DarioHealth Q3 net loss narrows to $8.85M
A Fortune 50 employer selected DarioHealth’s cardiometabolic platform for more than 100,000 eligible employees, with launch expected in the first half of 2027.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
DarioHealth Corp. (DRIO) reported third-quarter 2026 revenue of $5.311 million, up 6.1% year over year, and net loss of $8.849 million, versus $10.466 million. For the first nine months, revenue fell 6.2% to $16.071 million, while net loss narrowed to $25.022 million from $32.683 million.
Cash and cash equivalents were $27.844 million at September 30, 2026; operating activities used $17.646 million in the nine-month period. The July registered direct offering generated approximately $23.5 million gross. DarioHealth designated $22.824 million of net proceeds as an equity cure and reported compliance with its EBITDA covenant at quarter-end. A tariff refund provided a $448,000 benefit to nine-month cost of revenues; approximately $460,000 of an estimated $536,000 refund had been received.
Commercial updates included selection by a Fortune 50 employer for an integrated cardiometabolic care platform for more than 100,000 eligible employees, with launch expected in the first half of 2027, and a New Jersey health-plan contract representing approximately 1.5 million covered lives. DarioHealth had 184 customers as of September 30, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue rose 6.1% to $5.311 million.
- Moderate pointNine-month net loss narrowed to $25.022 million from $32.683 million.
- Moderate pointNine-month operating cash use fell to $17.646 million from $20.054 million.
Negative
- Moderate pointNine-month revenue declined 6.2% to $16.071 million.
- Moderate pointEBITDA covenant noncompliance was cured with $22.824 million of designated net proceeds. 1.1× market cap
Filing Explained
The July 23 offering closed with 2,437,060 common shares sold and warrants exercisable for 1,017,499 additional shares; separate ATM capacity remained at $19,892 thousand.
DarioHealth's Form 10-Q is its unaudited quarterly report and confirms the July
Outstanding pre-funded warrants were exercisable for 3,271,021 common shares at
Separately, the ATM lets the company sell new common shares gradually; at
Key Figures
Key Terms
B2B2C technical
Equity Cure financial
pre-funded warrants financial
Level 3 measurement financial
deferred revenues financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were DRIO's third-quarter 2026 revenue and net loss?
How much operating cash did DRIO use in the first nine months of 2026?
What were the terms of DRIO's July 2026 offering?
What happened with DRIO's EBITDA covenant?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| |
| For the quarterly period ended |
| |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| |
| For the transition period from to |
Commission File No.
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) |
| |
(Address of Principal Executive Offices) | (Zip Code) |
( |
(Registrant’s telephone number, including area code) |
n/a |
(Former name, former address and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | | Trading Symbol(s) | | Name of exchange on which registered |
|
| The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☐ | Large accelerated filer | ☐ | Accelerated filer |
☒ | Smaller reporting company | ||
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 12, 2026, the registrant had
When used in this quarterly report, the terms “Dario,” “DarioHealth,” “the Company,” “we,” “our,” and “us” refer to DarioHealth Corp., a Delaware corporation and our subsidiary LabStyle Innovation Ltd., an Israeli company, PsyInnovations Inc., a Delaware corporation, Twill, Inc., a Delaware corporation, DarioHealth India Services Pvt. Ltd., an Indian company, and Dario Care LLC, a Delaware limited liability company. Dario is registered as a trademark in the United States, China, Canada, Hong Kong, Australia, Brazil, the EU, and is also registered as a WO (WIPO registration). “DarioHealth” is registered as a trademark in the United States, Israel, China, Canada, Australia, India, Japan, the EU, and as a WO.
Table of Contents
DarioHealth Corp.
Quarterly Report on Form 10-Q
TABLE OF CONTENTS
| | | |
| Page | ||
| | | |
Cautionary Note Regarding Forward-Looking Statements | | 3 | |
| | | |
PART I - FINANCIAL INFORMATION | | | |
| | | |
Item 1. | Condensed Consolidated Interim Financial Statements (unaudited) | | F-1 |
| | | |
Condensed Consolidated Interim Balance Sheets (Unaudited) | | F-2 – F-3 | |
| | | |
Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited) | | F-4 | |
| | | |
Condensed Consolidated Interim Statements of Changes in Stockholders’ Equity (Unaudited) | | F- 5 – F-6 | |
| | | |
Condensed Consolidated Interim Statements of Cash Flows (Unaudited) | | F-7 | |
| | | |
Notes to Condensed Consolidated Interim Financial Statements | | F-8 – F-23 | |
| | | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 4 |
| | | |
Item 4. | Control and Procedures | | 14 |
| | | |
PART II - OTHER INFORMATION | | 15 | |
| | | |
Item 1A. | Risk Factors | | 15 |
| | | |
Item 6. | Exhibits | | 16 |
| | | |
SIGNATURES | | 17 | |
2
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein may address or relate to future events and expectations and as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our business, including many assumptions regarding future events. Such forward-looking statements include statements regarding, among other things:
| ● | our current and future capital requirements and our ability to satisfy our capital needs through financing transactions or otherwise; |
| ● | our ability to meet the requirements of our existing debt facility; |
| ● | our product launches and market penetration plans; |
| ● | the execution of agreements with various providers for our solution; |
| ● | our ability to maintain our relationships with key partners; |
| ● | our ability to maintain or protect the validity of our U.S. and other patents and other intellectual property; |
| ● | our ability to retain key executive members; |
| ● | our ability to internally develop new inventions and intellectual property; |
| ● | the ability to consummate a potential sale, merger or strategic business combination; |
| ● | general market, political and economic conditions in the countries in which we operate, including those related to recent unrest and actual or potential armed conflict in Israel and other parts of the Middle East, such as the attack by Hamas and other terrorist organizations in the Middle East and Israel’s war against them; |
| ● | changes or developments in U.S. laws or policies, including changes in U.S. trade policies and tariffs; |
| ● | interpretations of current laws and the passage of future laws; and |
| ● | acceptance of our business model by investors. |
Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “would,” “could,” “scheduled,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these words or comparable terminology. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors. These statements may be found under the section of our Annual Report on Form 10-K for the year ended December 31, 2025 (filed on March 19, 2026) entitled “Risk Factors” as well as in our other public filings.
In light of these risks and uncertainties, and especially given the start-up nature of our business, there can be no assurance that the forward-looking statements contained herein will in fact occur. Readers should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
3
Table of Contents
DARIOHEALTH CORP. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2026
UNAUDITED
INDEX
| | Page |
Condensed Consolidated Interim Balance Sheets | | F-2 – F-3 |
| | |
Condensed Consolidated Interim Statements of Comprehensive Loss | | F-4 |
| | |
Condensed Consolidated Interim Statements of Changes in Stockholders’ Equity | | F-5 – F-6 |
| | |
Condensed Consolidated Interim Statements of Cash Flows | | F-7 |
| | |
Notes to Condensed Consolidated Interim Financial Statements | | F-8 – F-23 |
F-1
Table of Contents
DARIOHEALTH CORP. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED)
U.S. dollars in thousands
| | | | | | |
| | September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
ASSETS | | | | | | |
| | | | | | |
CURRENT ASSETS: |
| | |
| | |
Cash and cash equivalents | | $ | | | $ | |
Short-term bank deposits | | | | | | |
Short-term restricted bank deposits | |
| | |
| |
Trade receivables, net | |
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| |
Inventories | |
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| |
Other accounts receivable and prepaid expenses | |
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| |
| | | | | | |
Total current assets | |
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NON-CURRENT ASSETS: | |
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| |
Deposits | | | | | | |
Operating lease right of use assets | |
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| |
Long-term assets | | | | | | |
Property and equipment, net | | | | | | |
Intangible assets, net | | | | | | |
Goodwill | | | | | | |
| | | | | | |
Total non-current assets | | | | | | |
| | | | | | |
Total assets | | $ | | | $ | |
The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.
F-2
Table of Contents
DARIOHEALTH CORP. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
| | | | | | |
| | September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
| | |
| | | | | | |
CURRENT LIABILITIES: |
| | |
| | |
Trade payables | | $ | | | $ | |
Deferred revenues | |
| | |
| |
Operating lease liabilities | | | | | | |
Other accounts payable and accrued expenses | |
| | |
| |
| | | | | | |
Total current liabilities | |
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| |
| | | | | | |
NON-CURRENT LIABILITIES | | | | | | |
Operating lease liabilities | |
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| |
Long-term loan | |
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| |
Warrant liability | | | | | | |
Other long-term liabilities | |
| | |
| |
| | | | | | |
Total non-current liabilities | | | | | | |
| | | | | | |
STOCKHOLDERS’ EQUITY ** | |
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| |
Common stock of $ | |
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| |
Additional paid-in capital | |
| | |
| |
Accumulated deficit | |
| ( | |
| ( |
| | | | | | |
Total stockholders’ equity | |
| | |
| |
| | | | | | |
Total liabilities and stockholders’ equity | | $ | | | $ | |
(**) See note 1f regarding reverse share split.
The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.
F-3
Table of Contents
DARIOHEALTH CORP. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
| | | | | | | | | | | | |
| | Three months ended | | Nine months ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Revenues: | | | | | | | | | | | | |
Services | | $ | | | $ | | | $ | | | $ | |
Consumer hardware | | | | | | | | | | | | |
Total revenues | | | | | | | | | | | | |
| | | | | | | | | | | | |
Cost of revenues: | | | | | | | | | | | | |
Services | | | | | | | | | | | | |
Consumer hardware | | | | | | | | | | | | |
Amortization of acquired intangible assets | | | | | | | | | | | | |
Total cost of revenues | |
| | |
| | |
| | |
| |
| | | | | | | | | | | | |
Gross profit | |
| | |
| | |
| | |
| |
| | | | | | | | | | | | |
Operating expenses: | |
| | |
| | |
| | |
| |
Research and development | | $ | | | $ | | | $ | | | $ | |
Sales and marketing | |
| | |
| | |
| | |
| |
General and administrative | |
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| | |
| |
| | | | | | | | | | | | |
Total operating expenses | |
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| |
| | | | | | | | | | | | |
Operating loss | |
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| |
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Interest expenses | |
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Other financial expenses (income), net | |
| ( | |
| ( | |
| ( | |
| |
| | | | | | | | | | | | |
Total financial expenses, net | |
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| | |
| |
| | | | | | | | | | | | |
Loss before taxes | | | | | | | | | | | | |
| | | | | | | | | | | | |
Income tax (benefits) | | | ( | | | — | | | | | | |
| | | | | | | | | | | | |
Net loss | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Deemed dividend | | $ | — | | $ | | | $ | — | | $ | |
| | | | | | | | | | | | |
Net loss attributable to common shareholders | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Net loss per share: | |
| | |
| | |
| | |
| |
| | | | | | | | | | | | |
Basic and diluted loss per share of common stock | | $ | | | $ | | | $ | | | $ | |
Weighted average number of common stock used in computing basic and diluted net loss per share** | |
| | |
| | |
| | |
| |
(**) See note 1f regarding reverse share split.
