NEW YORK and CAESAREA, Israel, Oct.
28, 2019 /PRNewswire/ -- Global digital
therapeutics innovator DarioHealth Corp. (Nasdaq: DRIO), today
reported financial and operational results for the third quarter
ended September 30, 2019.
- Q3 2019 Revenues of $1.87
million, a 13% sequential increase over Q2 2019, and a 0.6%
decrease compared to Q3 2018
- Q3 2019 Gross Profit of $873,000, representing 46.7% of revenues, a
sequential increase of 168% over Q2 2019, and an 86% increase
over Q3 2018
- Operating Loss in Q3 2019 decreased by $1.25 million to $2.8
million, a sequential decline of 48% compared to Q2 2019 and
a 31% decrease compared to Q3 2018
- Dario demonstrated strategic interest in its platform with
potential revenue generating possibly beginning in the first half
of 2020, Dance Biopharma partnership and
exciting pipeline of potential additional opportunities
- Results reflect and support Dario's strategic push into
business-to-business (B2B), as sequential revenue growth and client
wins were generated in combination with a lower expense
structure
CEO, Erez Raphael, stated, "In
the third quarter, we believe that we produced tangible evidence
that broadening our focus from the direct-to-consumer (D2C) channel
alone to include the B2B channel is working well. We grew Dario's
top-line while significantly improving gross margins and reducing
losses. This quarter's performance also highlights the potential of
our high margin SaaS oriented membership program. As previously
mentioned, the resulting benefits of this B2B channel focus are
measurable in terms of larger patient adoption, more certain
revenue streams and lower customer acquisition costs.
In July 2019, Dario successfully
launched a U.S. Food and Drug Administration cleared hypertension
extension of its chronic disease management platform. We're excited
about the versatility of our platform and that we can now
potentially help 75 million patients in the U.S. who suffer from
this condition. We've received initial positive feedback from
existing users about their ability to manage both diabetes and
hypertension on our digital platform and we are excited to offer
our technology to address an additional potential large market
opportunity.
In September 2019, Dario announced
its first strategic partnership with a private company, Dance
Biopharm Holdings, Inc. Dario's platform will be integrated with
Dance's smart inhaler to provide patients with automated, real-time
treatment data through our advanced mobile application. This
partnership may generate revenues in 2020 and beyond. We believe
this partnership will be the first of many as we seek to combine
our technology with other therapeutic, device and service
offerings. We believe this highlights the compatibility and
versatility of Dario's digital chronic condition management
platform to integrate with other devices to assist in managing
other
diseases.
Finally, we continued to win new clients and increase the
pipeline of payers, employers, and providers who want an integrated
solution that provides value and accountability driven healthcare,
enabled by Dario's user-centric and evidence-based platform.
Management's continued acceptance of a portion of its
compensation in shares is another ongoing contributor to a reduced
cash burn and a reflection of our management's belief in Dario's
future.
As we assess the global healthcare market and Dario's place in
it, we are confident that we have built a platform technology
which will deliver better care at a lower cost for patients with
chronic diseases.
Financial Results for the Three Months Ended September 30, 2019:
Revenue for the third quarter ended September 30, 2019 was $1.87 million, a 13% sequential increase over Q2
2019 and a 0.6% decrease from $1.88
million in the third quarter ended September 30, 2018.
Gross profit of $873,000,
representing 46.7% of revenues, was recorded for the three months
ended September 30, 2019, an increase
of 86%, or $405,000, compared to
gross profit of $468,000 for the
three months ended September 30,
2018.
Operating loss for the three months ended September 30, 2019 decreased by $1.25 million to $2.8
million, as compared to a $4.5
million operating loss for the three months ended
September 30, 2018.
Net loss attributable to holders of common stock decreased by
$1.26 million to $2.8 million for the three months ended
September 30, 2019, as compared to
$4.1 million for the three months
ended September 30, 2018.
Our new B2B focus has allowed us to be more efficient with our
use of cash, extending our runway of existing balance sheet
resources.
As of September 30, 2019, cash and
cash equivalents totaled approximately $4.6
million.
Non-GAAP billings for the three months ended September 30, 2019 were $1.78 million, a 20% decrease from $2.2 million in the three months ended
September 30, 2019. A reconciliation
of GAAP to non-GAAP measures has been provided in the financial
statement tables included in this press release. An explanation of
these measures is also included below under the heading "Non-GAAP
Financial Measures."
