services and diminish the attractiveness of our service offerings.
If we are unable to modify our products to keep pace with such technological changes, it would have a material adverse effect the ability of our customers to use our products, which would materially harm our business. 62 Table of Contents As we conduct business internationally, we are susceptible to risks associated with international relationships.
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.
The failure of our online marketing efforts would significantly and negatively impact our ability to generate sales. 60 Table of Contents Our Dario application, which is a key to our business model, is available via Apple’s App Store and via Google’s Android platforms and maybe in the future via additional platforms.
The failure of our online marketing efforts would significantly and negatively impact our ability to generate sales. 64 Table of Contents Our Dario application, which is a key to our business model, is available via Apple’s App Store and via Google’s Android platforms and maybe in the future via additional platforms.
If third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain are compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, any clinical trials such third parties are associated with may be extended, delayed or terminated, and we may not be able to obtain marketing authorization for or successfully commercialize our product candidates.
If third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain are compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, any clinical trials such third parties are associated with may be extended, 71 Table of Contents delayed or terminated, and we may not be able to obtain marketing authorization for or successfully commercialize our product candidates.
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.
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 contrast, revenue from our on-premise 61 Table of Contents software and hardware sales is generally recognized in full at the time of delivery. Accordingly, the SaaS delivery model creates risks related to the timing of revenue recognition not associated with our traditional on-premise software delivery model and hardware sales.
In contrast, revenue from our on-premise 65 Table of Contents software and hardware sales is generally recognized in full at the time of delivery. Accordingly, the SaaS delivery model creates risks related to the timing of revenue recognition not associated with our traditional on-premise software delivery model and hardware sales.
The occurrence of any or all of these risks could adversely affect our international business and, consequently, our results of operations and financial condition. 63 Table of Contents We expect to be exposed to fluctuations in currency exchange rates, which could adversely affect our results of operations.
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.
For example, as of October 2023, all 510(k) applications (unless specifically exempted) must be submitted to the FDA electronically using the electronic submission template and resource, or eSTAR, and the Center for Devices and Radiological Health (CDRH) Portal.
For example, as of October 2023, all 510(k) applications (unless specifically exempted) must be submitted to the FDA electronically using the electronic submission template and resource, or eSTAR, and the Center for Devices and Radiological Health (“CDRH”) Portal.
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.
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.
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.
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.
We must also obtain regulatory approvals of Dario in certain 58 Table of Contents jurisdictions as well as approval for insurance reimbursement in order to initiate sales of Dario, each of which is subject to risk and potential delays, and neither of which may actually occur. As such, we cannot accurately predict the volume or timing of any future sales.
We must also obtain regulatory approvals of Dario in certain jurisdictions as well as approval for insurance reimbursement in order to initiate sales of Dario, each of which is subject to risk and potential delays, and neither of which may actually occur. As such, we cannot accurately predict the volume or timing of any future sales.
In addition, there has been heightened governmental scrutiny, including increasing legislative and enforcement interest, in recent years over the manner in which manufacturers set prices for their marketed healthcare products, which has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring 69 Table of Contents more transparency to healthcare product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for healthcare products.
In addition, there has been heightened governmental scrutiny, including increasing legislative and enforcement interest, in recent years over the manner in which manufacturers set prices for their marketed healthcare products, which has resulted in several Congressional inquiries and proposed and enacted legislation designed, among other things, to bring more transparency to healthcare product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for healthcare products.
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.
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.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third 73 Table of Contents parties to assert claims against us.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
Further regulatory efforts by the FDA or other federal or state regulatory authorities could 68 Table of Contents lead to new, onerous cybersecurity requirements in the future as well as additional product liability or other litigation risks if any of our products is considered to be susceptible to third-party tampering.
Further regulatory efforts by the FDA or other federal or state regulatory authorities could lead to new, onerous cybersecurity requirements in the future as well as additional product liability or other litigation risks if any of our products is considered to be susceptible to third-party tampering.
If the market for Dario or any future product fails to develop or develops more slowly than expected, or if any of the technology and standards supported by us do not achieve or sustain market acceptance, our business and operating results would be materially and adversely affected.
If the market for Dario or any future product fails to develop or develops more slowly than expected, or if any of the technology and standards 62 Table of Contents supported by us do not achieve or sustain market acceptance, our business and operating results would be materially and adversely affected.
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.
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.
Our success in 75 Table of Contents marketing our services depend and will depend in large part on whether U.S. and international government health administrative authorities, private health insurers and other organizations adequately cover and reimburse customers for the cost of our products and services.
Our success in marketing our services depend and will depend in large part on whether U.S. and international government health administrative authorities, private health insurers and other organizations adequately cover and reimburse customers for the cost of our products and services.
There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares. ​ Item 1B. Unresolved Staff Comments Not applicable. 81 Table of Contents ​
There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares. ​ Item 1B. Unresolved Staff Comments Not applicable. ​
The Dario Management Solution may contain undetected errors, defects or bugs. As a result, our customers or end users may discover errors or defects in our products, software or the systems we design, or the products or systems incorporating our designs and intellectual property may not operate as expected.
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.
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 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.
In addition, since 72 Table of Contents the publication of discoveries in scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were the first to make our inventions or to file patent applications covering those inventions.
In addition, since the publication of discoveries in scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were the first to make our inventions or to file patent applications covering those inventions.
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. The market price of our common stock may be significantly volatile.
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 our independent clinical investigators and contract research 67 Table of Contents organizations fail to comply with GCP, the results of our clinical trials could be called into question and the clinical development of our product candidates could be delayed.
If our independent clinical investigators and contract research organizations fail to comply with GCP, the results of our clinical trials could be called into question and the clinical development of our product candidates could be delayed.
Our product offering consists of our DarioEngage software platform, where we digitally engage with Dario users, assist them in monitoring their chronic illnesses and provide them with coaching, support, digital communications, and real-time alerts, trends and pattern analysis.
Our product offering consists of our digital health engagement platform, where we digitally engage with Dario users, assist them in monitoring their chronic illnesses and provide them with coaching, support, digital communications, and real-time alerts, trends and pattern analysis.
We expect that the DarioEngage software platform may be leveraged by our potential partners, such as clinics, health care service providers, employers, and payers for scalable monitoring of people with diabetes in a cost-effective manner, which we expect will open for us additional revenue streams.
We expect that our digital health engagement platform may be leveraged by our potential partners, such as clinics, health care service providers, employers, and payers for scalable monitoring of people with diabetes in a cost-effective manner, which we expect will open for us additional revenue streams.