The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.
F-4
Table of Contents
DARIOHEALTH CORP. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Additional | | | | | Total | ||
| | Common Stock | | Preferred Stock | | paid-in | | Accumulated | | stockholders’ | |||||||||
Three Months Ended September 30, 2026 | | Number** | | Amount | | Number | | Amount | | capital | | deficit | | equity | |||||
Balance as of June 30, 2026 | | | | $ | |
| — | | $ | — | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | |
Issuance of common stock and prefunded warrant, net of issuance cost |
| | | | *)- | | — | | | — | | | | | | — | | | |
Exercise of pre-funded warrant to common stock |
| | | | *)- | | — | | | — | | | — | | | — | | | — |
Stock-based compensation |
| | | | — | | — | | | — | | | | | | — | | | |
Net loss | | — | | | — | | — | | | — | | | — | | | ( | | | ( |
| | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2026 |
| | | $ | |
| — | | $ | — | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Additional | | | | | Total | ||
| | Common Stock | | Preferred Stock | | paid-in | | Accumulated | | stockholders’ | |||||||||
Nine Months Ended September 30, 2026 | | Number** | | Amount | | Number | | Amount | | capital | | deficit | | equity | |||||
Balance as of December 31, 2025 | | | | $ | |
| — | | $ | — | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | |
Issuance of common stock and prefunded warrant, net of issuance cost | | | | | *)- | | — | | | — | | | | | | — | | | |
Issuance of common stock related to lock up agreement | | | | | *)- | | — | | | — | | | — | | | — | | | — |
Exercise of pre-funded warrant to common stock |
| | |
| *)- |
| — | |
| — | |
| | |
| — | |
| |
Stock-based compensation |
| | |
| — |
| — | |
| — | |
| | |
| — | | | |
Net loss |
| — | |
| — |
| — | |
| — | |
| — | |
| ( | |
| ( |
| | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2026 |
| | | $ | |
| — | | $ | — | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | |
(**) See note 1f regarding reverse share split.
The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.
F-5
Table of Contents
DARIOHEALTH CORP. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Additional | | | | | Total | ||
| | Common Stock | | Preferred Stock | | paid-in | | Accumulated | | stockholders’ | |||||||||
Three Months Ended September 30, 2025 | | Number** | | Amount | | Number | | Amount | | capital | | deficit | | equity | |||||
Balance as of June 30, 2025 | | | $ | | | $ | *)- | | $ | | $ | ( | | $ | |||||
| | | | | | | | | | | | | | | | | | | |
Conversion of preferred stock to common stock and prefunded warrant | | | | *)- | | ( | | | *)- | | | *)- | | | — | | | — | |
Round-up of shares due to reverse share split effectuated on August 28, 2025 | | | | *)- | | — | | | — | | | — | | | — | | | — | |
Deemed dividend related to issuance of preferred stock | | — | | | — | | — | | | — | | | | | ( | | | — | |
Exercise of prefunded warrant to common stock | | | | *)- | | — | | | — | | | | | — | | | |||
Stock-based compensation | | | | *)- | | — | | | — | | | | | — | | | |||
Issuance of common stock and prefunded warrant, net of issuance cost | | | | *)- | | — | | | — | | | | | — | | | |||
Net loss | | — | | | — | | — | | | — | | | — | | | ( | | | ( |
| | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2025 | | | | $ | |
| — | | $ | — | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Additional | | | | | Total | ||
| | Common Stock | | Preferred Stock | | paid-in | | Accumulated | | stockholders’ | |||||||||
Nine Months Ended September 30, 2025 | | Number** | | Amount | | Number | | Amount | | capital | | deficit | | equity | |||||
Balance as of December 31, 2024 | | | | $ | |
| | | $ | *)- | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | |
Issuance of common stock and prefunded warrant, net of issuance cost |
| | | | *)- | | — | | | — | | | | | | — | | | |
Exercise of prefunded warrant to common stock |
| | |
| *)- |
| — | |
| — | |
| | |
| — | |
| |
Round-up of shares due to reverse share split effectuated on August 28, 2025 |
| | |
| *)- |
| — | | | — | |
| — | |
| — | |
| — |
Modification of preferred stock | | — | | | — | | — | | | — | | | | | | ( | | | — |
Deemed dividend related to issuance of preferred stock |
| — | | | *)- | | — | | | — | | | | | | ( | | | — |
Stock-based compensation |
| | | | *)- | | — | | | — | | | | | | — | | | |
Conversion of preferred stock to common stock and prefunded warrant |
| | | | — | | ( | | | *)- | | | — | | | — | | | — |
Issuance of preferred stock, net of issuance cost | | — | | | — | | | | | *)- | | | | | | — | | | |
Issuance of warrants in connection with Callodine loan facility, net of issuance cost | | — | | | — | | — | | | — | | | | | | — | | | |
Modification of Avenue warrants | | — | | | — | | — | | | — | | | | | | — | | | |
Net loss |
| — | | | — | | — | | | — | | | — | | | ( | | | ( |
| | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2025 |
| | | $ | |
| - | | $ | *)- | | $ | | | $ | ( | | $ | |
*) Represents an amount lower than $1.
(**) See note 1f regarding reverse share split.
The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.
F-6
Table of Contents
DARIOHEALTH CORP. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED)
U.S. dollars in thousands
| | | | | | |
| | Nine months ended | ||||
| | September 30, | ||||
| | 2026 | | 2025 | ||
Cash flows from operating activities: | | | | | | |
Net loss | | $ | ( | | $ | ( |
Adjustments required to reconcile net loss to net cash used in operating activities: | |
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| |
Stock-based compensation | |
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| |
Change in operating lease right of use assets | |
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Amortization of acquired intangible assets | |
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Depreciation and impairment | |
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Change in fair value of warrant liability | |
| ( | |
| ( |
Accrued interest on short term bank deposits | | | ( | | | — |
Non-cash financial expenses | |
| | |
| |
Changes in operating assets and liabilities: | | | | | | |
Decrease in trade receivables, net | |
| | |
| |
Decrease (increase) in other accounts receivable, prepaid expense and long-term assets | |
| | |
| ( |
Decrease (increase) in inventories | |
| | |
| ( |
Increase (decrease) in trade payables | |
| ( | |
| |
Decrease in other accounts payable and accrued expenses | |
| ( | |
| ( |
Decrease (increase) in deferred revenues | |
| | |
| ( |
Decrease in operating lease liabilities | |
| ( | |
| ( |
Other | |
| ( | |
| |
Net cash used in operating activities | |
| ( | |
| ( |
| | | | | | |
Cash flows from investing activities: | |
| | |
| |
Investment in short term bank deposit | | | ( | | | — |
Proceeds from maturity of short-term bank deposit | | | | | | — |
Purchase of property and equipment | |
| ( | |
| ( |
Disposals of property and equipment | | | | | | — |
Net cash provided by (used in) investing activities | |
| | |
| ( |
| | | | | | |
Cash flows from financing activities: | |
| | |
| |
Proceeds from AT-The-Market ("ATM") equity offerings | | | | | | — |
Issuance costs related to ATM equity offerings | | | ( | | | — |
Proceeds from issuance of common stock, preferred stock and warrant, net of issuance cost | |
| | |
| |
Proceeds from borrowings on credit agreement | | | — | | | |
Repayment of long-term loan | | | — | | | ( |
Net cash provided by financing activities | |
| | |
| |
| | | | | | |
Increase in cash, cash equivalents and restricted cash and cash equivalents | |
| | |
| |
Effect of exchange rate differences on cash, cash equivalents and restricted cash and cash equivalents | | | | | | ( |
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | |
| | |
| |
Cash, cash equivalents and restricted cash and cash equivalents at end of period | | $ | | | $ | |
Supplemental disclosure of cash flow information: | |
| | |
| |
Cash paid during the period for interest on long-term loan | | $ | | | $ | |
Non-cash activities: | |
| | |
| |
Exercise of pre-funded warrants to common stock | | $ | | | $ | |
Right-of-use assets obtained in exchange for lease liabilities | | $ | | | $ | — |
Purchase of property and equipment on credit | | $ | | | $ | — |
The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 1: - GENERAL
| a. | DarioHealth Corp. (the “Company” or “DarioHealth”) was incorporated in the State of Delaware and commenced operations on August 11, 2011. |
DarioHealth is a global digital therapeutics (DTx) company delivering personalized evidence-based interventions that are driven by precision data analytics, software, and personalized coaching, DarioHealth has developed an approach with the intent to empower individuals to adjust their lifestyle in a holistic way.
DarioHealth’s cross-functional team operates at the intersection of life sciences, behavioral science, and software technology to deliver seamlessly integrated and highly engaging digital therapeutics interventions. Our 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.
DarioHealth’s digital therapeutic platform has been designed with a ‘user-first’ strategy, focusing on the user’s needs first and foremost, and user experience and satisfaction. User satisfaction is constantly measured and drives all Company processes, including our technology design.
