NEW YORK and CAESAREA, Israel, Aug.
13, 2019 /PRNewswire/ --
- Q2 2019 Revenue of $1.65
million, a 20% decline from Q2 2018
- Record 1H 2019 Revenue of $3.89
million, a 2% increase over 1H 2018
- Expense shift from D2C to B2B, resulting in a short-term
decline in Revenue and an expectation of significant reductions to
Net loss in 2H 2019
- Significantly advanced key 2019 initiative to expand growth
strategy solely from the direct-to-consumer (D2C) channel to
include the more scalable, lucrative business-to-business (B2B)
channel
- Launched FDA cleared Blood Pressure Monitor and Hypertension
management tool; additional functionality expands Dario's product
offering, while increasing potential average revenue per user
(ARPU) and improving patient care
- Presented strong, supportive data at the American Diabetes
Association (ADA) Conference in June, highlighting improved in
range readings for blood glucose and lowered A1C levels for people
with Type 2 Diabetes
- Closed a $7.2 million financing
with U.S. institutional investors, providing capital for the
Company's strategic growth initiatives
Global digital therapeutics innovator DarioHealth Corp. (Nasdaq:
DRIO), today reported financial and operational results for the
second quarter ended June 30,
2019.
CEO, Erez Raphael, stated,
"During this quarter, we strengthened our platform technology by
expanding its application to hypertensive patients, presenting new
significant data for people with diabetes that supports meaningful
clinical outcomes and increases the basic functionality through its
use on the Android phone in Europe. All of these initiatives created a
better technology for a broader patient base who benefit from
active management of their chronic diseases.
During this quarter, we witnessed concrete evidence from our
pipeline of payers, employers, and providers of their growing
demand for value and accountability driven healthcare, enabled by
the user-centric and evidence-based solutions that Dario
provides.
As our focus shifts to take advantage of these market tailwinds
and our business-to-business (B2B) pipeline activity accelerates,
we will continue to support our direct-to-consumer (D2C) sales and
marketing initiatives but with budgets weighted towards broader B2B
business development. The resulting benefits will be measurable in
terms of larger patient adoption, more certain revenue streams and
lower customer acquisition costs.
While this evolution of our business model may result in reduced
near term revenues such as in this quarter, we are confident that
in the long term our product and this strategy will maximize its
market adoption for patient-centric management of chronic diseases.
We believe that the maturity of our B2B pipeline will soon allow us
to resume the type of double-digit quarterly growth experienced in
the first quarter of this year.
This balancing of resources from D2C to B2B has the additional
benefit of a reduction in our burn-rate. As a result, we expect
significant reductions in our net quarterly loss in the second half
of 2019.
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 more confident than ever that we have built a platform
technology which will deliver better care at a lower cost for
patients with chronic diseases.
We are excited to share more developments over the remainder of
the year as we continue executing our strategic plan, creating
value for all stakeholders.
Financial Results for the Three Months Ended June 30, 2019:
Revenue for the second quarter ended June
30, 2019 was $1.65 million, a
20% decrease from $2.06 million in
the second quarter ended June 30,
2018.
Revenue for the second quarter of 2019 included D2C sales in the
U.S. and Australia, and product
sales to distributors in Canada
and the United Kingdom. We
recorded an increase of $102,000 as
deferred revenues from revenues generated from our membership
offering to our customers in the U.S.
Gross profit of $326,000 was
recorded for the three months ended June 30,
2019, a decrease of 38% or $196,000 compared to gross profit of $522,000 for the three months ended June 30, 2018. This decrease was attributed to
lower sales and a one-time expense write-off of our old cartridge
production mold for $82,000.
Operating loss for the second quarter of 2019 decreased by
$431,000 to $5.36 million, as compared to a $5.8 million operating loss in the second quarter
ended June 30, 2018.
Net loss attributable to holders of common stock decreased by
$456,000 to $5.4 million in the second quarter of 2019, as
compared to $5.8 million in the
second quarter of 2018.
As of June 30, 2018, cash and cash
equivalents totaled approximately $8
million.
Non-GAAP billings for the three months ended June 30, 2019 were $1.75
million, a 17% decrease from $2.1
million in the three months ended June 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 Six Months Ended June 30, 2019:
Revenue for the six months ended June 30,
2019 was $3.9 million, a 2%
increase from $3.8 million for the
six months ended June 30, 2018. We
recorded an additional $662,000 as
deferred revenues from revenues generated from our membership
offering to our customers in the U.S.
Gross profit of $884,000 was
recorded for the six months ended June 30,
2019, a decrease of 18% or $190,000 compared to gross profit of $1,074,000 for the six months ended June 30, 2018. This decrease was affected by a
one-time expense write-off of our old cartridge production mold for
$82,000.
Operating loss for the six months ended June 30, 2019 increased by $2 million to $10.7
million, compared to an $8.7
million operating loss for the six months ended June 30, 2018.
Net loss was $10.76 million for
the six months ended June 30, 2019
compared to a net loss of $8.76
million for the six months ended June
30, 2018. The increase in net loss for the six months ended
June 30, 2019 compared to the six
months ended June 30, 2018 was mainly
due to an increase in operating expenses.
