DarioHealth Closes Strategic Refinancing of Existing Debt Facility of up to $50 Million to Provide Additional Operational Flexibility and Support Growth Initiatives

Rhea-AI Summary

DarioHealth (NASDAQ: DRIO) has secured a strategic debt refinancing facility of up to $50 million from Rand Capital and Callodine Group. The company received $32.5 million at closing, with potential access to an additional $17.5 million based on achieving certain revenue thresholds. The five-year credit agreement matures in April 2030 and includes the issuance of warrants to purchase 2,114,140 shares at $0.8278 per share. Notably, the refinancing defers debt amortization from end of 2025 to 2028, providing DarioHealth with enhanced operational flexibility to execute its B2B2C strategy across pharmaceutical companies, self-insured employers, and payer channels.

Positive

• Secured $32.5 million immediate funding with potential for additional $17.5 million
• Debt amortization deferred from 2025 to 2028, improving cash flow flexibility
• Extended maturity to April 2030, providing long-term financial stability
• Strategic partnership with experienced healthcare investors validates business model

Negative

• Dilution risk from warrant issuance for 2,114,140 shares
• Additional dilution potential from $2.5 million convertible portion
• Revenue thresholds must be met to access additional $17.5 million funding

Insights

Financial Analyst

DarioHealth's $50M refinancing extends debt amortization by three years to 2028, providing crucial operational flexibility with modest equity dilution potential.

DarioHealth's refinancing represents a significant restructuring of the company's debt obligations with several important financial implications:

The deal provides $32.5 million in immediate funding while establishing access to up to $17.5 million in additional capital contingent on achieving specific revenue thresholds. This structure provides immediate liquidity while incentivizing revenue growth.

The most strategically significant aspect of this refinancing is the deferral of debt amortization from 2025 to 2028. This three-year extension provides DarioHealth substantial breathing room to generate operational cash flow before facing principal repayment obligations. The company explicitly states this timing adjustment is designed to allow time to "generate funds from operations to support the Company's cash flow."

The financing terms include equity components that warrant investor attention: a warrant to purchase 2,114,140 shares at $0.8278 per share, plus conversion rights for up to $2.5 million of the loan amount into common stock at $0.9933 per share. These equity features represent potential dilution for existing shareholders but are relatively standard features in growth-stage financing.

The five-year term extending to April 2030 aligns with a longer-term growth horizon, providing stability to the capital structure. The refinancing essentially trades near-term debt service requirements for extended operational flexibility, allowing management to focus on commercial execution rather than immediate debt obligations.

The participation of specialized healthcare investors (Rand Capital and Callodine Group) suggests institutional confidence in DarioHealth's digital health platform, which addresses chronic condition management across diabetes, hypertension, weight management, musculoskeletal pain, and behavioral health.

This refinancing appears positive for DarioHealth's immediate operational prospects by extending its financial runway, though the revenue-contingent additional funding indicates that commercial execution will remain a critical factor for investors to monitor.

• $32.5 million funded at close; up to $17.5 million of additional capital available at the Company's option, subject to the achievement of certain revenue thresholds.
• Capital from the transaction is expected to support execution of strategic plan and fuel continued growth.
• With this new structure, debt amortization is deferred from the end of 2025 to 2028, allowing the time to generate funds from operations to support the Company's cash flow.

NEW YORK, May 1, 2025 /PRNewswire/ -- DarioHealth Corp. (NASDAQ: DRIO) ("Dario" or the "Company"), a leading global digital health company, today announced the closing of a debt financing facility for up to $50 million provided by Rand Capital and Callodine Group. The capital refinances the Company's existing credit facility, providing additional operational flexibility and supporting the commercial execution of its Business-to-Business-to-Consumer ("B2B2C") strategy across pharmaceutical companies, self-insured employers and payer channels.