The Company has
| b. | The Company has a wholly owned subsidiary, LabStyle Innovation Ltd. (“LabStyle”), which was incorporated and commenced operations on September 14, 2011, in Israel. Its principal business activity is to hold the Company’s intellectual property and to perform research and development, manufacturing, marketing, and other general and administrative business activities. |
| c. | On February 15, 2024, the Company acquired Twill, pursuant to the terms of an Agreement and Plan of Merger (the “Twill Agreement”). Pursuant to the provisions of the Twill Agreement, Twill Merger Sub, Inc. (“Merger Sub”) was merged with and into Twill, the separate corporate existence of Merger Sub ceased and Twill continued as the surviving company and a wholly owned subsidiary of the Company. Twill is a clinical grade technology company working to shorten the distance between need and care by configuring personalized digital therapeutics and care solutions at scale for the modern healthcare cloud. Twill’s Intelligent Healing Platform integrates artificial intelligence (“AI”) with empathy, making healing more personal, precise, and connected for the entire care journey. Twill deploys a full spectrum of science-backed care solutions-including digital therapeutics, coaching, community, and well-being products for pharma, health plans, enterprises, and individuals everywhere. |
| d. | The Company has, through its wholly owned subsidiary PsyInnovations Inc., a Delaware corporation, an Indian subsidiary DarioHealth India Services Pvt. Ltd, which serves as the Company’s primary research and development center. DarioHealth India Services Pvt. Ltd is engaged in software development and other research and development activities in support of the Company’s operations. |
| e. | The Company has, through its wholly owned subsidiary Dario Care LLC, a Delaware limited liability company, was formed to enable the Company to expand its business into the healthcare services sector and operate as a Management Services Organization (“MSO”), providing non-clinical, administrative, and operational support services. |
| f. | Effective as of August 28, 2025, the Company effected a reverse stock split of its outstanding shares of the Company's common stock (the “Common Stock”) at a ratio of twenty-for-one (the “Reverse Stock Split”). The Reverse Stock Split was approved by the Company’s board of directors under authority granted by the Company’s stockholders at the Company’s 2025 Annual Meeting of Stockholders held on July 23, 2025, and was consummated pursuant to a Certificate of Amendment filed with the Secretary of State of Delaware on August 25, 2025. All issued and outstanding share and per share amounts included in the accompanying consolidated financial statements have been adjusted to reflect the Reverse Stock Split for all periods presented. |
g. The Company has incurred net losses since its inception. As of September 30, 2026, the Company has incurred recurring losses and negative cash flows since inception and has an accumulated deficit of $
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial statements as of September 30, 2026 have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited interim condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company’s consolidated financial position as of September 30, 2026, and the Company’s consolidated results of operations and cash flows for the nine months ended September 30, 2026. Results for the nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Use of Estimates
Preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. These estimates are based on management's knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates.
Significant Accounting Policies
a. The significant accounting policies applied in the audited annual consolidated financial statements of the Company as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 are applied consistently in these unaudited interim consolidated financial statements.
b. Concentrations of credit risk:
Financial instruments that potentially subject the Company to credit risks primarily consist of cash and cash equivalents, short-term deposits, restricted deposits, and trade receivables. For cash and cash equivalents, the Company is exposed to credit risks in the event of default by the financial institutions to the extent that amounts recorded on the accompanying consolidated balance sheets exceed federally insured limits. The Company places its cash and cash equivalents and short-term deposits with financial institutions with high-quality credit ratings and has not experienced any losses in such accounts.
For trade receivables, the Company is exposed to credit risk in the event of non-payment by customers to the extent of the amounts recorded on the accompanying consolidated balance sheets.
| | | | | | | | | | | | |
| | | Balance at | | | | | | | | | Balance at |
| | | beginning of period | | | Additions | | | Deduction | | | end of period |
Three months ended September 30, 2026 | | | | | | | | | | | | |
Allowance for credit losses | | $ | | | $ | — |
| $ | ( |
| $ | |
| | | | | | | | | | | | |
Three months ended September 30, 2025 | | | | | | | | | | | | |
Allowance for credit losses | | $ | | | $ | |
| $ | — |
| $ | |
| | | | | | | | | | | | |
| | | Balance at | | | | | | | | | Balance at |
| | | beginning of period | | | Additions | | | Deduction | | | end of period |
Nine months ended September 30, 2026 | | | | | | | | | | | | |
Allowance for credit losses | | $ | | | $ | — |
| $ | ( |
| $ | |
| | | | | | | | | | | | |
Nine months ended September 30, 2025 | | | | | | | | | | | | |
Allowance for credit losses | | $ | | | $ | |
| $ | ( |
| $ | |
The Company has no off-balance-sheet concentration of credit risk.
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES (Cont.)
As of September 30, 2026 and December 31, 2025, the Company’s major customers accounted for
c. Recently issued Accounting Pronouncements
| (i) | In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses. The ASU requires, among other items, additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included in the Statements of Operations. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the effect of adopting this ASU on its disclosures. |
| (ii) | In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. ASU 2025-05 did not have a material impact on the Company’s consolidated financial statements. |
| (iii) | In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU replaces the existing project-stage model with a principles-based approach to determine when capitalization of costs should begin. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, on a prospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this ASU. |
| (iv) | In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. The Company is currently evaluating the potential impact of adopting this ASU. |
NOTE 3: - INVENTORIES
| | | | | | |
| | September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
Raw materials | | $ | | | $ | |
Finished products | |
| | |
| |
| | | | | | |
| | $ | | | $ | |
During the three and nine months periods ended September 30, 2026, total inventory write-down expenses amounted to $
On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Further, on March 4, 2026, the Court of International Trade ruled that U.S. Customs and Border Protection must refund the IEEPA tariffs that were collected. Based on these court rulings affirming the Company's legal right to recover IEEPA tariffs, the Company determined that it is entitled to a tariff refund of approximately $
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 4: - REVENUES
The Company is operating a multi-condition healthcare business, empowering individuals to manage their chronic conditions and take steps to improve their overall health. The Company generates revenues from contracts with enterprise business market groups to provide digital therapeutics solutions for individuals to receive access to services through the Company’s commercial arrangements Business-to-Business-to-Consumer (“B2B2C”); revenues from B2B2C arrangements for the three and nine months ended September 30, 2026 were $
Deferred Revenue
The Company recognizes contract liabilities, or deferred revenues, when it receives advance payments from customers prior to the satisfaction of the Company’s performance obligations. The balance of deferred revenues approximates the aggregate amount of the transaction price allocated to the unsatisfied performance obligations at the end of the reporting period. The Company expects to recognize approximately $
The Company elected to not disclose information about remaining performance obligations for which the variable consideration is allocated to a wholly unsatisfied promise to transfer a distinct good or service that is subject to the variable consideration allocation exception.
The following table presents the significant changes in the deferred revenue balance during the nine months ended September 30, 2026:
| | | |
Balance, beginning of the period |
| $ | |
New performance obligations | | | |
Reclassification to revenue as a result of satisfying performance obligations | | | ( |
| | | |
Balance, end of the period |
| $ | |
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 4: - REVENUES (Cont.)
Costs to Fulfill a Contract
The Company defers costs incurred to fulfill contracts that: (1) relate directly to the contract; (2) are expected to generate resources that will be used to satisfy the Company’s performance obligations under the contract; and (3) are expected to be recovered through revenue generated under the contract. Contract fulfillment costs are expensed as the Company satisfies its performance obligations and recorded into cost of revenue.
Costs to fulfill a contract are recorded in other accounts receivable and prepaid expenses and long-term assets.
Costs to fulfill a contract consist of (1) deferred consumer hardware costs incurred in connection with the delivery of services that are deferred, and (2) deferred costs incurred related to future performance obligations which are capitalized.
Costs to fulfill a contract as of September 30, 2026 and December 31, 2025 consisted of the following:
| | | | | | |
| | September 30, | | December 31, | ||
| | 2026 | | 2025 | ||
Costs to fulfill a contract, current | | $ | | | $ | |
Costs to fulfill a contract, noncurrent | |
| | |
| |
| | | | | | |
Total costs to fulfill a contract | | $ | | | $ | |
Costs to fulfill a contract were as follows:
| | | |
| | | Costs to |
| | | fulfill a contract |
| | | |
Beginning balance as of December 31, 2025 | | $ | |
Additions | | | |
Cost of revenue recognized | | | ( |
| | | |
Ending balance as of September 30, 2026 | | | |
F-12
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 5: - DEBT
Callodine Loan Facility
On April 30, 2025, the Company refinanced its previous $
The outstanding principal balance under the loan shall bear interest at a per annum rate of interest equal to (i) the Secured Overnight Financing Rate (“SOFR”), (as defined in the Credit Agreement) plus (ii) seven and three-quarters of one percent (
In connection with the funding of the closing amount, the Company agreed to issue the Lenders a warrant to purchase an aggregate of
The Company concluded that the Callodine Loan Facility and the Warrant are freestanding financial instruments since these instruments are legally detachable and separately exercisable. The Company has concluded that the Warrant meets all the conditions to be classified as equity pursuant to ASC 480 and ASC 815-40. The Callodine Loan Facility is measured at amortized cost.
With respect to the Initial Commitment Amount only, the fair value of the Callodine Loan Facility is recognized in connection with the Company’s Credit Agreement. The fair value of the Callodine Loan Facility was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the Callodine Loan Facility, which is reported within non-current liabilities (Maturity Date - April 30, 2030) on the consolidated balance sheets, was estimated by the Company as of April 30, 2025 such that the value of the instruments granted by the Company under the Callodine Loan Facility equals the net principal amount (net of origination fees).
The Callodine Loan Facility incorporates comparisons to instruments with similar covenants, collateral, and risk profiles and was obtained using a discounted cash flow technique. On the date of Callodine Loan Facility origination, or April 30, 2025, the discount rate was arrived at by calibrating the loan amount of $
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 5: - DEBT (Cont.)
On November 5, 2025, the Company entered into an Amendment to the Credit Agreement with the Lenders. Among other things, the amendment (i) resets financial covenants and waives financial-covenant testing for the second and third quarters of 2025; (ii) replaces the minimum cash covenant with a $
Orbimed Warrant
On June 9, 2022, the Company entered into a Credit Agreement, with OrbiMed Royalty and Credit Opportunities III, LP (“Orbimed”), as the lender for a
On June 9, 2022 (the closing date of the Orbimed Loan, which was repaid in May 2023), the Company agreed to issue Orbimed a warrant (the “Orbimed Warrant”) to purchase up to
The Company has concluded that the Orbimed Warrant is not indexed to the Company's own stock and should be recorded as a liability measured at fair value with changes in fair value recognized in earnings. The Company remeasurement income related to the Orbimed Warrant for the three and nine-months periods ended September 30, 2026 were $
Pre-Funded Warrants
On February 15, 2024, as part of the acquisition of Twill the Company issued Pre-Funded Warrants to purchase up to
The Company has classified the Pre-Funded Warrants as liability pursuant to ASC 815-40 since the Pre-Funded Warrants do not meet all the equity classification conditions. Accordingly, the Company measured the Pre-Funded Warrants at their fair value. The Pre-Funded Warrants liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of comprehensive loss.