We expect to derive substantially all of our revenues from our principal technology, which leaves us subject to the risk of reliance on such technology. We expect to derive substantially all of our revenues from sales of products derived from our principal technology. Our initial product utilizing this technology is Dario.
We 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.
Consequently, we may incur substantial expenses and devote significant management effort and expense in developing customer adoption of Dario which may not result in revenue generation.
Consequently, we may incur substantial expenses and devote significant management effort and expense in developing customer adoption of our platform which may not result in revenue generation.
The action plan must describe appropriate diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them.
The action plan must describe appropriate diversity goals for enrollment, as well as a rationale for the goals and a description of how 70 Table of Contents the sponsor will meet them.
Therefore, the success of our DarioEngage software platform will depend entirely on our potential partners’ adoption of the platform and we cannot assure you that our potential partners will do so, or, if adopted, that they will continue to use the platform continually and for an extended period of time.
Therefore, the success of our digital health engagement platform will depend entirely on our potential partners’ adoption of the platform and we cannot assure you that our potential partners will do so, or, if adopted, that they will continue to use the platform continually and for an extended period of time.
We filed a Patent Cooperation Treaty (or PCT) application for a “Fluids Testing Apparatus and Methods of Use” in May 2011 which incorporates two U.S. provisional applications submitted in the preceding year.
We filed a PCT application for a “Fluids Testing Apparatus and Methods of Use” in May 2011 which incorporates two U.S. provisional applications submitted in the preceding year.
Our certificate of incorporation and bylaws: ● authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to thwart a takeover attempt; ● provide that vacancies on our Board of Directors, including newly created directorships, may be filled only by a majority vote of directors then in office; ● provide that special meetings of stockholders may only be called by our Chairman, Chief Executive Officer and/or President or other executive officer, our Board of Directors or a super-majority (66 2/3%) of our stockholders; ● place restrictive requirements (including advance notification of stockholder nominations and proposals) on how special meetings of stockholders may be called by our stockholders; ● do not provide stockholders with the ability to cumulate their votes; and ● provide that our Board of Directors or a super-majority of our stockholders (66 2/3%) may amend our bylaws.
Our certificate of incorporation and bylaws: ● authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to thwart a takeover attempt; ● provide that vacancies on our Board of Directors, including newly created directorships, may be filled only by a majority vote of directors then in office; ● provide that special meetings of stockholders may only be called by our Chairman, Chief Executive Officer and/or President or other executive officer, our Board of Directors or a super-majority (66 2/3%) of our stockholders; ● place restrictive requirements (including advance notification of stockholder nominations and proposals) on how special meetings of stockholders may be called by our stockholders; ● do not provide stockholders with the ability to cumulate their votes; and ● provide that our Board of Directors or a super-majority of our stockholders (66 2/3%) may amend our bylaws. 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.
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, and Richard Anderson, our President and General Manager for North America.
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.
If we cannot encourage potential partners to utilize our DarioEngage software platform we may not succeed in marketing the product to our potential partners, the failure of which may materially and adversely affect our business and operating results. We only recently began commercializing Dario, and our success will depend on the acceptance of Dario in the healthcare market.
If we cannot encourage potential partners to utilize our digital health engagement platform we may not succeed in marketing the product to our potential partners, the failure of which may materially and adversely affect our business and operating results. The success of our Dario product will depend on the acceptance of Dario in the healthcare market.
We cannot accurately predict the volume or timing of any future sales, making the timing of any revenues difficult to predict. We may be faced with lengthy customer evaluation and approval processes associated with Dario.
We cannot accurately predict the volume or timing of any future sales, making the timing of any revenues difficult to predict. We may be faced with lengthy customer evaluation and approval processes associated with the adoption of our digital health engagement platform.
In addition, we only recently transformed our business to primarily focus on the sale of our digital support solution, which joins a crowded field of competitors such as Amazon, Apple and Google.
We will also compete with numerous second-tier and third-tier competitors. In addition, we only recently transformed our business to primarily focus on the sale of our digital support solution, which joins a crowded field of competitors such as Amazon, Apple and Google.
Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials. 71 Table of Contents 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 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.
We have financed our operations primarily through private placements and public offerings of common stock and have incurred losses in each year since inception including net losses of $59,427,000 and $62,193,000 in 2023 and 2022, respectively. Our accumulated deficit at December 31, 2023 was approximately $349,361,000. We do not know whether or when we will become profitable.
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.
If we fail to maintain effective internal control over financial reporting, the price of our common stock may be adversely affected. Our internal control over financial reporting may have weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our common stock.
Our internal control over financial reporting may have weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our common stock. We are required to establish and maintain appropriate internal control over financial reporting.
If 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.
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.
Competition in the digitally supported solutions market and BGMS market is extremely intense, which can lead to, among other things, price reductions, longer selling cycles, lower product margins, loss of market share and additional working capital requirements.
(a division of Teladoc), Calm.com, Inc., and Talkspace, Inc., compete in the B2B behavioral health marketplace. Competition in the digitally supported solutions market and BGMS market is extremely intense, which can lead to, among other things, price reductions, longer selling cycles, lower product margins, loss of market share and additional working capital requirements.
As such, this limited operating history may not be adequate to enable you to fully assess our ability to develop and commercialize the Dario Smart Diabetes Management Solution, achieve market acceptance of the Dario Smart Diabetes Management Solution, develop other products and respond to competition.
As such, this limited operating history may not be adequate to enable you to fully assess our ability to develop commercialize and achieve market acceptance of the Dario digital platform.
We are required to establish and maintain appropriate internal control over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial condition or results of operations.
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.
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.
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.
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.
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.
Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In addition, in the United States, no uniform policy of coverage and reimbursement for medical device products and services exists among third-party payors. Therefore, coverage and reimbursement for medical device products and services can differ significantly from payor to payor.
In addition, in the United States, no uniform policy of coverage and reimbursement for medical device products and services exists among third-party payors. Therefore, coverage and reimbursement for medical device products and services can differ significantly from payor to payor.
Our competitors vary by intervention (devices, applications, coaching and analytics), by channel (health plan, pharma, provider, employer) and by condition (including, for example, diabetes, MSK, blood hypertension, and others). Certain of our competitors offer this integrated approach in varying degrees, including, among others, Hinge Health, Inc., Livongo Health Inc.
Our competitors vary by intervention (devices, applications, coaching and analytics), by channel (health plan, pharma, provider, employer) and by condition (including, for example, diabetes, MSK, blood hypertension, and 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.
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.
In order to do so, we may need to pay higher compensation or fees to our employees or consultants than we 64 Table of Contents currently expect, and such higher compensation payments would have a negative effect on our operating results.