Financial Results for the Nine Months Ended September 30, 2019:
Revenue for the nine months ended September 30, 2019 was $5.76 million, a 1.2% increase from $5.69 million for the nine months ended
September 30, 2018.
Gross profit of $1.76 million was
recorded for the nine months ended September
30, 2019, an increase of 14%, or $215,000, compared to gross profit of
$1.54 million for the nine months
ended September 30, 2018.
Operating loss for the nine months ended September 30, 2019 increased by $762,000 to $13.5
million, compared to a $12.8
million operating loss for the nine months ended
September 30, 2018.
Net loss attributable to holders of common stock increased by
$743,000 to $13.56 million for the nine months ended
September 30, 2019, as compared to
$12.82 million for the nine months
ended September 30, 2018.
Non-GAAP billings for the nine months ended September 30, 2019 were $6.34 million, a 4.2% increase from $6.08 million in the nine months ended
September 30, 2019. A reconciliation
of GAAP to non-GAAP measures has been provided in the financial
statement tables included in this press release. An explanation of
these measures is also included below under the heading "Non-GAAP
Financial Measures."
A Company investor presentation is available at:
http://mydario.investorroom.com/
About DarioHealth Corp.
DarioHealth Corp. (NASDAQ: DRIO) is a leading, global digital
therapeutics company revolutionizing the way people with chronic
conditions manage their health. By delivering evidence-based
interventions that are driven by data, high-quality software and
coaching, we empower individuals to make healthy adjustments to
their daily lifestyle choices to improve their overall health. Our
cross-functional team operates at the intersection of life
sciences, behavioral science and software technology to deliver
highly engaging therapeutic interventions. Dario is one of the
highest-rated diabetes solutions in the market, and its
user-centric MyDario™ mobile app is loved by tens of thousands of
consumers around the globe. DarioHealth is rapidly moving into new
chronic conditions and geographic markets, using a
performance-based approach to improve the health of users managing
chronic disease. To learn more about DarioHealth and its digital
health solutions, please go to: http://dariohealth.com/
Cautionary Note Regarding Forward-Looking Statements
This news release and the statements of representatives and
partners of DarioHealth Corp. (the "Company") related thereto
contain or may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Statements that are not statements of historical fact may be deemed
to be forward-looking statements. Without limiting the generality
of the foregoing, words such as "plan," "project," "potential,"
"seek," "may," "will," "expect," "believe," "anticipate," "intend,"
"could," "estimate" or "continue" are intended to identify
forward-looking statements. For example, the Company is using
forward-looking statements in this press release when the Company
describes its belief that the third quarter produced tangible
evidence that broadening its focus from the D2C channel to the B2B
channel is working well, that the Company is excited to offer its
hypertension extension product to address a potential large market
opportunity, that its partnership with Dance Biopharma may generate
revenues in the first half of 2020 and beyond, its belief that such
partnership will be the first of many to combine the Company's
technology with other therapeutic, device and service offerings and
that such partnership highlights the compatibility and versatility
of Dario's platform with other devices to assist in managing other
diseases and the belief that management is confident that it has
built a platform technology which will deliver better care at a
lower cost for patients with chronic diseases. Readers are
cautioned that certain important factors may affect the Company's
actual results and could cause such results to differ materially
from any forward-looking statements that may be made in this news
release. Factors that may affect the Company's results include, but
are not limited to, regulatory approvals, product demand, market
acceptance, impact of competitive products and prices, product
development, commercialization or technological difficulties, the
success or failure of negotiations and trade, legal, social and
economic risks, and the risks associated with the adequacy of
existing cash resources. Additional factors that could cause or
contribute to differences between the Company's actual results and
forward-looking statements include, but are not limited to, those
risks discussed in the Company's filings with the U.S. Securities
and Exchange Commission. Readers are cautioned that actual results
(including, without limitation, the timing for and results of the
Company's commercial and regulatory plans for Dario™ as described
herein) may differ significantly from those set forth in the
forward-looking statements. The Company undertakes no obligation to
publicly update any forward-looking statements, whether as a result
of new information, future events or otherwise, except as required
by applicable law.