In February 2025, a total of
In February 2026, a total of
During the three and nine months ended September 30, 2026, the Company recognized $
The estimated fair value of the Pre-Funded Warrants liabilities was determined using observable market inputs, primarily the quoted market price of the Company’s common stock, and is classified within Level 2.
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 6: - FAIR VALUE MEASUREMENTS
Under U.S. GAAP, fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value are classified and disclosed in the following three categories:
Level 1 - | Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. |
Level 2 - | Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. |
Level 3 - | Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment, and the investments are categorized as Level 3.
The carrying amounts of cash and cash equivalents, short-term restricted bank deposits, trade receivables, other accounts receivable and prepaid expenses, trade payables and other accounts payable and accrued expenses approximate their fair value due to the short-term maturity of such instruments. In addition, the Callodine Loan Facility approximates its fair value. The Orbimed Warrant liability was measured at fair value using Level 3 unobservable inputs.
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:
| | | | | | | | | | | | | |
| | September 30, 2026 | |||||||||||
| | Fair Value | | | Level 1 | | Level 2 | | Level 3 | ||||
Financial assets: | | | | | | | | | | | | | |
Cash and cash equivalents: | | | | | | | | | | | | | |
U.S. treasury notes | | $ | | | $ | — | | $ | | | $ | — | |
| | | | | | | | | | | | | |
Total financial assets | | $ | | | $ | — | | $ | | | $ | — | |
| | | | | | | | | | | | | |
Financial liabilities: | | | | | | | | | | | | | |
Orbimed Warrant liability | | $ | | | $ | — | | $ | — | | $ | ||
| | | | | | | | | | | | | |
Total financial liabilities | | $ | | | $ | — | | $ | — | | $ | ||
| | | | | | | | | | | | | |
| | December 31, 2025 | |||||||||||
| | Fair Value | | | Level 1 | | Level 2 | | Level 3 | ||||
Financial assets: | | | | | | | | | | | | | |
Cash and cash equivalents: | | | | | | | | | | | | | |
U.S. treasury notes | | $ | | | $ | — | | $ | | | $ | — | |
| | | | | | | | | | | | | |
Total financial assets | | $ | | | $ | — | | $ | | | $ | — | |
| | | | | | | | | | | | | |
Financial liabilities: | | | | | | | | | | | | | |
Orbimed Warrant liability | | | | | | — | | | — | | | ||
Pre-Funded Warrant liability | | | | | | — | | | | | | — | |
| | | | | | | | | | | | | |
Total financial liabilities | | $ | | | $ | — | | $ | | | $ | ||
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 7: - COMMITMENTS AND CONTINGENT LIABILITIES
From time to time, the Company is involved in claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss.
Royalties
The Company has a liability to pay future royalties to the Israeli Innovation Authority (the “IIA”) for participation in programs sponsored by the Israeli government for the support of research and development activities. The Company is obligated to pay royalties to the IIA, amounting to
In connection with specific research and development activities, Physimax Technology (“Physimax”), prior to its acquisition by the Company, received $
During the nine months ended September 30, 2026 and September 30, 2025, the Company did not record significant IIA royalties related to the acquisition of Physimax Technology.
NOTE 8: - INTANGIBLE ASSETS
| | | | | | | | |
a. Finite-lived intangible assets: | | | | | | | | |
| | September 30, | | December 31, | | Weighted Average | ||
| | 2026 | | 2025 | | Remaining Life | ||
| | | | | | As of September 30, 2026 | ||
Original amounts: | | | | | | | | |
Technology | | $ | | | $ | | | |
Brand | |
| | |
| | | — |
Customer Relationship Healthcare | | | | | | | | |
Domains | | | | | | | | |
| |
| | |
| | | |
Accumulated amortization: | | | | | | | | |
Technology | |
| | |
| | | |
Brand | |
| | |
| | | |
Customer Relationship Healthcare | | | | | | | | |
Domains | | | | | | | | |
| |
| | |
| | | |
Intangible assets, net | | $ | | | $ | | | |
| | | | | | | | |
| | | | | | | | |
b. Estimated amortization expense: | | | | | | | | |
| | | | | | | | |
For the year ended December 31, | | | | | | | | |
Remainder of 2026 | | | | | | | | |
2027 | | | | | | | | |
2028 | | | | | | | | |
2029 | | | | | | | | |
Thereafter | | | | | | | | |
| | $ | | | | | | |
c. Amortization expenses for the three and nine months ended September 30, 2026 were $
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 9: - RELATED PARTIES TRANSACTIONS
In February 2025, the Company appointed a new non-executive director to its Board. The director is a member of a consulting firm that has provided investment and business consulting services to the Company since 2021 under a consulting agreement. Pursuant to the consulting agreement (the “Consulting Agreement”), the Company agreed to pay the consultant a monthly cash retainer upon the successful completion of certain milestones. In addition, the Company agreed to issue
On September 2, 2026, the non-executive director retired from the Board, effective September 2, 2026, for personal reasons.
During the three and nine months ended September 30, 2026, the Company recorded share-based compensation expenses related to this service provider in the amounts of $
On July 22, 2026 Dennis Matheis, a member of the Company’s Board of Directors, entered into a Purchase Agreement to purchase
NOTE 10: - STOCKHOLDERS’ EQUITY
| a. | Common Stock |
The holders of Common Stock have the right to one vote for each share of Common Stock held of record by such holder with respect to all matters on which holders of Common Stock are entitled to vote, to receive dividends as they may be declared at the discretion of the Company’s Board of Directors and to participate in the balance of the Company’s assets remaining after liquidation, dissolution or winding up, ratably in proportion to the number of shares of Common Stock held by them after giving effect to any rights of holders of preferred stock. Except for contractual rights of certain investors, the holders of Common Stock have no pre-emptive or similar rights and are not subject to redemption rights and carry no subscription or conversion rights.
On July 23, 2025, the Company’s stockholders voted to approve an amendment to the Certificate of Incorporation of the Company to increase the number of authorized Common Stock from one hundred sixty million (
| b. | Registered Direct and Securities Purchase Agreements Offerings |
On July 22, 2026, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with institutional investors, pursuant to which the Company agreed to issue and sell to the investors in a registered direct offering priced at-the-market under Nasdaq rules (the “Offering”) an aggregate of
On September 22, 2025, the Company entered into securities purchase agreements with accredited investors relating to an offering and the sale of an aggregate of
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 10: - STOCKHOLDERS’ EQUITY (Cont.)
| c. | ATM Offering |
On March 30, 2026, the Company entered into an At-The-Market Sales Agreement (the “ATM”), allowing the Company to sell its common stock for aggregate sales proceeds of up to $
| d. | Pre-Funded Warrant Exercises |
On September 19, 2025, out of the pre-funded warrants that were issued in July 2020,
On August 25, 2026, out of the pre-funded warrants that were issued in September 2025,
As of September 30, 2026, the Company’s total outstanding prefunded warrants were exercisable into
| e. | Preferred Stock |
On September 18, 2025, the Company, upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock and the approval of the Company’s Board of Directors, filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series A-1 Preferred Stock an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series C Preferred Stock, an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series C-2 Preferred Stock, an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series D Preferred Stock, Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series D-1 Preferred Stock, an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series D-2 Preferred Stock, and an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series D-3 Preferred Stock, all with the Secretary of State of the State of Delaware.
The Series C Certificates of Designation and Series D Certificates of Designation were amended to accelerate the mandatory conversion period of all outstanding shares of each such series into shares of the Company’s Common Stock, or at each holder’s election in pre-funded warrants, effective as of September 18, 2025. The Series A-1 Certificate of Designation was amended to provide holders with the option to receive pre-funded warrants in lieu of Common Stock.
On September 25, 2025, the Company, upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock and the approval of the Company’s Board of Directors, filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series C-1 Preferred Stock with the Secretary of State of the State of Delaware. The Series C-1 Certificate of Designation was amended to accelerate the mandatory conversion period of all outstanding shares of such series into shares of the Company’s Common Stock, or at each holder’s election in pre-funded warrants, effective as of September 25, 2025.
In connection with such mandatory conversion, each holder of preferred stock received all accrued and unpaid dividends, including any dividend shares or payment-in-kind shares, in addition to the conversion shares that were issuable upon conversion, subject to certain beneficial ownership blockers.
During the three and nine-month periods ended September 30, 2025, the Company accounted for the dividend shares of Common Stock upon the dividend shares earned by Series C, C-1 and C-2 Preferred Stock as a deemed dividend in a total amount of $
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 10: - STOCKHOLDERS’ EQUITY (Cont.)
In September 2025, all outstanding shares of Series C, C-1 and C-2 Preferred Stock, totaling
In September 2025, all outstanding shares of Series A-1 Preferred Stock and B-1 Preferred Stock, totaling
In September 2025, all outstanding shares of Series D, D-1, D-2 and D-3 Preferred Stock, totaling
During the three and nine-months periods ended September 30, 2025, the Company accounted for the dividend shares of Common Stock upon the dividend shares earned by Series D and D-1 Preferred Stock as a deemed dividend for an amount of $
During the three and nine-months periods ended September 30, 2025, the Company accounted for the dividend shares of Common Stock upon the dividend shares earned by Series D-2 and D-3 Preferred Stock as a deemed dividend for an amount of $
| f. | Lock-Up Agreements |
On October 20, 2025, the Company and holders that previously entered into the Lock-Up Agreement entered into a Second Amended and Restated Lock-Up Agreement (the “Second A&R Lock-Up Agreement”) pursuant to which the Lock-Up Period shall automatically terminate, and all share consideration shall be accelerated and immediately be issued by the Company in full (to the extent not already issued) upon (A) any merger or consolidation of the Company with or into another individual, entity, corporation, partnership, association, limited liability company, limited liability partnership, joint-stock company, trust or unincorporated organization, (B) any sale of all or substantially all of the Company’s assets in one transaction or a series of related transactions, or (C) any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property.
| g. | Stock plans |
On October 14, 2020, the Company’s stockholders approved the 2020 Plan. Under the 2020 Plan, options to purchase shares of Common Stock may be granted to employees and non-employees of the Company or any affiliate, each option granted can be exercised to
On July 23, 2025, the Company’s stockholders resolved to amend and restate the Company’s 2020 Plan, to (i) provide that for each of the calendar years ending on December 31, 2026, December 31, 2027, December 31, 2028, December 31, 2029 and December 31, 2030, the number of shares available under the 2020 Plan shall be increased by an additional number of shares of the Company’s Common Stock, equal to six percent (
In January 2026, pursuant to the terms of the 2020 Plan as approved by the Company’s stockholders, the Company increased the number of shares authorized for issuance under the 2020 Plan by
On January 29, 2026 the Company’s stockholders resolved to amend the Company’s 2020 Plan, to increase the number of shares authorized for issuance under the 2020 Equity Incentive Plan by
| h. | Stock Option, Restricted Stock and Warrant Grants |
2026 Grants
Employees and Consultants: During the three and nine months ended September 30, 2026, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approved grants of an aggregate of
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 10: - STOCKHOLDERS’ EQUITY (Cont.).
contractual term. All such restricted shares and options were issued pursuant to the Company’s Amended and Restated 2020 Equity Incentive Plan, as amended (the “2020 Plan”).