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.
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.
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.
Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal control over financial reporting may have an adverse impact on the price of our common stock. 80 Table of Contents Anti-takeover provisions in our charter documents and Delaware law could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock and warrants.
Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal control over financial reporting may have an adverse impact on the price of our common stock.
We are dependent upon third-party manufacturers and suppliers making us vulnerable to supply shortages and problems and price fluctuations, which could harm our business.
We may be unable to develop other products utilizing our technology, which would likely lead to the failure of our business. We are dependent upon third-party manufacturers and suppliers making us vulnerable to supply shortages and problems and price fluctuations, which could harm our business.
As such, any factor adversely affecting sales of Dario, including the product release cycles, regulatory issues, market acceptance, product competition, performance and reliability, reputation, price competition and economic and market conditions, would likely harm our operating results. We may be unable to develop other products utilizing our technology, which would likely lead to the failure of our business.
As such, any factor adversely affecting sales of our digital health engagement platform, including the product release cycles, regulatory issues, market acceptance, product competition, performance and reliability, reputation, price competition and economic and market conditions, would likely harm our operating results.
Certain of these individuals also have significant control over our business, policies and affairs as officers or directors of our company. Therefore, you should not invest in reliance on your ability to have any control over our company.
Certain of these individuals also have significant control over our business, policies and affairs as officers or directors of our company.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.
Competition for experienced, high-quality personnel is intense and we cannot assure that we will be able to recruit and retain such personnel. We may not be able to hire or retain the necessary personnel to implement our business strategy. Our failure to hire and retain such personnel could impair our ability to develop new products and manage our business effectively.
We may not be able to hire or retain the necessary personnel to implement our business strategy. Our failure to hire and retain such personnel could impair our ability to develop new products and manage our business effectively. We may not generate the expected benefits of our acquisition of Twill.
Part of our business plan includes the storage and potential monetization of medical data of users of Dario. 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.
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.
Access to adequate coverage and reimbursement for Center for Medicare and Medicaid Services (CMS) procedures using our products and services (and our other products and services in development) by third-party payors is essential to the acceptance of our products by our customers.
Access to adequate coverage and reimbursement for CMS procedures using our products and services (and our other products and services in development) by third-party payors is essential to the acceptance of our products by our customers. 79 Table of Contents Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs.
To date, we have received regulatory authorization in Australia, Canada, Israel, Italy, the Netherlands, New Zealand, the United Kingdom, and the United States. The research, design, testing, manufacturing, labeling, selling, marketing and distribution of medical devices are subject to extensive regulation by the FDA and non-U.S. regulatory authorities, which regulations differ from country to country.
The research, design, testing, manufacturing, labeling, selling, marketing and distribution of medical devices are subject to extensive regulation by the FDA and non-U.S. regulatory authorities, which regulations differ from country to country. In particular, marketing authorization requirements vary between countries and can involve additional product testing and additional administrative review periods.
Risks Related to Product Development and Regulatory Approval The regulatory clearance process which we must navigate is expensive, time-consuming, and uncertain and may prevent us from obtaining clearance for the commercialization of Dario or our any future product. We are not permitted to market Dario in any jurisdiction until we receive marketing authorization from the applicable regulatory authority.
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.
Following the attack, Israel’s security cabinet declared war against Hamas and the Israeli military began to call-up reservists for active duty. Moreover, the clash between Israel and Hezbollah in Lebanon, may escalate in the future into a greater regional conflict.
Following the attack, Israel’s security cabinet declared war against Hamas and the Israeli military began to call-up reservists for active duty. At the same time, and because of the war declaration against Hamas, the clash between Israel and Hezbollah in Lebanon had escalated to an armed conflict, which included daily attacks on Israel.
As a result, it is unclear whether and, if so, to what extent our employees may be able to claim compensation with respect to our future revenue.
As a result, it is unclear whether and, if so, to what extent our employees may be able to claim compensation with respect to our future revenue. We may receive less revenue from future products if any of our employees successfully claim for compensation for their work in developing our intellectual property, which in turn could impact our future profitability.
We may be subject to claims for rescission or damages in connection with certain sales of shares of our securities.
Our ability to generate revenue and achieve profitability depends upon our ability, alone or with others, to commercialize our digital health engagement platform. We may be unable to achieve this goal. We may be subject to claims for rescission or damages in connection with certain sales of shares of our securities.
Product liability claims in excess of our insurance coverage would be paid out of cash reserves harming our financial condition and adversely affecting our results of operations. 70 Table of Contents 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.
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.
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. Our failure to company with all laws, rules and regulations applicable to U.S. public companies could subject us or our management to regulatory scrutiny or sanction, which could harm our reputation and stock price.
Our failure to company with all laws, rules and regulations applicable to U.S. public companies could subject us or our management to regulatory scrutiny or sanction, which could harm our reputation and stock price. If we fail to maintain effective internal control over financial reporting, the price of our common stock may be adversely affected.
Risks Related to the Ownership of Our Common Stock Our officers and directors may exert significant influence over our affairs, including the outcome of matters requiring stockholder approval. As of the date of this Annual Report, our officers and directors collectively have a beneficial ownership interest of approximately 15.7% of our Company.
As of the date of this Annual Report, our officers and directors collectively have a beneficial ownership interest of approximately 14.4% of our Company.
Their dominant market position since the late 1990s, and significant control over the market could significantly limit our ability to introduce Dario or effectively market and generate sales of the product. We will also compete with numerous second-tier and third-tier competitors.
The first four of these companies has a combined majority market share of the BGMS business and strong research and development capacity for next-generation products. Their dominant market position since the late 1990s, and significant control over the market could significantly limit our ability to introduce Dario or effectively market and generate sales of the product.
In the event that we are required to make payments to investors as a result of these unregistered sales of securities, our liquidity could be negatively impacted. 57 Table of Contents Risks Related to Our Business There is no assurance that our DarioEngage software platform will succeed or be adopted by healthcare providers.
In the event that we are required to make payments to investors as a result of these unregistered sales of securities, our liquidity could be negatively impacted. 61 Table of Contents Our revenues are concentrated with a major customer, and our revenues may decrease significantly if we were to lose our major customer.
We may not generate the expected benefits of our acquisition of Twill, and the integration of this business could disrupt our ongoing business, distract our management and increase our expenses. Through our acquisitions of Twill, we expanded our product offering to include digital-first solutions with a mission to improve users mental and physical health.