Under the terms of the credit agreement (the "Credit Agreement"), the Company borrowed $32.5 million at closing. In addition, an aggregate of up to an additional $17.5 million is available to be drawn down at the Company's option, based on the achievement of certain revenue thresholds. The Credit Agreement has a five-year term that matures in April 2030. In connection with the funding of the closing amount, the Company also issued a warrant to purchase  2,114,140 shares of the Company's common stock, with an exercise price of $0.8278. In addition, up to $2.5 million of the loaned amount can be converted into shares of the Company's common stock at a price of $0.9933 per share. With the refinancing and current cash on hand, the Company believes that deferring the debt amortization from the end of 2025 to 2028 will allow the time to generate funds from operations to support the Company's cash flow.

"We are excited to partner with Rand Capital and Callodine Group," said Erez Raphael, Chief Executive Officer of Dario. "This transaction provides us with the needed flexibility to execute upon our strategic growth initiatives. This financing reduces our near-term need for debt principal payments under our previous credit agreement. Given the Rand Capital and Callodine Group investment teams' history of successfully funding innovative healthcare companies with credit solutions, we view this as a strong validation of our platform and vision."

Winston Black, General Partner of Rand Capital, added, "We are excited to support Dario as they commercialize what we believe is one of the most comprehensive, integrated, hyper-personalized chronic care management platforms on the market today. Dario is addressing a multi-billion-dollar market opportunity to empower users with tools that produce better care at lower cost to the health system, as they improve management of expensive chronic diseases in between physician visits."

Dario was represented in this transaction by Sullivan & Worcester LLP who served as legal counsel. Rand Capital and Callodine Group were represented in this transaction by Holland & Knight LLP, who served as legal counsel.

About DarioHealth Corp. 

DarioHealth Corp. (Nasdaq: DRIO) is a leading digital health company revolutionizing how people with chronic conditions manage their health through a user-centric, multi-chronic condition digital therapeutics platform. Dario's platform and suite of solutions deliver personalized and dynamic interventions driven by data analytics and one-on-one coaching for diabetes, hypertension, weight management, musculoskeletal pain, and behavioral health. 

Dario provides its highly user-rated solutions globally to health plans and other payers, self-insured employers, providers of care, and consumers. To learn more about Dario and its digital health solutions, or for more information, visit http://dariohealth.com. 

Cautionary Note Regarding Forward-Looking Statements 

This news release and the statements of representatives and partners of DarioHealth Corp. 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. For example, the Company is using forward-looking statements in this press release when it discusses the potential benefits of the Credit Agreement, including that the funds will be used to support the execution of its business plan and fuel continued growth, the potential for an additional draw down of $17.5 million at the Company's option, based on the achievement of certain revenue thresholds, that the proceeds from the Credit Agreement and current cash on hand, it expects to have the time to generate funds from operations to support the Company's cash flow; that the transaction will provide the Company with the needed flexibility to execute its strategic growth initiatives; and that the Company is addressing a multi-billion-dollar market opportunity. 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. 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 Corporate Contact
Mary Mooney
VP Marketing
mary@dariohealth.com
+1-312-593-4280 

DarioHealth Investor Relations Contact 
Kat Parrella
Investor Relations Manager 
kat@dariohealth.com
+315-378-6922 

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SOURCE DarioHealth Corp.

FAQ

What is the total value of DarioHealth's new debt refinancing facility?

DarioHealth's new debt refinancing facility is worth up to $50 million, with $32.5 million funded at closing and potential for an additional $17.5 million based on revenue thresholds.

When does DRIO's new debt facility mature?

The new debt facility has a five-year term that matures in April 2030.

What warrants were issued as part of DRIO's refinancing deal?

DarioHealth issued warrants to purchase 2,114,140 shares of common stock with an exercise price of $0.8278 per share.

How does the refinancing affect DarioHealth's debt amortization schedule?

The refinancing defers DarioHealth's debt amortization from the end of 2025 to 2028, providing more time to generate operational funds for cash flow.

Who are the providers of DarioHealth's new debt facility?

The debt facility is provided by Rand Capital and Callodine Group.