Service Providers: During the three and nine months ended September 30, 2026, the Compensation Committee approved grants of
During the three and nine months ended September 30, 2026, the Compensation Committee approved the grant of
2025 Grants
Employees and Consultants: During the nine months ended September 30, 2025, the Compensation Committee approved a grant of
Service Providers: During the nine months ended September 30, 2025, the Compensation Committee approved a grant of
| i. | Transactions related to the grant of options to employees, directors, and non-employees under the above plans and non-plan options during the nine-months period ended September 30, 2026, were as follows: |
| | | | | | | | |
| | | | | | Weighted | | |
| | | | Weighted | | average | | |
| | | | average | | remaining | | Aggregate |
| | | | exercise | | contractual | | Intrinsic |
| | Number of | | price | | life | | value |
| | options** | | $ | | Years | | $ |
Options outstanding at beginning of period |
| | | | | |||
Options granted |
| | | | | — | | — |
Options exercised |
| ( | | — | | — | | — |
Options expired |
| ( | | | | — | | — |
Options forfeited |
| ( | | | | — | | — |
| | | | | | | | |
Options outstanding at end of period |
| | | | | |||
| | | | | | | | |
Options vested and expected to vest at end of period |
| | | | | | ||
| | | | | | | | |
Exercisable at end of period |
| | | | |
(**) See note 1f regarding reverse share split.
The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price on the last day of the third quarter of 2026 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2026. This amount is impacted by the changes in the fair market value of the Common Stock.
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 10: - STOCKHOLDERS’ EQUITY (Cont.)
| j. | Transactions related to the grant of restricted shares to employees directors and service providers under the 2020 Plan during the nine-months period ended September 30, 2026, were as follows: |
| | | | | | | |
| | | | | | Number of | |
| | | | | | Restricted shares** | |
| | | | | | | |
Restricted shares outstanding at beginning of year |
| | | | | | |
Restricted shares granted |
| | | | | | |
Restricted shares forfeited |
| | | | | ( | |
| | | | | | | |
Restricted shares outstanding at end of period |
| | | | | | |
(**) See note 1f regarding reverse share split.
As of September 30, 2026, the total unrecognized estimated compensation cost related to non-vested stock options and restricted shares granted prior to that date was $
The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model.
The number of restricted shares vested during the three month period ended September 30, 2026 amounts to
The fair value of the restricted shares granted during the three month period ended September 30, 2026 amounts to $
The following table presents the assumptions used to estimate the fair values of the options granted to employees, directors, and non-employees in the period presented:
| | | | | |
| | Nine months ended |
| ||
| | September 30, |
| ||
| | 2026 | | 2025 |
|
Volatility | | % | % | ||
Risk-free interest rate | | % | % | ||
Dividend yield |
| — | % | — | % |
Expected life (years) |
| | | ||
The total compensation cost related to all of the Company’s stock-based awards recognized during the nine month periods ended September 30, 2026 and 2025 was comprised as follows:
| | | | | | |
| | Three months ended | ||||
| | September 30, | ||||
| | 2026 | | 2025 | ||
Cost of revenues | | $ | | | $ | |
Research and development | |
| | |
| |
Sales and marketing | |
| | |
| |
General and administrative | |
| | |
| |
| | | | | | |
Total stock-based compensation expenses | | $ | | | $ | |
| | | | | | |
| | Nine months ended | ||||
| | September 30, | ||||
| | 2026 | | 2025 | ||
Cost of revenues | | $ | | | $ | |
Research and development | |
| | |
| |
Sales and marketing | |
| | |
| |
General and administrative | |
| | |
| |
| | | | | | |
Total stock-based compensation expenses | | $ | | | $ | |
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 11: - SELECTED STATEMENTS OF OPERATIONS DATA
Other Financial expenses (income), net:
| | | | | | | | | | | | |
| | Three months ended | | Nine months ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Bank charges | | $ | | | $ | | | $ | | | $ | |
Foreign currency adjustments expenses, net | |
| ( | |
| | |
| | |
| |
Interest income | | | ( | | | ( | | | ( | | | ( |
Remeasurement of long-term loan | | | — | | | — | | | — | | | |
Remeasurement of warrant liability | | | ( | | | ( | | | ( | | | ( |
Modification of warrants | | | — | | | — | | | — | | | |
| | | | | | | | | | | | |
Other financial expense (income), net | | $ | ( | | $ | ( | | $ | ( | | $ | |
NOTE 12:- SEGMENT REPORTING
The Company identifies operating segments in accordance with ASC Topic 280, “Segment Reporting,” as components of an entity for which discrete financial information is available and is regularly reviewed by the chief operating decision maker, or decision-making group, in making decisions regarding resource allocation and evaluating financial performance.
The Company operates as
Since the Company operates as
Geographic Information
| ● | As of September 30, 2026, the majority of the Company’s long-lived assets are located in Israel and India. |
| ● | As of September 30, 2026, the majority of the Company’s revenue is generated in the U.S. |
NOTE 13: - INCOME TAXES
During the three and nine months ended September 30, 2026, the Company recorded tax benefit in the amount of $
The main reconciling item between the statutory tax rate of the Company and the effective tax rate is the recognition of valuation allowance in respect of deferred taxes relating to accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes.
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DARIOHEALTH CORP. AND ITS SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except stock and per share data)
NOTE 14: - BASIC AND DILUTED NET EARNINGS (LOSS) PER COMMON STOCK
The Company computes net loss per share of Common Stock using the two-class method. Basic and diluted net earnings or loss per share is computed using the weighted-average number of shares outstanding during the period. This calculation includes the total weighted average number of the Common Stock, which includes prefunded warrants.
The total number of potential shares of Common Stock related to outstanding options, warrants and preferred shares excluded from the calculations of diluted net loss per share due to their anti-dilutive effect were
The following table sets forth the computation of the Company’s basic net earnings (loss) per Common Stock:
| | | | | | | | | | | | | |
| | Three months ended | | | Nine months ended | ||||||||
| | September 30, | | | September 30, | ||||||||
| | 2026 | | | 2025 | | 2026 | | 2025 | ||||
Net loss | | $ | | | $ | | $ | | $ | | |||
Deemed dividend | | | — | | | | | — | | | | ||
Less: loss attributable to participating preferred stock | | | — | | | | | — | | | | ||
| | | | | | | | | | | | | |
Net loss attributable to common stock shareholders used in computing basic net loss per share | | $ | | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | | |
Weighted average number of common stock used in computing basic loss per share | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Basic and diluted net loss per common stock | | $ | | | $ | | | $ | | | $ | | |
NOTE 15: - SUBSEQUENT EVENTS
| a. | On October 26, 2026, out of the pre-funded warrants that were issued in September 2025, |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (amounts in thousands except for share and per share amounts)
Readers are advised to review the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the consolidated financial statements and related notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements." You should review the "Risk Factors" section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
The following financial data in this narrative are expressed in thousands, except for stock and stock data or as otherwise noted.
All information included herein relating to shares or price per share reflects the 20-for-1 reverse stock split effected by us on August 28, 2025.
We are a vertically integrated health intelligence platform with a mission to power the behavior changes that drive better health. Unlike software-only digital health platforms, Dario owns the complete chain of value in chronic care management - connected United States Food and Drug Administration (“FDA”)-cleared hardware devices that generate continuous physiological data, AI built on that proprietary data, and a behavior change and coaching layer validated through over 100 peer-reviewed clinical studies. We are committed to transforming healthcare by delivering a comprehensive and highly engaging whole-person health platform, which enables us to create a future where healthy change is effortless and accessible to all.
At the core of our mission and vision is engagement. We believe that most existing digital health solutions in the market fail to deliver improved health outcomes because users are not engaged due to a lack of relevance, personalization, consumerization, and longitudinal data and information. We, and our acquired companies, first commercialized our digital behavioral health products in the direct-to-consumer ("D2C") marketplace, and we continue to use the D2C marketplace as a sandbox and laboratory for innovation. These consumers pay for these digital health products out of their own pockets and are therefore the most value-driven among all healthcare consumers. These consumers demanded that we deliver highly engaging user experiences that deliver strong clinical health outcomes for which consumers will pay. The bottom line is that if users are not engaged in digital solutions over a long period of time, they cannot change their behavior and they cannot get healthier - we first deliver engagement followed by sustained behavior change that then leads to measurable health outcomes and improvement. We believe that our D2C marketplace roots and continued focus delivers better user experiences, longer sustained engagement, stronger clinical outcomes, at the most affordable prices, that then delivers the highest return on investment ("ROI") in the industry.
Our whole-person health model includes the following five elements:
| 1. | Physical Health: Focuses on the prevention, and treatment of physical ailments; primarily cardiometabolic and musculoskeletal conditions. |
| 2. | Mental Health: Addresses emotional and psychological well-being, including stress management, as well as clinical anxiety, and depression across all levels of severity. |
| 3. | Social and Environmental Factors: Considers influences like socioeconomic status, community resources, housing, and education. |
| 4. | Individualized Care: Tailored user journey and care plans that respect personal goals, cultural values, and life circumstances. |
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| 5. | Integration of Clinical Services: Combines different healthcare providers and systems to deliver seamless care for both physical and mental health needs. |
We have created our whole-person healthcare solution through both organic development and acquisitions of leading companies across several therapeutic areas. As a digital health consolidation leader, we have acquired companies that have spent over a decade and nearly $525 million, in combination with our own investment, to develop and deliver the most engaging whole-person health platform in the market to empower individuals to achieve their optimal health through data-driven, precision AI personalized care solutions that integrate the management of physical and mental health needs.