Through our acquisitions of Twill, we expanded our product offering to include digital-first solutions with a mission to improve users mental and physical health. There can be no assurance that these acquisitions will provide the benefits we expect or that we will be able to develop the operations of Twill successfully.
With our first product, Dario, we compete directly and primarily with large pharmaceutical and medical device companies such as Abbott Laboratories, Asensia (formerly Bayer Diabetes Care), Johnson & Johnson LifeScan, Roche Diagnostics and Sanofi. The first four of these companies has a combined majority market share of the BGMS business and strong research and development capacity for next-generation products.
Competitors are developing new technologies rapidly and, in some cases, are also expanding to manage other chronic conditions. With our first product, Dario, we compete directly and primarily with large pharmaceutical and medical device companies such as Abbott Laboratories, Asensia (formerly Bayer Diabetes Care), Johnson & Johnson LifeScan, Roche Diagnostics and Sanofi.
Such disruption could materially adversely affect our business, financial condition and results of operations. 77 Table of Contents Investors may have difficulties enforcing a U.S. judgment, including judgments based upon the civil liability provisions of the U.S. federal securities laws, against us, or our executive officers and directors or asserting U.S. securities laws claims in Israel.
Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. ​ Investors may have difficulties enforcing a U.S. judgment, including judgments based upon the civil liability provisions of the U.S. federal securities laws, against us, or our executive officers and directors or asserting U.S. securities laws claims in Israel.
Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business and operations. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries.
In addition, most of our executive officers are residents of Israel, although the majority of our employees are located outside of Israel. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its Arab neighbors.
In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management.
Many Israeli citizens who have served in the army are required to perform reserve duty until they reach the age of 40 or older, depending upon the nature of their military service. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management.
Removed
Our ability to generate revenue and achieve profitability depends upon our ability, alone or with others, to launch Dario in additional European countries, and elsewhere and manufacture, market and sell Dario where approved. We may be unable to achieve any or all of these goals.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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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.
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.
Removed
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

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Biggest changeThe rental agreement will be extended automatically for an additional 60 months following expiration of the initial term. The monthly rent and management services under this lease are approximately $22,400. ​
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. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. 82 Table of Contents PART II
Biggest changeMine Safety Disclosures Not applicable. ​ ​ 86 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

20 edited+4 added−5 removed18 unchanged
Biggest changeThe entire 100,000 performance options will vest upon achieving 2024 revenue targets if the 2023 revenue target was not achieved. (6) In April 2023, our Board approved the grant of certain non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired Chief Product Officer.
Biggest change(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.
(4) In July 2021, our Board approved the grant of certain non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired Special Vice President of Market Access.
(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.
One third vest after one year and the balance vest over eight quarterly installments after the first anniversary; these options have a cashless exercise feature and a six-year term. 22,500 options will commence vesting every calendar year for the next four years, commencing in 2021, and only if certain performance milestones were met in the immediately preceding year. 22,500 of these options have expired on each of January 1, 2021, January 1, 2022, January 1, 2023 and January 1, 2024 as the performance milestones were not met.
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.
(3) In March 2020, our Board approved the grant of certain non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired Chief Medical Officer.
(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.
On September 2, 2020 and October 14, 2020, respectively, our Board of Directors and stockholders 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 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 February 2, 2017 and March 9, 2017, respectively, our Board of Directors and stockholders approved 84 Table of Contents an amendment to the 2012 Equity Incentive Plan increasing the number of shares of common stock available under the plan to 2,373,000.
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.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is quoted on the Nasdaq Capital Market under the symbol “DRIO”. Record Holders As of March 22, 2024, we had 342 stockholders of record of our common stock.
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.
The options have an exercise price of $3.93 per share, 100,000 options are time based and vest over a three-ear period. One third vests after one year and the balance vests over eight quarterly installments after the first anniversary; these options have a cashless exercise feature and a ten-year term.
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.
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.
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.
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 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.
The 2020 Equity Incentive Plan provides that in the event of a change of control event, the Compensation Committee or our Board of Directors shall have the discretion to determine whether and to what extent to accelerate the vesting, exercise or payment of an award. 85 Table of Contents In addition, our Board of Directors may amend our 2020 Equity Incentive Plan at any time.
The 2020 Equity Incentive Plan provides that in the event of a change of control event, the Compensation Committee or our Board of Directors shall have the discretion to determine whether and to what extent to accelerate the vesting, exercise or payment of an award.
The options have an exercise price of $8.41 per share. 90,000 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 six-year term.
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.
(5) In January 2023, our Board approved the grant of certain non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired Senior Vice President of Growth. The options have an exercise price of $5.97 per share, 100,000 options are time based and vest over a three-year period.
(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.
Securities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2023: The following table provides information as of December 31, 2023, with respect to options outstanding under the Company’s Amended and Restated 2012 Equity Incentive Plan (the “2012 Equity Incentive Plan”), the Company’s 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”), and the Company’s other equity compensation arrangements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of securities ​ ​ ​ ​ ​ ​ ​ ​ ​ to be issued upon ​ Weighted-average ​ ​ ​ ​ ​ ​ exercise of ​ exercise price of ​ Number of securities ​ ​ ​ ​ outstanding options, ​ outstanding options, ​ remaining available Plan category ​ Forfeited shares (7) warrants and rights warrants and rights for future issuance Equity compensation plans approved by security holders ​ 143,946 1,987,896 ​ $ 9.59 1,650,197 Equity compensation plans not approved by security holders (1) ​ ​ 433 ​ $ 2,502.00 — Equity compensation plans not approved by security holders (2) ​ ​ 112,500 ​ $ 8.41 — Equity compensation plans not approved by security holders (3) ​ ​ 50,000 ​ $ 5.75 — Equity compensation plans not approved by security holders (4) ​ ​ 20,000 ​ $ 18.62 — Equity compensation plans not approved by security holders (5) ​ ​ ​ 200,000 ​ $ 5.97 ​ — Equity compensation plans not approved by security holders (6) ​ ​ ​ 180,000 ​ ​ 3.93 ​ — Total ​ 143,946 2,550,829 ​ ​ ​ 1,650,197 In March 2013, our Board adopted a non-employee director’s remuneration policy.
Securities 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.
(7) 143,946 restricted shares of common stock issued to certain of our employees were forfeited, as they were not vested upon certain employee departures. On January 23, 2012, our Board of Directors and a majority of the holders of our then outstanding shares of our common stock adopted our 2012 Equity Incentive Plan (which includes both U.S. and Israeli sub-plans).
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).