Non-GAAP billings for the six months ended June 30, 2019 were $4.55
million, a 18% increase from $3.86
million in the six months ended June
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 Guidance
Dario believes its strategy of focusing more resources in the
B2B channel, over time, will lead to broader penetration, higher
revenues and greater operating leverage of its sophisticated
platform technology for managing chronic diseases. While the B2B
market involves longer sales cycles, and initially less predictable
revenue streams, Dario will be announcing some new relationships in
the coming months as evidence of our work that began in the second
quarter of this year. As a result, the Company anticipates higher
revenues and reduced losses in the second half of 2019 driven by
both continued D2C channels and new B2B channel initiatives.
A Company investor presentation is available at:
http://mydario.investorroom.com/
About DarioHealth Corp.
DarioHealth Corp. (NASDAQ: DRIO) is a leading global Digital
Therapeutics (DTx) company revolutionizing the way people manage
their health across the chronic condition spectrum. By delivering
evidence-based interventions that are driven by data, high quality
software and coaching, we developed a novel approach that empowers
individuals to adjust their lifestyle in a personalized way. Our
Cross Functional Team operates at the intersection of life
sciences, behavioral science and software technology to deliver
highly engaging therapeutic interventions. Already one of the
highest rated diabetes solutions, its user-centric approach is
loved by tens of thousands consumers around the globe. DarioHealth
is rapidly moving into new chronic conditions and geographic
markets.
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
states that its new initiatives relating to its platform technology
created a better technology for a broader patient base, that it
will continue to support its D2C sales and marketing initiatives
but with a budget weighted towards broader B2B business
development, its confidence that its product and strategy of
focusing on its B2B channel will maximize the market adoption of
its platform technology in the long run, its belief that the
maturity of its B2B pipeline will soon allow it to resume the type
of double-digit quarterly growth experienced in the first quarter
of this year, that the rebalancing of its resources from D2C to B2B
will reduce its burn-rate and that, as a result, it expects
significant reductions in its net quarterly loss in the second half
of 2019, its confidence that it has built a platform technology
which will deliver better care at a lower cost for patients with
chronic diseases and its belief that the execution of its strategic
plan will create value for all of its stakeholders. 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
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
7,986
|
|
|
$
|
10,997
|
|
Restricted bank
deposits
|
|
|
186
|
|
|
|
180
|
|
Trade
Receivables
|
|
|
278
|
|
|
|
168
|
|
Inventories
|
|
|
1,819
|
|
|
|
1,377
|
|
Other accounts
receivable and prepaid expenses
|
|
|
553
|
|
|
|
591
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
10,822
|
|
|
|
13,313
|
|
|
|
|
|
|
|
|
|
|
LEASE
DEPOSITS
|
|
|
44
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
OPERATING LEASE RIGHT
OF USE ASSET
|
|
|
749
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
|
|
711
|
|
|
|
733
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
12,326
|
|
|
$
|
14,089
|
|
DARIOHEALTH
CORP.
|
CONSOLIDATED
BALANCE SHEETS
|
U.S. dollars in
thousands (except stock and stock data)
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
$
|
2,384
|
|
|
$
|
2,574
|
|
Deferred
revenues
|
|
|
1,398
|
|
|
|
736
|
|
Operating lease
liability
|
|
|
277
|
|
|
|
-
|
|
Other accounts
payable and accrued expenses
|
|
|
1,664
|
|
|
|
1,854
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
5,723
|
|
|
|
5,164
|
|
|
|
|
|
|
|
|
|
|
OPERATING LEASE
LIABILITY
|
|
|
509
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Common Stock of
$0.0001 par value –
Authorized: 160,000,000 shares at June 30, 2019 (unaudited) and
December 31,
2018; Issued and Outstanding: 42,859,386 and 36,607,755 shares at
June 30,
2019 (unaudited) and December 31, 2018, respectively
|
|
|
8
|
|
|
|
8
|
|
Preferred Stock of
$0.0001 par value -
Authorized: 5,000,000 shares at June 30, 2019 (unaudited) and
December 31,
2018; Issued and Outstanding: None at June 30, 2019 (unaudited) and
December
31, 2018
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
106,098
|
|
|
|
98,171
|
|
Accumulated
deficit
|
|
|
(100,012)
|
|
|
|
(89,254)
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
6,094
|
|
|
|
8,925
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders'
equity
|
|
$
|