Leveraging advanced analytics, data-driven AI precision and personalization, a deep understanding of consumer behavior, user-centric technology, and a holistic approach, we provide tailored interventions that meet the unique needs of each user to deliver the health industry’s highest levels of user activation and sustained engagement. Our digital self-care solutions ensure optimal levels of clinical outcomes with the highest levels of clinical efficacy by empowering users to overcome the psychological, social, and physical barriers to effective and sustainable behavior change.
With our whole-person digital health platform, we address a broad range of health needs, including chronic condition management (e.g., diabetes, hypertension, obesity, and musculoskeletal issues), behavioral health (e.g., stress, anxiety, and depression), and preventive care. By integrating digital therapeutics and well-being solutions with real-time data monitoring and access to professional care teams, we ensure an AI-driven adaptive and continuous care experience that combines digital self-care with virtual coaching and virtual clinical care. As of 2025, our eligible user base spans millions of individuals worldwide, supported by partnerships with employers, health plans, pharmaceutical companies, and providers.
We serve four primary market segments that drive our business model. Our historic roots, as well as those of our largest acquisition, Twill, Inc. ("Twill"), began in the D2C market. We continue to operate in the D2C market in the U.S. and select international markets and use it as an innovation laboratory. From our D2C origins, Dario and Twill expanded into B2B market segments. These B2B market segments include medium-to-large employers, national and regional health plans, and global pharmaceutical companies.
Our medium-to-large employer market segment is focused on employers with over 1,000 employees. We go to market through a direct sales force, consultants, brokers, and channel partners.
Our health plan customers include five of the nation's largest organizations where we provide our solutions to their members both nationally and regionally. We have specialized in providing our behavioral health offering to Medicare and Medicaid members.
We have provided our engagement platform services to a dozen global pharmaceutical companies across nearly as many medical conditions, delivering three value propositions: (1) Top of the Funnel education and awareness to help companies find new patients for their treatments, (2) Mental and physical health support to improve medication adherence, persistence, and compliance, and (3) Patient journey data analytics.
Recent Commercial Developments
During and subsequent to the quarter ended September 30, 2026, we continued to expand our commercial footprint through new customer awards, expanded relationships with existing customers and continued enhancements to our AI-powered chronic condition management platform. As of September 30, 2026 we had 184 customers.
Among other developments, we announced that a Fortune 50 employer selected us to provide our integrated cardiometabolic care platform to more than 100,000 eligible employees, with commercial launch expected in the first half of 2027. We also announced an expansion of our relationship with a top-five U.S. health insurer to include hypertension care, as well as the launch of an integrated GLP-1 program through licensed healthcare providers, further broadening its cardiometabolic care offerings. In addition, we announced broader deployment of DarioIQ™, our AI-powered engagement platform, across enterprise customers.
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In August 2026, we announced the expansion of our provider-backed cardiometabolic platform to include women's health and sleep solutions, with revenue contributions expected to begin in the fourth quarter of 2026. In September 2026, we announced a new contract with one of New Jersey's largest health plans, representing approximately 1.5 million covered lives, secured through our channel partner, Amwell, for our cardiometabolic solutions and provider-backed care services.
In October 2026, we announced the results of an independent analysis conducted by Aon of 17 studies evaluating our digital health solutions, which supported estimated potential reductions in total healthcare costs ranging from 2.5% to 7.2% within one year. The analysis included a study reporting approximately $5,077 in annual healthcare cost savings per user with type 2 diabetes and 23.5% fewer inpatient discharges compared to matched non-users. These findings represent estimated or observed outcomes from the studies evaluated and may not be indicative of results for all customers or populations.
Also in October 2026, we announced the expansion of an existing contract with a leading regional grocery retailer to include Dario Women™, our women's health solution supporting individuals experiencing perimenopause and menopause symptoms, further expanding our multi-condition offerings to existing customers.
Recent Events and Trends Regarding Tariffs and International Trade
Global trade policy continues to evolve and the ultimate impact of recent developments with respect to U.S. tariffs is unclear. On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs previously imposed under the IEEPA. On March 4, 2026, the Court of International Trade ordered U.S. Customs and Border Protection ("CBP") to begin the refund process for all importers who were subject to the IEEPA duties. In April 2026, the CBP opened a portal for the refund process to begin for certain importers. Based on these court rulings affirming the Company's legal right to recover IEEPA tariffs, the Company determined that it is entitled to a tariff refund of approximately $536. For the nine months ended September 30, 2026, the Company recorded a $448 benefit for these tariffs in cost of revenues on the condensed consolidated statements of operations and comprehensive loss, $265 of which related to prior fiscal year costs and $183 related to current-period costs. The remaining $88 of the approximately $536 tariff refund reduced the carrying value of inventory on the condensed consolidated balance sheet as of September 30, 2026. As of the date of this filing, the Company had received approximately $460 of such refunds, with the remaining amount expected to be received in batches through the U.S. Customs and Border Protection refund process.
The ultimate availability, timing, and amount of any remaining refunds of such tariffs remain uncertain and are subject to further legal, regulatory, and administrative developments. Following the Supreme Court's decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on the Company's business. The Company continues to monitor and evaluate these developments and assess their potential impact on its business, financial condition, and results of operations.
Appointment of Chairman of the Board
On November 3, 2026, our Board of Directors (the “Board”) appointed John R. Palumbo as Chairman of the Board, effective November 4, 2026. Mr. Palumbo succeeds Yoav Shaked, who will continue to serve as a member of the Board.
Executive Officer Appointment
On September 30, 2026, the Board designated Lara Dodo, our Chief Operating Officer, as an executive officer of the Company, effective September 30, 2026.
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Results of Operations
Comparison of the three and nine months ended September 30, 2026 and September 30, 2025 (dollar amounts in thousands)
Revenues
Revenues for the three and nine months ended September 30, 2026 amounted to $5,311 and $16,071, respectively, compared to revenues of $5,007 and $17,128, respectively, during the three and nine months ended September 30, 2025, representing an increase of 6.1% and decrease of 6.2%, respectively. The increase in revenues for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, resulted primarily from an increase in our revenues from direct-to-consumer sales. The decrease in revenues for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, resulted primarily from a non-recurring revenue from a pharmaceutical partner recognized in the prior-year period, partially offset by growth in revenues from our channel partners and an increase in our direct-to-consumer sales.
Cost of Revenues
During the three and nine months ended September 30, 2026, we recorded costs related to revenues in the amount of $2,166 and $6,533, respectively, compared to costs related to revenues of $1,992 and $7,267, respectively, during the three and nine months ended September 30, 2025, representing an increase of 8.7% and a decrease of 10.1%, respectively. The increase in cost of revenues in the three months ended September 30, 2026, compared to the three months ended September 30, 2025, was primarily attributable to higher revenues, together with higher hardware and consumables costs associated with increased sales in our direct to consumer channel, partially offset by a decrease in hosting costs. The decrease in cost of revenues in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was mainly a result of a decrease in amortization of technology recorded in the cost of revenues, decrease in hosting costs and as a result of an IEEPA tariff refund, $448 which was recorded in the nine months ended September 30, 2026.
Cost of revenues consists mainly of the cost of hardware and consumables production, shipping and handling costs, employees' salaries and related overhead costs, amortization of technologies, hosting costs, inventory write-downs and tariff refunds recognized under the IEEPA.
Gross Profit
Gross profit for the three and nine months ended September 30, 2026, amounted to $3,145 (59.2% of revenues) and $9,538 (59.3% of revenues), respectively, compared to $3,015 (60.2% of revenues) and $9,861 (57.6% of revenues), respectively, during the three and nine months ended September 30, 2025. The decrease in gross profit as a percentage of revenues for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, resulted mainly from changes in our revenue mix, including increased sales in our direct to consumer channel and the associated hardware and consumables costs offset by lower hosting costs. The increase in gross profit as a percentage of revenues for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, resulted mainly from a lower amortization of technology, lower hosting server expenses and the IEEPA tariff refund, which were partially offset by higher hardware and consumables expenses. Gross profit for the three and nine months ended September 30, 2026, excluding amortization of acquired technology, stock-based compensation and depreciation, was $3,334 (62.8% of revenues) and $10,094 (62.8% of revenues), respectively, compared to $3,213 (64.2% of revenues) and $11,412 (66.6% of revenues), respectively, during the three and nine months ended September 30, 2025.
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Research and Development Expenses
Our research and development expenses decreased by $1,033, or 31%, to $2,295 for the three months ended September 30, 2026, compared to $3,328 for the three months ended September 30, 2025, and decreased by $4,377, or 39.2%, to $6,780 for the nine months ended September 30, 2026, compared to $11,157 for the nine months ended September 30, 2025. The decrease in research and development expenses was mainly due to efficiencies resulting from post-merger integration activities, and the utilization of AI, resulting in a decrease in headcount and payroll expenses, subcontractors and consulting and stock-based compensation expenses, partially offset by the impact of foreign currency fluctuations resulting from the strengthening of the New Israeli Shekel ("NIS") against the U.S. dollar, as certain of our expenses are denominated in NIS. Our research and development expenses, excluding stock-based compensation and depreciation, for the three and nine months ended September 30, 2026, were $2,147 and $6,618, respectively, compared to $2,909 and $9,697, respectively, for the three and nine months ended September 30, 2025, a decrease of $762 and $3,079, respectively. The decrease in research and development expenses was mainly due to efficiencies and post-merger integration activities, resulting in a decrease in payroll and subcontractors and consulting expenses.
Research and development expenses consist mainly of employees' salaries and related overhead costs involved in research and development activities, stock-based compensation, contractors and engineering expenses, software tools used in research and development, and facilities expenses associated with and allocated to research and development activities.