Non-GAAP Financial Measures
We have provided in this release financial information that has
not been prepared in accordance with Generally Accepted Accounting
Principles (GAAP). These non-GAAP financial measures are not based
on any standardized methodology prescribed by GAAP and are not
necessarily comparable to similar measures presented by other
companies. We use these non-GAAP financial measures internally in
analyzing our financial results and believe they are useful to
investors, as a supplement to GAAP measures, in evaluating our
ongoing operational performance. We believe that the use of these
non-GAAP financial measures provides an additional tool for
investors to use in evaluating ongoing operating results and trends
and in comparing our financial results with peer companies, many of
which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. Investors are encouraged to
review the reconciliation of these non-GAAP financial measures to
their most directly comparable GAAP financial measures provided in
the financial statement tables below.
Billings (non-GAAP). We define billings as revenue
recognized in accordance with GAAP plus the change in deferred
revenue from the beginning to the end of the period and adjustment
to the deferred revenue balance due to adoption of the new revenue
recognition standard less any deferred revenue balances acquired
from business combination(s) during the period. We consider
billings to be a useful metric for management and investors because
billings drive future revenue, which is an important indicator of
the health and viability of our business. There are a number of
limitations related to the use of billings instead of GAAP revenue.
First, billings include amounts that have not yet been recognized
as revenue and are impacted by the term of security and support
agreements. Second, we may calculate billings in a manner that is
different from peer companies that report similar financial
measures. Management accounts for these limitations by providing
specific information regarding GAAP revenue and evaluating billings
together with GAAP revenue.
DARIOHEALTH
CORP.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,585
|
|
|
$
|
10,997
|
|
Restricted bank
deposits
|
|
|
189
|
|
|
|
180
|
|
Trade
Receivables
|
|
|
519
|
|
|
|
168
|
|
Inventories
|
|
|
1,473
|
|
|
|
1,377
|
|
Other accounts
receivable and prepaid expenses
|
|
|
392
|
|
|
|
591
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
7,158
|
|
|
|
13,313
|
|
|
|
|
|
|
|
|
|
|
LEASE
DEPOSITS
|
|
|
52
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
OPERATING LEASE RIGHT
OF USE ASSET
|
|
|
719
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
|
|
674
|
|
|
|
733
|
|
Total
assets
|
|
$
|
8,603
|
|
|
$
|
14,089
|
|
DARIOHEALTH
CORP.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except stock and stock
data)
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
$
|
1,406
|
|
|
$
|
2,574
|
|
Deferred
revenues
|
|
|
1,311
|
|
|
|
736
|
|
Operating lease
liability
|
|
|
287
|
|
|
|
-
|
|
Other accounts
payable and accrued expenses
|
|
|
1,215
|
|
|
|
1,854
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
4,219
|
|
|
|
5,164
|
|
|
|
|
|
|
|
|
|
|
OPERATING LEASE
LIABILITY
|
|
|
477
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Common Stock of
$0.0001 par value –
Authorized: 160,000,000 shares at September 30,
2019 (unaudited) and
December 31, 2018; Issued and Outstanding: 43,683,840 and
36,607,755
shares at September 30, 2019 (unaudited) and December 31, 2018,
respectively
|
|
|
8
|
|
|
|
8
|
|
Preferred Stock of
$0.0001 par value -
Authorized: 5,000,000 shares at September 30, 2019 (unaudited)
and
December 31, 2018; Issued and Outstanding: None at September 30,
2019
(unaudited) and December 31, 2018
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
106,716
|
|
|
|
98,171
|
|
Accumulated
deficit
|
|
|
(102,817)
|
|
|
|
(89,254)
|
|
Total stockholders' equity
|
|
|
3,907
|
|
|
|
8,925
|
|
Total liabilities and stockholders'
equity
|
|
$
|
8,603
|
|
|
$
|
14,089
|
|
DARIOHEALTH
CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
U.S. dollars in thousands (except stock and stock
data)
|
|
|
|
Three months
ended
September 30
|
|
|
Nine months
ended
September 30
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
Revenues
|
|
$
|
1,868
|
|
|
$
|
1,879
|
|
|
$
|
5,761