12,326
|
|
|
$
|
14,089
|
|
DARIOHEALTH
CORP.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
|
U.S. dollars in
thousands (except stock and stock data)
|
|
|
|
Three months
ended
June 30
|
|
|
Six months
ended
June 30
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,651
|
|
|
$
|
2,059
|
|
|
$
|
3,893
|
|
|
$
|
3,815
|
|
Cost of
revenues
|
|
|
1,325
|
|
|
|
1,537
|
|
|
|
3,009
|
|
|
|
2,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
326
|
|
|
|
522
|
|
|
|
884
|
|
|
|
1,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
$
|
991
|
|
|
$
|
1,010
|
|
|
$
|
1,993
|
|
|
$
|
1,752
|
|
Sales and
marketing
|
|
|
2,993
|
|
|
|
2,369
|
|
|
|
6,939
|
|
|
|
4,233
|
|
General and
administrative
|
|
|
1,704
|
|
|
|
2,936
|
|
|
|
2,677
|
|
|
|
3,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
|
5,688
|
|
|
|
6,315
|
|
|
|
11,609
|
|
|
|
9,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(5,362)
|
|
|
|
(5,793)
|
|
|
|
(10,725)
|
|
|
|
(8,708)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation of
warrants
|
|
|
-
|
|
|
|
*)-
|
|
|
|
-
|
|
|
|
1
|
|
Other financial
expense, net
|
|
|
(20)
|
|
|
|
(45)
|
|
|
|
(33)
|
|
|
|
(50)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial
expenses, net
|
|
|
(20)
|
|
|
|
(45)
|
|
|
|
(33)
|
|
|
|
(49)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(5,382)
|
|
|
$
|
(5,838)
|
|
|
$
|
(10,758)
|
|
|
$
|
(8,757)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deemed dividend
related to warrant exchange
|
|
$
|
-
|
|
|
$
|
493
|
|
|
$
|
-
|
|
|
$
|
493
|
|
Net loss attributable
to holders of Common Stock
|
|
$
|
(5,382)
|
|
|
$
|
(6,331)
|
|
|
$
|
(10,758)
|
|
|
$
|
(9,250)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share
|
|
$
|
(0.13)
|
|
|
$
|
(0.32)
|
|
|
$
|
(0.27)
|
|
|
$
|
(0.52)
|
|
Weighted average
number of Common Stock used in
computing basic and diluted net loss per share
|
|
|
42,519,825
|
|
|
|
19,801,891
|
|
|
|
39,654,408
|
|
|
|
17,758,064
|
|
DARIOHEALTH
CORP.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
U.S. dollars in
thousands
|
|
|
|
Six months
ended
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(10,758)
|
|
|
$
|
(8,757)
|
|
Adjustments required
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Stock-based
compensation and Common Stock to service providers
|
|
|
1,310
|
|
|
|
2,651
|
|
Depreciation
|
|
|
93
|
|
|
|
101
|
|
Amortization of
operating lease right of use
|
|
|
130
|
|
|
|
-
|
|
Increase is trade
receivables
|
|
|
(110)
|
|
|
|
(66)
|
|
Decrease in accounts
receivables and prepaid expenses
|
|
|
38
|
|
|
|
47
|
|
Decrease (increase)
in inventories
|
|
|
(442)
|
|
|
|
16
|
|
Increase (decrease)
in trade payables
|
|
|
(190)
|
|
|
|
226
|
|
Increase (decrease)
in other accounts payable and accrued expenses
|
|
|
(131)
|
|
|
|
939
|
|
Increase in deferred
revenues
|
|
|
662
|
|
|
|
50
|
|
Change in operating
lease liability
|
|
|
(93)
|
|
|
|
-
|
|
Change in fair value
of warrants to purchase shares of Common Stock
|
|
|
-
|
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
|
(9,491)
|
|
|
|
(4,794)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Maturities
(investment) of restricted bank deposit
|
|
|
(6)
|
|
|
|
76
|
|
Investment in lease
deposits
|
|
|
(1)
|
|
|
|
-
|
|
Purchase of property
and equipment
|
|
|
(71)
|
|
|
|
(23)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) investing activities
|
|
|
(78)
|
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of Common Stock, Preferred Stock and warrants, net
of issuance cost
|
|
|
6,558
|
|
|
|
6,034
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
|
6,558
|
|
|
|
6,034
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
(3,011)
|
|
|
|
1,293
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
10,997
|
|
|
|
3,718
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
7,986
|
|
|
$
|
5,011
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment for directors
and consultants under Shares for Salary Program
|
|
$
|
59
|
|
|
$
|
201
|
|
DARIOHEALTH
CORP.
|
Reconciliation of
Revenue to Billings (Non-GAAP)
|
U.S. dollars in
thousands
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
GAAP
Revenue
|
|
$1,651
|
|
$2,059
|
|
$3,893
|
|
$3,815
|
Add:
|
|
|
|
|
|
|
|
|
Change in
Deferred
Revenue
|
|
$102
|
|
$50
|
|
$662
|
|
$50
|
|
|
|
|
|
|
|
|
|
Billings
(Non-GAAP)
|
|
$1,753
|
|
$2,109
|
|
$4,555
|
|
$3,865
|
Contacts:
DarioHealth Corporate Contact: Claudia Levi, Content &
Communications Manager, claudia@mydario.com,
+1-347-767-4220
For Media Inquiries: Catherine Polisi Jones, Polisi Jones
Communications, cjones@polisijones.com, +1-917-330-8934
View original content to download
multimedia:http://www.prnewswire.com/news-releases/dariohealth-reports-results-for-second-quarter-2019-300900656.html
SOURCE DarioHealth Corp.