Sales and Marketing Expenses
Our sales and marketing expenses increased by $210, or 4.6%, to $4,814 for the three months ended September 30, 2026, compared to $4,604 for the three months ended September 30, 2025, and decreased by $1,024, or 6.5%, to $14,684 for the nine months ended September 30, 2026, compared to $15,708 for the nine months ended September 30, 2025. The increase for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, resulted mainly from increased digital marketing expenses that relate to our direct to consumer channel, offset by lower payroll-related expenses and lower stock-based compensation expenses. The decrease for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was mainly a result of lower payroll-related expenses and lower stock-based compensation expenses, offset by an increase in marketing expenses that related to our direct to consumer channel. Our sales and marketing expenses, excluding stock-based compensation, depreciation and amortization, for the three and nine months ended September 30, 2026, were $4,197 and $13,027, respectively, compared to $3,741 and $12,829, respectively, for the three and nine months ended September 30, 2025, an increase of $456 and of $198, respectively. The increase for the three and nine months in sales and marketing expenses was mainly due to an increase in digital marketing expenses offset by lower payroll-related expenses resulting from post-merger integration activities and a reduction in headcount.
Sales and marketing expenses consist mainly of employees' salaries and related overhead costs, stock-based compensation, depreciation of customer relationship intangible asset, digital marketing campaigns, software tools used in sales and marketing and marketing consultants and subcontractors.
General and Administrative Expenses
Our general and administrative expenses decreased by $486, or 10.6%, to $4,081 for the three months ended September 30, 2026, compared to $4,567 for the three months ended September 30, 2025, and decreased by $1,182, or 10.7%, to $9,907 for the nine months ended September 30, 2026, compared to $11,089 for the nine months ended September 30, 2025. The decrease in each of the three and nine months ended September 30, 2026 was mainly due to lower payroll-related expenses, stock-based compensation expenses, insurance related expenses, and lower legal fees, partially offset by the impact of foreign currency fluctuations resulting from the strengthening of the NIS against the U.S. dollar, as certain of our expenses are denominated in NIS and higher investor related expenses. Our general and administrative expenses, excluding stock-based compensation, depreciation and acquisition-related costs, for the three and nine months ended September 30, 2026, were $2,306 and $6,440, respectively, compared to $2,550 and $7,047, respectively, for the three and nine months ended September 30, 2025, a decrease of $244 and $607, respectively. The
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decrease in general and administrative expenses was mainly due to lower payroll-related expenses, lower legal and accounting fees and lower insurance costs.
Our general and administrative expenses consist mainly of employees' salaries and related overhead costs, stock-based compensation, insurance costs, legal and accounting fees, and expenses related to investor relations.
Financial Expenses (Income), net
Our financial expenses, net, for the three months ended September 30, 2026, were $822, representing a decrease of $160, compared to financial expenses, net, of $982 for the three months ended September 30, 2025. Our financial expenses, net, for the nine months ended September 30, 2026, were $2,822, representing a decrease of $1,746, compared to financial expense, net, of $4,568 for the nine months ended September 30, 2025. The decrease in our financial expenses (income), net, was mainly due to re-evaluation of loan and associated costs the nine months ended September 30, 2025.
Financial expenses (income), net primarily consists mainly of credit facility interest expense, interest income from bank deposits, revaluation of warrants and pre-funded warrants and foreign currency translation differences.
Income tax (benefit)
Income tax expense (benefits) were $(18) and $367, respectively for the three and nine months ended September 30, 2026, representing a decrease in tax expenses of $18 and increase of $345, respectively as compared to income tax expenses of $0 and $22, respectively for the three and nine months ended September 30, 2025. Income tax expenses for the three and nine months ended September 30, 2026 were primarily comprised of a change in a tax provision and tax assets related to our subsidiary DarioHealth India Services Pvt. Ltd.
Net loss
Net loss decreased by $1,617, or 15.5%, to $8,849 for the three months ended September 30, 2026, compared to a net loss of $10,466 for the three months ended September 30, 2025, and decreased by $7,661, or 23.4%, to $25,022 for the nine months ended September 30, 2026, compared to a net loss of $32,683 for the nine months ended September 30, 2025. The decrease in net loss for the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025, was mainly due to a decrease in our operating expenses, driven by lower research and development, sales and marketing, general and administrative expenses, and financial expenses.
The factors described above resulted in net loss attributable to common stockholders for the three and nine months ended September 30, 2026, amounted to $8,849 and $25,022, compared to net loss attributable to common stockholders of $18,855 and $51,483 for the three and nine months ended September 30, 2025.
Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial statements presented in accordance with U.S. GAAP within this Quarterly Report on Form 10-Q, management provides certain non-GAAP financial measures ("NGFM") of the Company's financial results, including such amounts captioned "Non-GAAP Adjusted Loss," as presented herein below. The NGFM measures captioned "Non-GAAP Adjusted Loss" are not recognized terms under U.S. 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. We believe these NGFM provide meaningful information to assist investors, shareholders, and other readers of our unaudited condensed consolidated financial statements in making comparisons to our historical financial results, and analyzing the underlying financial results of our operations. We believe the NGFM provide useful information by isolating certain expenses, gains, and losses which are not necessarily indicative of our operating financial results and business outlook.
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A reconciliation to the most directly comparable U.S. GAAP measure to NGFM, as discussed above, is as follows:
| | | | | | | | | | |
| | Three months ended September 30, | | |||||||
| | (in thousands) | | |||||||
| | 2026 | | 2025 | | $ Change | | |||
Net Loss Reconciliation |
| | |
| | |
| | | |
Net loss - as reported | | $ | (8,849) | | $ | (10,466) | | $ | 1,617 | |
| | | | | | | | | | |
Adjustments | |
| | |
| | |
| | |
Depreciation and impairment expense | |
| 50 | |
| 73 | |
| (23) | |
Amortization of acquired technology and brand | | | 473 | | | 474 | | | (1) | |
Financial (income) expenses, net | | | 822 | | | 982 | | | (160) | |
Income tax (benefits) | | | (18) | | | — | | | (18) | |
Stock-based compensation expenses | |
| 2,206 | |
| 2,950 | |
| (744) | |
| | | | | | | | | | |
Non-GAAP adjusted loss | | $ | (5,316) | | $ | (5,987) | | $ | 671 | |
| | | | | | | | | |
| | Nine months ended September 30, | |||||||
| | (in thousands) | |||||||
| | 2026 | | 2025 | | $ Change | |||
Net Loss Reconciliation |
| | |
| | |
| | |
Net loss - as reported | | $ | (25,022) | | $ | (32,683) | | $ | 7,661 |
| | | | | | | | | |
Adjustments | |
| | |
| | |
| |
Depreciation and impairment expense | |
| 158 | |
| 247 | |
| (89) |
Amortization of acquired intangible assets | | | 1,405 | | | 2,357 | | | (952) |
Financial (income) expenses, net | |
| 2,822 | |
| 4,568 | |
| (1,746) |
Income tax (benefits) | |
| 367 | |
| 22 | |
| 345 |
Stock-based compensation expenses | |
| 4,279 | |
| 7,327 | |
| (3,048) |
| | | | | | | | | |
Non-GAAP adjusted loss | | $ | (15,991) | | $ | (18,162) | | $ | 2,171 |
Liquidity and Capital Resources
As of September 30, 2026, we had approximately $27,844 in cash and cash equivalents and $3,309 in short term deposits compared to $21,803 and $4,214 on December 31, 2025.
We have experienced cumulative losses of $477,100 since inception (August 11, 2011) through September 30, 2026, and have stockholders' equity of $71,269 as of September 30, 2026. In addition, we have not completed our efforts to establish a stable recurring source of revenue sufficient to cover our operating costs and expect to continue to generate losses for the foreseeable future.
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 $330,061 through September 30, 2026, and a credit facility, in an aggregate net amount of $25,795 through September 30, 2026.
On April 30, 2025, we entered into a Credit Agreement (the “Credit Agreement”), by and among us as borrower, the financial institutions party thereto from time to time as lenders, and Callodine Commercial Finance, LLC (in its capacity as agent for all lenders, “Agent”, and collectively with other lenders, “Lenders” and each a “Lender”). Under the terms of the Credit Agreement, each Lender agreed to make a multi-draw term loan to us of up to $50,000 (each a “Term Loan”) in which we borrowed $32,500 at the time of closing on April 30, 2025 (the “Callodine Loan Facility”). The Callodine Loan Facility has a five-year term maturing in April 2030, with principal repayments not due until May 2028. The outstanding principal balance bears interest at SOFR plus 7.75%. In addition, subject to the
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discretion of the Agent and the Lenders, we may at our option draw an aggregate of up to an additional $17,500. Of the aggregate loan amount, $2,500 of such additional Term Loan is subject to the achievement of certain revenue and gross margin thresholds, subject to the discretion of the Agent and the Lenders and $15,000 of such additional Term Loan is subject to the discretion of the Agent and the Lenders. As of September 30, 2026, the outstanding balance under the Callodine Loan Facility was $31,247.
All obligations under the Credit Agreement are guaranteed by our subsidiaries (each a “Grantor”). All obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of our and the Grantors’ assets. In the event of a default set forth in the Credit Agreement, the Agent may apply all or any part of the proceeds as collateral to the payment of the obligations in the order and priority as determined by the Agent in its sole discretion.
The outstanding principal balance under the loan shall bear interest at a per annum rate of interest equal to (i) the Term SOFR Rate (as defined in the Credit Agreement) plus (ii) seven and three-quarters of one percent (7.75%). Upon maturity and/or upon an event of default (or upon any acceleration), interest shall automatically accrue without notice to us at a rate per annum equal to the lesser of (i) three percent (3%) over the Contract Rate (as defined in the Credit Agreement), or (ii) the maximum rate of interest permitted to be charged by applicable laws or regulations until paid. We will pay certain fees with respect to the Term Loan, including a closing fee, an exit fee, and an agent fee. Voluntary prepayments of the Term Loan prior to the third anniversary of the closing are also subject to certain pre-payment penalties.
The Credit Agreement contains customary events of default, including with respect to nonpayment of principal, interest, fees or other amounts; material inaccuracy of a representation or warranty; failure to perform or observe covenants; bankruptcy and insolvency events; material monetary judgment defaults; impairment of any material definitive loan documentation; other material adverse effects; key person events and change of control.
The Credit Agreement also contains a number of customary representations, warranties and covenants that, among other things, will limit or restrict our ability and the ability of our subsidiaries to (subject to certain qualifications and exceptions): create liens and encumbrances; incur additional indebtedness; merge, dissolve, liquidate or consolidate; make acquisitions, investments, advances or loans; dispose of or transfer assets; pay dividends or make other payments in respect of their capital stock; amend certain material documents; redeem or repurchase certain debt; engage in certain transactions with affiliates; and enter into certain restrictive agreements.