Unregistered Sales of Equity Securities and Use of Proceeds During the fourth quarter of 2023, we issued an aggregate 30,167 shares of our common stock to certain of our service providers as compensation to them for services rendered. ​ We claimed exemption from registration under the Securities Act of 1933, as amended, or the Securities Act, for the foregoing transactions under Section 4(a)(2) of the Securities Act. ​ Item 6. [Reserved] ​
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.
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.
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.
These options have an exercise price of $2,502.00 vest in 4 quarterly installments in arrears, have a cashless exercise feature and a ten-year term. 83 Table of Contents (2) In January 2020, our Board approved the grant of non-plan options as a material inducement for employment, in accordance with Nasdaq Listing Rule 5635(c)(4), to our newly hired President and General Manager for North America.
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.
On January 1, 2024, the number of shares of common stock available under the plan increased to 8,356,624 according to the terms thereof. As of March 22, 2024, there were 1,004,832 shares of Common Stock reserved for issuance thereunder.
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.
Awards previously granted under our 2020 Equity Incentive Plan may not be impaired or affected by any amendment of such without the consent of the affected grantees. Option Exercises To date, no options have been exercised by our directors or officers.
Option Exercises To date, no options have been exercised by our directors or officers.
Removed
(1) On May 2014, our Board approved the grant of non-plan options to the Company’s Scientific Advisory Board (“SAB”).
Added
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.
Removed
An additional 90,000 options are performance based, and vest over a three-year period.
Added
In addition, our Board of Directors may amend our 2020 Equity Incentive Plan at any time.
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 ten-year term.
Added
Erez Raphael, our Chief Executive Officer, and Mr.
Removed
An additional 100,000 options are performance based, and vest over a three-year period. 50,000 performance options will vest upon achieving 2023 or 2024 revenue targets upon the release by the corporation of its annual consolidated financial statements according to GAAP, and 50,000 additional performance options will vest upon achieving 2024 revenue targets.
Added
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] ​
Removed
An additional 80,000 options are performance based, and vest upon achieving personal objective that were set up within sixty days from commencement of employment. The performance-based options expired on January 1, 2024 as the performance milestones were not met.

Item 7. Management's Discussion & Analysis

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

68 edited+26 added−19 removed65 unchanged
Biggest changeIn 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 $4.0001 per share. 94 Table of Contents ​ On May 1, 2023, we entered into securities purchase agreements (each, a “Series B Purchase Agreement”) with accredited investors relating to an offering and the sale of an aggregate of 6,200 shares of newly designated Series B Preferred Stock (the “Series B Preferred Stock”), an aggregate of 7,946 shares of Series B-1 Preferred Stock (the “Series B-1 Preferred Stock”), and an aggregate of 150 shares of Series B-2 Preferred Stock (the “Series B-2 Preferred Stock”) at a purchase price of $1,000 for each share of Preferred Stock.
Biggest changeIn 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.
On January 26, 2021, we entered into securities purchase agreements with institutional accredited investors relating to an offering with respect to the sale of an aggregate of 3,278,688 shares of the Company’s common stock at a purchase price of $21.35 per share, for aggregate gross proceeds of $70,000,000. The closing of the offering was consummated on February 1, 2021.
On January 26, 2021, we entered into securities purchase agreements with institutional accredited investors relating to an offering with respect to the sale of an aggregate of 3,278,688 shares of the Company’s common stock at a purchase price of $21.35 per share, for aggregate gross proceeds of $70,000. The closing of the offering was consummated on February 1, 2021.
On October 22, 2021, we entered into a Sales Agreement (“Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $50,000,000 from time to time through Cowen.
On October 22, 2021, we entered into a Sales Agreement (“Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $50,000 from time to time through Cowen.
Pursuant to the Preferred Agreement, we agreed to issue such holders of Series A-1 Convertible 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 Convertible 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 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.
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 (the “Closing Date”), (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.
The holders of Series A-1 Convertible Preferred Stock will not be entitled to receive any such shares if the issuance of such shares will exceed a non-waivable 19.99% ownership blocker.
The holders of Series A-1 Preferred Stock will not be entitled to receive any such shares if the issuance of such shares will exceed a non-waivable 19.99% ownership blocker.
The LSA provides for a four-year secured credit facility in an aggregate principal amount of up to $40 million (the “Loan Facility”), of which $30 million was made available on the closing date (the “Initial Tranche”) and up to $10 million (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 “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.
We began our sales in the direct-to- 86 Table of Contents consumer space, solving first for what we deemed the most difficult problems: how to engage users and support behavior change to improve clinical outcomes in diabetes. Our most developed AI tools leverage the direct-to-consumer experience from over 150,000 members to drive superior engagement and outcomes.
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.
On February 15, 2024, we entered into securities purchase agreements (each, a “Series C Purchase Agreement”) with accredited investors relating to an offering (the “Offering”) and the sale of an aggregate of (i) 17,307 shares of newly designated Series C Preferred Stock (the “Series C Preferred Stock”), and (ii) 4,000 shares of Series C-1 Preferred Stock (the “Series C-1 Preferred Stock”), at a purchase price of $1,000 for each share of Preferred Stock.
On February 15, 2024, we entered into securities purchase agreements (each, a “Series C Purchase Agreement”) with accredited investors relating to an offering (the “Series C Offering”) and the sale of an aggregate of (i) 17,307 shares of newly designated Series C Preferred Stock (the “Series C Preferred Stock”), and (ii) 4,000 shares of Series C-1 Preferred Stock (the “Series C-1 Preferred Stock”), at a purchase price of $1,000 for each share of preferred stock.
The Borrowers shall repay amounts outstanding under the Loan Facility in full immediately upon an acceleration as a result of an event of default as set forth in the LSA. ​ During the term of the Loan Facility, interest payable in cash by the Borrowers shall accrue on any outstanding balance due under the Loan Facility at a rate per annum equal to the higher of (x) the sum of four one-half percent (4.50%) plus the prime rate as published in the Wall Street Journal and (y) twelve and one-half percent (12.50%).
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%).
In addition, on February 16, 2024, the Company 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 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.
During the year ended December 31, 2023, we sold 408,043 shares of our common stock under the Sales Agreement for aggregate net proceeds of approximately $1,614,000. ​ On February 28, 2022, we entered into securities purchase agreements with institutional accredited investors relating to a registered direct offering with respect to the sale of an aggregate of 4,674,454 shares of our common stock and pre-funded warrants to purchase an aggregate of 667,559 shares of our common stock, at a purchase price of $7.49 per share.