|
|
|
$
|
5,694
|
|
Cost of
revenues
|
|
|
995
|
|
|
|
1,411
|
|
|
|
4,004
|
|
|
|
4,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
873
|
|
|
|
468
|
|
|
|
1,757
|
|
|
|
1,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
$
|
859
|
|
|
$
|
997
|
|
|
$
|
2,852
|
|
|
$
|
2,749
|
|
Sales and
marketing
|
|
|
1,865
|
|
|
|
2,816
|
|
|
|
8,804
|
|
|
|
7,049
|
|
General and
administrative
|
|
|
948
|
|
|
|
709
|
|
|
|
3,625
|
|
|
|
4,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
|
3,672
|
|
|
|
4,522
|
|
|
|
15,281
|
|
|
|
14,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(2,799)
|
|
|
|
(4,054)
|
|
|
|
(13,524)
|
|
|
|
(12,762)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation of
warrants
|
|
|
-
|
|
|
|
*)-
|
|
|
|
-
|
|
|
|
1
|
|
Other financial
expense, net
|
|
|
(6)
|
|
|
|
(9)
|
|
|
|
(39)
|
|
|
|
(59)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial
expenses, net
|
|
|
(6)
|
|
|
|
(9)
|
|
|
|
(39)
|
|
|
|
(58)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,805)
|
|
|
$
|
(4,063)
|
|
|
$
|
(13,563)
|
|
|
$
|
(12,820)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deemed dividend
related to warrant exchange
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
493
|
|
Net loss attributable
to holders of Common Stock
|
|
$
|
(2,805)
|
|
|
$
|
(4,063)
|
|
|
$
|
(13,563)
|
|
|
$
|
(13,313)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share
|
|
$
|
(0.06)
|
|
|
$
|
(0.17)
|
|
|
$
|
(0.28)
|
|
|
$
|
(0.67)
|
|
Weighted
average number of Common Stock used in computing basic and diluted
net loss per share
|
|
|
50,730,253
|
|
|
|
23,533,328
|
|
|
|
49,101,850
|
|
|
|
19,733,291
|
|
DARIOHEALTH
CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
|
|
|
Nine months
ended
September 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(13,563)
|
|
|
$
|
(12,820)
|
|
Adjustments required
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Stock-based
compensation and Common Stock to service providers
|
|
|
1,928
|
|
|
|
3,284
|
|
Depreciation
|
|
|
138
|
|
|
|
160
|
|
Amortization of
operating lease right of use
|
|
|
160
|
|
|
|
-
|
|
Increase is trade
receivables
|
|
|
(351)
|
|
|
|
(92)
|
|
Decrease in accounts
receivables and prepaid expenses
|
|
|
199
|
|
|
|
81
|
|
Decrease (increase)
in inventories
|
|
|
(96)
|
|
|
|
164
|
|
Increase (decrease)
in trade payables
|
|
|
(1,168)
|
|
|
|
351
|
|
Increase (decrease)
in other accounts payable and accrued expenses
|
|
|
(580)
|
|
|
|
457
|
|
Increase in deferred
revenues
|
|
|
575
|
|
|
|
385
|
|
Change in operating
lease liability
|
|
|
(115)
|
|
|
|
-
|
|
Change in fair value
of warrants to purchase shares of Common Stock
|
|
|
-
|
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
|
(12,873)
|
|
|
|
(8,031)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Maturities
(investment) of restricted bank deposit
|
|
|
(9)
|
|
|
|
74
|
|
Investment in lease
deposits
|
|
|
(9)
|
|
|
|
(5)
|
|
Purchase of property
and equipment
|
|
|
(79)
|
|
|
|
(49)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) investing activities
|
|
|
(97)
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of Common Stock, Preferred Stock and warrants, net of
issuance cost
|
|
|
6,558
|
|
|
|
15,720
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
|
6,558
|
|
|
|
15,720
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
(6,412)
|
|
|
|
7,709
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
10,997
|
|
|
|
3,718
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
4,585
|
|
|
$
|
11,427
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment for directors
and consultants under Shares for Salary Program
|
|
$
|
59
|
|
|
$
|
286
|
|
DARIOHEALTH
CORP.
Reconciliation of Revenue to Billings (Non-GAAP)
U.S. dollars in thousands
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
GAAP
Revenues
|
|
$1,868
|
|
$1,879
|
|
$5,761
|
|
$5,694
|
Add:
|
|
|
|
|
|
|
|
|
Change in Deferred
Revenues
|
|
($87)
|
|
$335
|
|
$575
|
|
$385
|
|
|
|
|
|
|
|
|
|
Billings
(Non-GAAP)
|
|
$1,781
|
|
$2,214
|
|
$6,336
|
|
$6,079
|
|
|
|
|
|
|
|
|
|
Contacts:
DarioHealth Corporate Contact: Claudia Levi, Content &
Communications Manager, claudia@mydario.com,
+1-347-767-4220
View original
content:http://www.prnewswire.com/news-releases/dariohealth-reports-results-for-third-quarter-2019-300946140.html
SOURCE DarioHealth Corp.