DarioHealth Reports First Quarter 2018 Results

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Record Q1 2018 Revenue of $1.76 Million; year over year growth of 74%

May 15, 2018 8:00 AM EDT

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NEW YORK and CAESAREA, Israel, May 15, 2018 /PRNewswire/ -- DarioHealth Corp. (NASDAQ: DRIO), a leading global digital health company with mobile health and big data solutions, today reported financial and operational results for the first quarter ended on March 31, 2018.

First Quarter Highlights

Record revenue of $1.76 million increased 74% compared to the first quarter of 2017

Sequential quarterly revenue growth of 11.3% over the fourth quarter of 2017
Thirteenth consecutive quarter of revenue growth

Gross profit of $552,000, an increase of 420% compared to the first quarter of 2017
Operating loss of $2,875,000, a decrease of 32% compared to the first quarter of 2017
Net loss of $2,919,000, a decrease of 46% compared to the first quarter of 2017

Net loss decreased by 11% from the fourth quarter of 2017

Erez Raphael, Chairman and CEO of DarioHealth, commented, "The 74% revenue growth rate we achieved in the first quarter over the prior year's period is in line with the annual 60%-80% revenue growth rate we expect for the full 2018 year. We are effectively executing on all fronts. As our revenues grow, gross profits are increasing at a higher rate, resulting in narrowing operating and net losses.

"Having completed a $6.6 million raise during the first quarter, we are investing in our commercialization capabilities, including boosting our business-to-business Dario Engage platform, especially in the U.S. with an extended commercialization team, and also further building upon the success we are achieving in the direct-to-consumer market. A substantial global market opportunity is present and we believe DarioHealth has the technology, products, market access and team to best serve the stakeholders in this market."

First Quarter 2018 Results Summary Revenue for the first quarter ended March 31, 2018 was $1,756,000, a 74% increase from $1,007,000 in first quarter ended March 31, 2017, and an 11.3% increase sequentially from the fourth quarter of 2017.

Revenue for the first quarter of 2018 included direct-to-consumer sales in the United States and Australia, as well as initial sales in Germany, and product sales to distributors in the United Kingdom.

Gross profit increased by $446,000, a 420% increase to a profit of $552,000 in the first quarter of 2018, as compared to a gross profit of $106,000 in the first quarter of 2017.

Operating loss for the first quarter ended March 31, 2018 decreased by $1.3 million to $2.88 million, as compared to a $4.2 million operating loss in the first quarter ended March 31, 2017. This decrease is mainly due to the improvement in our gross profit and a decrease in our operating expenses due a reduction in share-based compensation.

Net loss attributable to holders of common stock decreased by $2.5 million to $2.9 million in the first quarter of 2018, as compared to $5.4 million in the first quarter of 2017, and decreased by $346,000 as compared to $3.26 million in the fourth quarter of 2017.

As of March 31, 2018, cash and cash equivalents totaled $7 million following the raise of $6.6 million during the quarter in a private placement.

Conference Call Details:Date: Tuesday, May 15, 2018 Time: 9:00am EDT Dial-in Number: 1-877-407-8035 International Dial-in Number: 1-201-689-8035 Webcast: http://www.investorcalendar.com/event/27776

About DarioHealth Corp. DarioHealth Corp. (NASDAQ: DRIO) is a leading global digital health company serving its users with dynamic mobile health solutions. In today's day and age, knowledge of health and treatment is being democratized, and we believe people deserve to know everything about their own health and have the best tools to manage their condition. DarioHealth employs a revolutionary approach whereby harnessing big data, we have developed a novel method for chronic disease data management, empowering people to analyze and personalize self-diabetes management in a totally new way without having the disease slow them down. DarioHealth has a commercial office in New York with an R&D center in Caesarea, Israel. For more information, visit http://mydario.investorroom.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 provides revenue forecasts, describes growth potential for 2018, and describes market opportunity. 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.