During the year ended December 31, 2023, we sold 408,043 shares of our common stock under the Sales Agreement for aggregate net proceeds of approximately $1,614, The Sales Agreement has since expired. ​ On February 28, 2022, we entered into securities purchase agreements with institutional accredited investors relating to a registered direct offering with respect to the sale of an aggregate of 4,674,454 shares of our common stock and pre-funded warrants to purchase an aggregate of 667,559 shares of our common stock, at a purchase price of $7.49 per share.
As a result of the sale of the Preferred Stock, the aggregate gross proceeds to the Company 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 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.
Such shares of common stock are issuable on the following dates, assuming the Series A-1 Convertible Preferred Stock has not yet been converted: (i) up to an aggregate of 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 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.
On May 5, 2023, we entered into purchase agreements (the “Series B-3 Purchase Agreement” and together with the Series B Purchase Agreement, the “Purchase Agreement”) with accredited investors, relating to the Offering, to an offering and the sale of an aggregate of 1,106 shares of newly designated Series B-3 Preferred Stock (the “Series B-3 Preferred Stock” and, collectively with the Series B Preferred Stock, the Series B-1 Preferred Stock and the Series B-2 Preferred Stock, the “Preferred Stock”), at a purchase price of $1,000 for each share of Preferred Stock.
On May 5, 2023, we entered into purchase agreements (the “Series B-3 Purchase Agreement” and together with the Series B Purchase Agreement, the “Purchase Agreement”) with accredited investors, relating to the Offering, to an offering and the sale of an aggregate of 1,106 shares of newly designated Series B-3 Preferred Stock (the “Series B-3 Preferred Stock”), at a purchase price of $1,000 for each share of preferred stock.
The Company and the investors participating in the offering also executed a registration rights agreement pursuant to which the Company agreed to file a registration statement covering the resale of the shares within sixty (60) days following the final closing of the offering.
We and the investors participating in the offering also executed a registration rights agreement pursuant to which we agreed to file a registration statement covering the resale of the shares within sixty (60) days following the final closing of the offering.
The Company has agreed to seek stockholder approval within 135 days following the closing of the Merger to permit the full exercise of the Pre-Funded Warrants (the “Warrant Vote”). In addition, we entered into voting agreements with certain existing 87 Table of Contents stockholders to vote in favor of the Warrant Vote.
The Company has agreed to seek stockholder approval within 135 days following the closing of the Merger to permit the full exercise of the Pre-Funded Warrants (the “Warrant Vote”). In addition, we entered into voting agreements with certain existing stockholders to vote in favor of the Warrant Vote.
We derive our revenue principally from: Consumers revenue 88 Table of Contents We consider customer and distributers purchase orders to be the contracts with a customer. For each contract, we consider the promise to transfer tangible products and/or services, each of which are distinct, to be the identified performance obligations.
We 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.
All renovations and betterments that extend the economic useful lives of assets and/or improve the performance of the production lines are capitalized. 89 Table of Contents Useful Lives of Assets .
All renovations and betterments that extend the economic useful lives of assets and/or improve the performance of the production lines are capitalized. 93 Table of Contents Useful Lives of Assets .
On May 1, 2023, we executed an agreement (the “Preferred Agreement”) with existing holders of our Series A-1 Convertible Preferred Stock.
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”).
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. As our standard payment terms are less than one year, the contracts have no significant financing component.
In determining the transaction price, we evaluate whether the price is subject to rebates and 92 Table of Contents adjustments to determine the net consideration to which we expect to receive. As our standard payment terms are less than one year, the contracts have no significant financing component.
GAAP) audited statement of operations of the revaluation of the warrants and the expense related to stock-based compensation, each as discussed herein above. ​ 92 Table of Contents ​ A reconciliation to the most directly comparable U.S.
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.
Tax Cuts and Jobs Act of 2017 (the “TCJA”) modified the rules regarding utilization of net operating loss and net operating losses generated subsequent to the TCJA can only be used to offset 80% of taxable income with an indefinite carryforward period for unused carryforwards (i.e., they should not expire).
On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (the “TCJA”) modified the rules regarding utilization of net operating loss and net operating losses generated subsequent to the TCJA can only be used to offset 80% of taxable income with an indefinite carryforward period for unused carryforwards (i.e., they should not expire).
The purchase price per share represents the “Minimum Price” of the Company’s Common Stock pursuant to Nasdaq Rule 5635(d) as of the date of execution of each respective securities purchase 93 Table of Contents agreement.
The purchase price per share represents the “Minimum Price” of the Company’s Common Stock pursuant to Nasdaq Rule 5635(d) as of the date of execution of each respective securities purchase agreement.
Inventory and supply chain management remain areas of focus as we balance the need to maintain supply chain flexibility, to help ensure competitive lead times with the risk of inventory obsolescence. During the year ended December 31, 2023, total inventory write-downs expenses amounted to $121,000. Production Lines Capitalization of Costs .
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 .
As a result of the sale of the Series C Preferred Stock, the aggregate gross proceeds to the Company from the Offering were approximately $22,422,000.
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.
Cost of revenues consist mainly of cost of device production, employees’ salaries and related overhead costs, depreciation of production line and related cost of equipment used in production, amortization of technologies, hosting costs, shipping and handling costs and inventory write-downs.
Cost of revenues consist mainly of cost of device production, employees’ salaries and related overhead costs, stock-based compensation, depreciation of production lines and related cost of equipment used in production, amortization of technologies, hosting costs, shipping and handling costs and inventory write-downs.
Revenue Recognition Revenue is recognized under the five-step methodology in accordance with Accounting Standards Codification (“ASC”) - 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.
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.
The factors described above resulted in net loss attributable to common stockholders of $63,511,000 and $63,836,000 for the year ended December 31, 2023 and 2022, respectively. Non-GAAP Financial Measures To supplement our consolidated financial statements presented in accordance with U.S.
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.
If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Business combination and asset acquisitions.
Since inception, we have financed our operations primarily through private placements and public offerings of our common stock and warrants to purchase shares of our common stock, receiving aggregate net proceeds totaling $244,392,000 and a credit facility of $25,564,000 as of December 31, 2023.
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 .
Revenues generated during the year ended December 31, 2023, were derived from the sale of services to our strategic partners, commercial customers and consumers located mainly in the United States. Cost of Revenues During the years ended December 31, 2023 and 2022, we recorded costs related to revenues in the amount of $14,368,000 and $18,001,000, respectively.
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.
Research and development expenses consist mainly of payroll expenses to employees involved in research and development activities, expenses related to: (i) our solutions including our Dario Smart Diabetes Management Solution, 90 Table of Contents DarioEngage platform, Dario Move solution and our digital behavioral health solution, (ii) labor contractors and engineering expenses, (iii) depreciation and maintenance fees related to equipment and software tools used in research and development, (iv) clinical trials performed in the United States to satisfy the FDA product approval requirements and (v) facilities expenses associated with and allocated to research and development activities.