In connection with the funding of the initial loan amount, we issued the Lenders warrants to purchase an aggregate of 105,707 shares of our Common Stock, initially at an exercise price of $16.56 per share, which was subsequently amended to $15.35 per share in November 2025. In addition, the conversion price applicable to the Lenders' right to convert up to $2,500 of the loan amount into shares of our Common Stock was amended from $19.87 to $15.35 per share in November 2025.
On November 5, 2025, we entered into an Amendment to the Credit Agreement with the Lenders. Among other things, the amendment (i) resets financial covenants and waives financial-covenant testing for the second and third quarters of 2025; (ii) replaces the minimum cash covenant with a $10,000 minimum consolidated unencumbered liquid assets covenant; (iii) adds monthly 13-week cash-flow reporting when liquidity is below certain amount (subject to an EBITDA exception); (iv) clarifies that Tranche B is uncommitted and at lender discretion; and (v) increases the exit fee by $150 (waived if a change-of-control prepayment fee is triggered).
As of September 30, 2026, we did not satisfy the EBITDA financial covenant under the Credit Agreement, as amended. In accordance with the terms of the Credit Agreement, we exercised our first Equity Cure right by designating $22,824 of the net cash proceeds from our July 2026 equity financing as a cure contribution. Following the application of such proceeds, we were in compliance with the applicable financial covenant as of September 30, 2026. The Lenders acknowledged our exercise of the Equity Cure right, and no Event of Default exists under the Credit Agreement in connection with such covenant noncompliance. The exercise of the Equity Cure right did not result in any additional fees, increase in interest rate or other restrictions under the Credit Agreement. Our ability to remain in compliance with the
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financial covenants under the Credit Agreement in future periods will depend, among other things, on our operating performance and liquidity, and there can be no assurance that we will continue to satisfy such requirements.
On December 16, 2024, we and certain purchasers that were holders of our Series B and C Preferred Stock executed lock up agreements (the “Lock Up Agreement”), pursuant to which we agreed to issue, subject to stockholder approval, up to forty percent (40%) of the shares of Common Stock conversion shares of the preferred stock held by such purchaser, including dividend shares of Common Stock due upon conversion of these shares into shares of Common Stock, over the course of twelve (12) months (the “Additional Shares”). Each holder shall be entitled to receive 10% of the Additional Shares for each three (3) month period each holder agrees not to transfer or otherwise sell (subject to certain limitations) the shares of Common Stock issuable upon conversion of the Series B Preferred Stock and Series C Preferred Stock and the dividend shares of Common Stock due upon conversion. Between May 23, 2025 and May 28, 2025, the Company and holders that previously entered into Lock-Up Agreements, entered into an Amended and Restated Lock-Up Agreement (the “A&R Lock-Up Agreement”) pursuant to which the holders agreed to extend the restrictive period previously provided in the Lock-Up Agreements until February 21, 2026 (the “Lock Up Period”) for the right to receive an additional 10% of the Common Stock underlying the Series B Preferred Stock and the Series C Preferred Stock held by the holders. On October 20, 2025, we and holders that previously entered into the Lock-Up Agreement and the A&R Lock-Up Agreement entered into a Second Amended and Restated Lock-Up Agreement (the “Second A&R Lock-Up Agreement”) pursuant to which the Lock-Up Period shall automatically terminate, and all share consideration shall be accelerated and immediately be issued by us in full (to the extent not already issued) upon (A) any merger or consolidation of our with or into another individual, entity, corporation, partnership, association, limited liability company, limited liability partnership, joint-stock company, trust or unincorporated organization, (B) any sale of all or substantially all of our assets in one transaction or a series of related transactions, or (C) any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property.
On March 30, 2026, we entered into the Sales Agreement with A.G.P./Alliance Global Partners, pursuant to which we may offer and sell, from time to time, up to an aggregate of $20,000 of shares of our common stock under the At-The-Market Sales Agreement (the “ATM Program”). Sales of shares under the Sales Agreement, if any, may be made by any method permitted by law that is deemed to be an “at the market offering” under Rule 415(a)(4) under the Securities Act, or in negotiated transactions or as principal pursuant to a separate agreement. We have no obligation to sell any shares under the ATM Program and may suspend offers thereunder or terminate the Sales Agreement at any time, subject to its terms.
We intend to use any net proceeds from the ATM Program for commercial, sales and marketing activities, research and development, potential mergers and acquisitions, repayment of outstanding indebtedness and related interest under the Callodine Loan Facility, and for general corporate and working capital purposes.
The Sales Agreement provides that the Agent is entitled to a commission of 3.0% of the gross sales price of shares sold under the ATM Program. We have also agreed to reimburse certain reasonable and documented expenses of the Agent, including legal fees and other customary expenses, subject to specified caps. The Sales Agreement contains customary representations, warranties, covenants, indemnification obligations and termination provisions.
Through the date of this Quarterly Report on Form 10-Q, we sold an aggregate of 14,191 shares under the ATM Program for gross proceeds of approximately $104 and had $154 in related expenses, out of which $104 were recognized in the statement of changes in stockholders' equity and $50 as deferred asset.
On July 22, 2026, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with institutional investors, pursuant to which we agreed to issue and sell to the investors in a registered direct offering priced at-the-market under Nasdaq rules (the “Offering”) an aggregate of 2,437,060 shares (the “Shares”) of our Common Stock, and pre-funded warrants to purchase an aggregate of 1,017,499 shares of Common Stock. Each Share was sold at an offering price of $6.80 per share, and each pre-funded warrant was sold at an offering price of $6.7999, for aggregate gross proceeds of approximately $23,500 and $22,824 net of Offering expenses. In addition, Dennis Matheis, a member of our Board of Directors, entered into a Purchase Agreement to purchase 14,430 shares of Common Stock at a purchase price of $6.93 per share. The Offering closed on July 23, 2026.
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Management believes that our cash on hand and short-term bank deposits are sufficient to meet our obligations as they come due for at least a period of twelve months from the date of the issuance of these unaudited condensed consolidated financial statements. 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.
Additionally, readers are advised that available resources may be consumed more rapidly than currently anticipated, resulting in the need for additional funding sooner than expected.
Cash Flows
The following table sets forth selected cash flow information for the nine months ended:
| | | | |
| | September 30, | ||
| | 2026 | | 2025 |
| | $ | | $ |
Cash used in operating activities: | | (17,646) |
| (20,054) |
Cash provided by (used in) investing activities: | | 860 |
| (116) |
Cash provided by financing activities: | | 22,824 |
| 24,332 |
| | 6,038 | | 4,162 |
Net cash used in operating activities
Net cash used in operating activities was $17,646 for the nine months ended September 30, 2026, a decrease of 12% compared to $20,054 used in operations for nine months ended September 30, 2025. Cash used in operations decreased mainly due to the decrease in our operating expenses.
Net cash provided by (used in) investing activities
Net cash provided by investing activities was $860 for the nine months ended September 30, 2026, compared to $116 net cash used in investing activities during the same period in 2025. The increase is due to proceeds from short term bank deposit, compared to the same period in 2025.
Net cash provided from financing activities
Net cash provided by financing activities was $22,824 for the nine months ended September 30, 2026, primarily consisting of proceeds from the issuance of shares, compared to $24,332 net cash derived from financing activities during the same period in 2025.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), conducted evaluations of our disclosure controls and procedures. As defined under Sections 13a–15(e) and 15d–15(e) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”, the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the Certifying Officers, to allow timely decisions regarding required disclosures.
Based on their evaluation, the Certifying Officers concluded that, as of September 30, 2026, our disclosure controls and procedures were designed at a reasonable assurance level and were therefore effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Internal Controls
Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our control have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
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PART II - OTHER INFORMATION
Item 1A. Risk Factors.
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition, or future results.
Except as set forth below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Our indebtedness under the Callodine loan facility subjects us to financial covenants and other restrictions that could adversely affect our liquidity, operational flexibility and financial condition.
As of September 30, 2026, we did not satisfy one of the financial covenants under our Credit Agreement with Callodine Commercial Finance, LLC, as amended. Although we exercised our first Equity Cure right in accordance with the terms of the Credit Agreement and, following the application of the applicable cure amount, were in compliance with the financial covenant as of September 30, 2026, there can be no assurance that we will be able to comply with the financial covenants in future periods or that additional equity cures, waivers or amendments will be available when needed or on acceptable terms. Our ability to maintain compliance depends, among other things, on our future operating performance, revenues and liquidity. Any future failure to comply with the financial covenants or other requirements under the Credit Agreement that is not timely cured or waived could result in an Event of Default, which could permit the lenders to accelerate amounts outstanding under the facility and exercise remedies against collateral securing our obligations. Such developments could materially adversely affect our liquidity, financial condition, results of operations and ability to continue implementing our business strategy.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the third quarter of 2026, we issued an aggregate of 235,125 shares of Common Stock to certain service providers as compensation in lieu of cash compensation owed to them for services rendered.
We claimed exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), for the foregoing transactions under Section 4(a)(2) of the Securities Act.
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Item 6. Exhibits.
No. | | Description of |
10.1 | | Separation Agreement, by and between DarioHealth Corp. and Steven Nelson, dated August 20, 2026 (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed on August 21, 2026) |
10.2 | | Consulting Agreement, by and between DarioHealth Corp. and Steven Nelson, dated August 20, 2026 (incorporated by reference to Exhibit 10.2 filed with the Company’s Current Report on Form 8-K filed on August 21, 2026). |
10.3 | | Consulting Agreement, dated as of December 1, 2025, by and between DarioHealth Corp. and Lara Dodo Consulting Inc. |
31.1* | | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a). |
31.2* | | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a). |
32.1** | | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350. |
32.2** | | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350. |
101.1* | | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Loss, (iii) Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail. |
104 | | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). |
*Filed herewith.
**Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 12, 2026 | DarioHealth Corp. | ||
By: | /s/ Erez Raphael | ||
Name: | Erez Raphael | ||
Title: | Chief Executive Officer (Principal Executive Officer) | ||
By: | /s/ Chen Franco-Yehuda | ||
Name: | Chen Franco-Yehuda | ||
Title: | Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer) | ||
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