DARIOHEALTH CORP.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

	March 31,	December 31,
	2018	2017
	Unaudited
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$ 7,041	$ 3,718
Short-term bank deposits	188	258
Trade Receivables	200	282
Inventories	912	1,184
Other accounts receivable and prepaid expenses	566	604

Total current assets	8,907	6,046

LEASE DEPOSITS	45	42

PROPERTY AND EQUIPMENT, NET	828	869

Total assets	$ 9,780	$ 6,957

DARIOHEALTH CORP.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except stock and stock data)

	March 31,	December 31,
	2018	2017
	Unaudited

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade payables	$ 1,112	$ 1,852
Other accounts payable and accrued expenses	1,297	1,163

Total current liabilities	2,409	3,015

LIABILITY RELATED TO WARRANTS	*) -	1

STOCKHOLDERS' EQUITY
Common Stock of $0.0001 par value - Authorized: 160,000,000 shares at March 31, 2018 (unaudited) and December 31, 2017; Issued and Outstanding: 16,480,164 and 14,074,238 shares at March 31, 2018 (unaudited) and December 31, 2017, respectively	7	7
Preferred Stock of $0.0001 par value - Authorized: 5,000,000 shares at March 31, 2018 (unaudited) and December 31, 2017; Issued and Outstanding: 1,234,080 and None shares at March 31, 2018 (unaudited) and December 31, 2017, respectively	*) -	-
Additional paid-in capital	81,241	74,892
Accumulated deficit	(73,877)	(70,958)

Total stockholders' equity	7,371	3,941

Total liabilities and stockholders' equity	$ 9,780	$ 6,957


*) Represents an amount lower than $1.

DARIOHEALTH CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
U.S. dollars in thousands (except stock and stock data)

	Three months ended
	March 31
	2018	2017
	Unaudited

Revenues	$ 1,756	$ 1,007
Cost of revenues	1,204	901

Gross profit	552	106

Operating expenses:
Research and development	$ 742	$ 469
Sales and marketing	1,824	1,825
General and administrative	861	2,017

Total operating expenses	3,427	4,311

Operating loss	(2,875)	(4,205)

Financial expenses, net:
Revaluation of warrants	(1)	1,195
Other financial expense, net	45	13

Total financial expenses, net	44	1,208

Net loss	$ (2,919)	$ (5,413)

Net loss attributable to holders of Common Stock	$ (2,919)	$ (5,413)

Net loss per share

Basic and diluted loss per share	$ (0.20)	$ (0.75)
Weighted average number of Common Stock used in computing basic and diluted net loss per share	14,943,032	7,195,801

DARIOHEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

	Three months ended
	March 31,
	2018	2017
	Unaudited

Cash flows from operating activities:
Net loss	$ (2,919)	$ (5,413)
Adjustments required to reconcile net loss to net cash used in operating activities:
Stock-based compensation and Common Stock to service providers	230	1,585
Depreciation	53	43
Decrease (increase) is trade receivables	82	(256)
Decrease (increase) in accounts receivables and prepaid expenses	38	(210)
Decrease in inventories	272	39
Decrease in trade payables	(740)	(328)
Increase in other accounts payable and accrued expenses	219	262
Change in fair value of warrants to purchase shares of Common Stock	(1)	1,195

Net cash used in operating activities	(2,766)	(3,083)

Cash flows from investing activities:
Maturities of short-term bank deposit	70	-
Investment in lease deposits	(3)	(9)
Purchase of property and equipment	(12)	-

Net cash provided by (used in) investing activities	55	(9)

Cash flows from financing activities:
Proceeds from issuance of Common Stock and warrants, net of issuance cost	6,034	4,816

Net cash provided by financing activities	6,034	4,816

Increase in cash and cash equivalents	3,323	1,724
Cash and cash equivalents at the beginning of the period	3,718	1,093

Cash and cash equivalents at the end of the period	$ 7,041	$ 2,817

Non-cash investing and financing activities:

Reclassification of warrants from liability to Common Stock	$ -	$ 8,655

Payment for directors and Consultants under Shares for Salary Program	$ 85	$ 183

DarioHealth Corporate Contact: Shmuel Herschberg, Marketing Director, [email protected], 1-914-775-5548

DarioHealth Public Relations Contact: Terese Kelly, Rosica PR, [email protected], 1-201-843-5600

DarioHealth Investor Relations Contact: Westwicke Partners, [email protected], 1-443-213-0500

View original content:http://www.prnewswire.com/news-releases/dariohealth-reports-first-quarter-2018-results-300648419.html

SOURCE DarioHealth Corp.

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