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.
Commercial revenue - Strategic partnerships The Company has also entered into contracts with a preferred partner and a health plan provider in which the Company provides data license, development and implementation services.
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.
Purchasing obligations consists of outstanding purchase orders for materials and services from our vendors. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ (In U.S. dollars thousands) Contractual Obligations Total Less than 1 year 1-3 years ​ Over 4 years Operating Lease Obligations ​ $ 1,271 ​ $ 124 ​ $ 863 ​ $ 284 Purchasing Obligations ​ 4,511 ​ 4,511 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total contractual cash obligations ​ $ 5,782 ​ $ 4,635 ​ $ 863 ​ $ 284 ​ Contingencies We account for our contingent liabilities in accordance with ASC 450 “Contingencies”.
Purchasing obligations consists of outstanding purchase orders for materials and services from our vendors. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ (In U.S. dollars thousands) Contractual Obligations Total Less than 1 year 1-3 years ​ Over 4 years Operating Lease Obligations ​ $ 1,461 ​ $ 525 ​ $ 936 ​ $ — Purchasing Obligations ​ 3,423 ​ 3,423 ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total contractual cash obligations ​ $ 4,884 ​ $ 3,948 ​ $ 936 ​ $ — ​ Contingencies We account for our contingent liabilities in accordance with ASC 450 “Contingencies”.
In addition, it provides new segment disclosure requirements for entities with a single reportable segment. The guidance will be effective for the Company for annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. The Company is currently evaluating the impact on its financial statement disclosures.
In addition, it provides new segment disclosure requirements for entities with a single reportable segment. The guidance will be effective for us for annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted.
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. Importantly, we note the NGFM measures captioned “EBITDA” and “Non-GAAP Adjusted Loss” are not recognized terms under U.S.
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.
Net operating loss carryforwards As of December 31, 2023, we and WayForward had a U.S. federal net operating loss carryforward of approximately $44,870, of which $7,491 were generated from tax years 2011-2017 and can be carried forward and offset against taxable income, which expires during the years 2031 to 2037. 91 Table of Contents On December 22, 2017, the U.S.
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.
Operating lease obligations are for motor vehicle and real property leases which we use in our business.
We expect to be able to meet our obligations in the ordinary course. Operating lease obligations are for motor vehicle and real property leases which we use in our business.
As of December 31, 2023, The Company has incurred recurring losses and negative cash flows since inception and has an accumulated deficit of $349,361 as of December 31, 2023. For the year ended December 31, 2023, the Company used approximately $30,379 of cash in operations.
As of December 31, 2024, we had incurred recurring losses and negative cash flows since inception and has an accumulated deficit of $390,343 as of December 31, 2024. For the year ended December 31, 2024, we used approximately $38,562 of cash in operations.
During 2018 - 2023, we generated additional $37,379,000 of net operating losses carryforwards which are not subject to the annual limitation described above. Our Israeli subsidiary, Labstyle, accumulated net operating losses for Israeli income tax purposes as of December 31, 2023, in the amount of approximately $189,653,000.
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.
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.
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.
The Company expect to incur future net losses and our transition to profitability is dependent upon, among other things, the successful development and commercialization of the Company’s products and the achievement of a level of revenues adequate to support the cost structure.
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.
The increase was mainly due to an increase in our stock-based compensation, during the year ended December 31, 2023. Our general and administrative expenses, excluding stock-based compensation, acquisition costs and depreciation, for the year ended December 31, 2023, were $8, 663 ,000 compared to $9,803,000 for the year ended December 31, 2022, a decrease of $1, 140 ,000.
Our 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.
Cash used in operations decreased mainly due to the decrease in our receivables and inventories, and the decrease in operating and financing expenses. Net cash used in investing activities Net cash used for investing activities was $547,000 for the year ended December 31, 2023, compared to cash used in investing activities of $573,000 for the year ended December 31, 2022.
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.
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.
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.
Gross Profit Gross profit for the year ended December 31, 2023, amounted to $5,984,000 (29.4% of revenues) compared to $9,655,000 (34.9% of revenues) for the year ended December 31, 2022.
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 .
Contractual Obligations Set forth below is a summary of our current obligations as of December 31, 2023, to make future payments due by the period indicated below, excluding payables and accruals. We expect to be able to meet our obligations in the ordinary course.
During the year ended December 31, 2024, we raised net proceeds in an amount of approximately $38,531 through our February and December 2024 private placements. Contractual Obligations Set forth below is a summary of our current obligations as of December 31, 2024, to make future payments due by the period indicated below, excluding payables and accruals.
Our research and development expenses, excluding stock-based compensation and depreciation, for the year ended December 31, 2023, were $16,367,000 compared to $15,995,000 for the year ended December 31, 2022, an increase of $372,000. This increase is mainly as a result of an increase in salaries and software development expenses.
Our 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.
Currently, we are not a party to any ligation that we believe could have a material adverse effect on our business, financial position, results of operations or cash flows. 96 Table of Contents Recently Issued and Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).
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.
Our failure to obtain such funding when needed could create a negative impact on our stock price or could potentially lead to the failure of our company.
Our failure to obtain such funding when needed could create a negative impact on our stock price or could potentially lead to the failure of our company. This would particularly be the case if we are unable to commercially distribute our products and services in the jurisdictions and in the timeframes we expect.
The Company is currently evaluating the impact on its financial statement disclosures ​ ​ Item 7A. Quantitative and Qualitative Disclosure About Market Risk Not applicable. ​ 97 Table of Contents
We are currently evaluating the effect of adopting the ASU on our disclosures. ​ Item 7A. Quantitative and Qualitative Disclosure About Market Risk Not applicable. ​
GAAP measure to NGFM, as discussed above, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ (in thousands) ​ ​ 2023 2022 $ Change Net Loss Reconciliation ​ ​ ​ ​ Net loss - as reported ​ $ (59,427) ​ $ (62,193) ​ $ 2,766 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjustments ​ ​ ​ ​ Depreciation expense ​ 473 ​ 356 ​ 117 Amortization of acquired technology and brand ​ ​ 4,512 ​ ​ 4,481 ​ ​ 31 Other financial expenses, net ​ ​ 3,174 ​ ​ 5,379 ​ ​ (2,205) Income tax ​ 64 ​ 4 ​ 60 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EBITDA ​ (51,204) ​ (51,973) ​ 769 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquisition costs ​ ​ 128 ​ ​ — ​ ​ 128 Earn-out remeasurement ​ ​ — ​ (497) ​ 497 Stock-based compensation expenses ​ 19,701 ​ 16,975 ​ 2,726 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-GAAP adjusted loss ​ $ (31,375) ​ $ (35,495) ​ $ 4,120 ​ Liquidity and Capital Resources The Company has incurred net losses since its inception.
GAAP 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.
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.
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.
Our sales and marketing expenses, excluding stock-based compensation, depreciation and amortization, for the year ended December 31, 2023, were $17,146,000 compared to $23,880,000 for the year ended December 31, 2022, a decrease of $6,734,000. This decrease was due to a decrease in our digital marketing, and payroll related expenses.
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.
The closing of the Series C Preferred Stock, Series C-1 Preferred Stock and Series C-2 Preferred Stock occurred on or before February 21, 2024. ​ Readers are advised that available resources may be consumed more rapidly than currently anticipated, resulting in the need for additional funding sooner than expected.
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.
The decrease in gross profit as a percentage of revenue for the year ended December 31, 2023, compared to the year ended December 31, 2022, is due to the decrease in revenues derived from sales through our strategic partnerships.
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.
Cash used in investing activities increased mainly due to purchase of property and equipment and investment in short-term bank deposits in 2023 compared to 2022. Net cash provided by financing activities Net cash provided by financing activities was $18,253,000 for the year ended December 31, 2023, compared to $61,940,000 for the year ended December 31, 2022.
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.
Research and Development Expenses Our research and development expenses increased by $599,000 to $20,248,000 for the year ended December 31, 2023, compared to $19,649, 000 for the year ended December 31, 2022. This increase was mainly due to the increase in our payroll expenses during the year ended December 31, 2023.
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.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which requires disaggregated information about the effective tax rate reconciliation as well as information on income taxes paid. The guidance will be effective for the Company for annual periods beginning January 1, 2025, with early adoption permitted.
For more information on the updated segment disclosures, refer to Note 18 of our consolidated financial statements. ​ Recently issued accounting pronouncements, not yet adopted: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which requires disaggregated information about the effective tax rate reconciliation as well as information on income taxes paid.
Results of Operations Comparison of the Year Ended December 31, 2023 to Year Ended December 31, 2022 Revenues Revenues for the year ended December 31, 2023, amounted to $20,352,000 compared to $27,656,000 during the year ended December 31, 2022.
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.
This would particularly be the case if we are unable to commercially distribute our products and services in the jurisdictions and in the timeframes we expect. ​ 95 Table of Contents Cash Flows The following tables sets forth selected cash flow information for the periods indicated: ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2023 ​ 2022 ​ $ ​ $ Cash used in operating activities: ​ (30,379,000) (47,845,000) Cash used in investing activities: ​ (547,000) (573,000) Cash provided by financing activities: ​ 18,253,000 61,940,000 ​ ​ (12,673,000) ​ 13,522,000 ​ Net cash used in operating activities Net cash used in operating activities was $30,379,000 for the year ended December 31, 2023, compared to $47,845,000 used in operations for the same period in 2022.
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.
Gross profit for the year ended December 31, 2023, excluding amortization of acquired technology were $10,370,000 (51.0% of revenues) compared to $14,012,000 (50.7% of revenues) during the year ended December 31, 2022.
Gross profit 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.
There are no assurances, however, that the Company 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, 2023, we had approximately $36,797,000 in cash and cash equivalents compared to $49,357,000 at December 31, 2022.
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.
We have experienced cumulative losses of $349, 361 ,000 from inception (August 11, 2011) through December 31, 2023 and have a stockholders’ equity of $96,389,000 at December 31, 2023.
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 .
Sales and Marketing Our sales and marketing expenses decreased by $6,538,000 to $23,785,000 for the year ended December 31, 2023, compared to $30,323,000 for the year ended December 31, 2022. This decrease was mainly due to the decreases in our digital marketing and payroll related expenses during the year ended December 31, 2023.
Sales and Marketing Our sales and marketing expenses increased by $ 2 ,5 65 to $ 26 , 350 for the year ended December 31, 2024, compared to $23,785 for the year ended December 31, 2023.
Sales and marketing expenses consist mainly of payroll expenses, online marketing campaigns of our service offering, trade show expenses, customer support expenses and marketing consultants, marketing expenses and subcontractors. General and Administrative Expenses Our general and administrative expenses increased by $1,647,000 to $18,140,000 for the year ended December 31, 2023, compared to $16,493,000 for the year ended December 31, 2022.
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.
This decrease was due to a decrease in, insurance, consulting services, and investor relations expenses. Our general and administrative expenses consist mainly of payroll and stock-based compensation expenses for management, employees, directors and consultants, legal and accounting fees, patent registration, expenses related to investor relations, as well as our office rent and related expenses.
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.
Removed
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.
Added
We apply the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
Removed
The decrease in revenues for the year ended December 31, 2023, compared to the year ended December 31, 2022, is due to a decrease in revenues from sales to consumers and our strategic partnerships .
Added
When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Removed
The decrease in cost of revenues was due to the decrease in revenues. Cost of revenues excluding amortization of acquired technology during the year ended December 31, 2023 and 2022, was $10,370,000 and $1 4 , 012 ,000, respectively.
Added
We account for a transaction as an asset acquisition when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, or otherwise does not meet the definition of a business.
Removed
Finance expenses, net Our finance expenses, net, decreased by $2,205,000 to $3,174,000 for the year ended December 31, 2023, compared to $5,379,000 financing expenses for the year ended December 31, 2022. The changes in our financial expenses were mainly due to the remeasurement of our long term loan and interest income received.
Added
The increase in revenues for the year ended December 31, 2024, compared to the year ended December 31, 2023, resulted from an increase in our revenues from our commercial channel. The revenues also include the consolidation of Twill’s revenues, as a result of its acquisition during the first quarter of 2024.
Removed
Financial expenses, net mainly include bank charges, interest expenses, interest income, and foreign currency translation differences . Income tax Income tax expenses were $64,000 for the year ended December 31, 2023, as compared to $4,000 for the year ended December 31, 2022. Net loss Net loss for the year ended December 31, 2023 was $59,427,000.
Added
The pro forma revenues for the year ended December 31, 2024, if the closing of the acquisition of Twill would have taken place on the first day of the year would have amounted to $29,003.
Removed
Net loss for the year ended December 31, 2022, was $62,193,000. The decrease from 2022 was mainly due to the decrease in our operating and financing expenses.
Added
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.

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