DarioHealth Reports Fourth Quarter and Year End 2017 Results

Erez Raphael, Chairman and CEO of DarioHealth, commented, "Our vision and focus has enabled us to achieve real progress and numerous accomplishments during 2017 and has positioned Dario for continued growth and market penetration in 2018.

"Both the fourth quarter and full year 2017 saw record sales and we established a more predictable stream of high margin recurring subscription revenues.  We are excited by the positive engagement we are achieving with our users translating into significant monthly user growth and customer lifetime value. Based on our continued momentum, we expect annual revenue growth of at least 60% in 2018.

"Today, more than ever, we have confidence that DarioHealth will transform the market from a pure monitoring solution into a full digital care solution. Dario's products combine monitoring disposables, software and service capabilities, and will result in a significantly better clinical benefit to our user."

Full Year 2017 Results Summary

For the twelve months ended December 31, 2017, revenues were $5.2 million, an 84% increase from $2.8 million for the twelve months ended December 31, 2016.

Revenues generated during the year ended December 31, 2017 were derived mainly from the sales of DarioHealth's components, including the Dario™ Blood Glucose Monitoring System itself, through direct sales to consumers located mainly in the United States, Australia and Germany, through the Company's online stores and through distributors in Canada, Italy and the United Kingdom.

Gross profit increased by $2,141,000, a 258% increase to a profit of $1,311,000 in the twelve months ended December 31, 2017, as compared to a $830,000 gross loss in the twelve months ended December 31, 2016.

Operating loss for the twelve months ended December 31, 2017 increased by $3.3 million to $14.4 million, as compared to a $11.1 million operating loss in the twelve months ended December 31, 2016.

The increase in operating loss was mainly due to the increase in operating expenses partially offset by the improvement in the gross profit compared to the twelve months ended December 31, 2016.

In the first quarter of 2017 we recorded in our financial income, warrant revaluation income of $7.4 million, as a result of reclassifying warrants issued to investors in March and August of 2016 as a "Liability related to Warrants," in 2016, due to its exercise price protection feature. The exercise price protection feature expired on March 8, 2017, and as a result, the liability related to these warrants was reclassified back to shareholders' equity in the first quarter of 2017, while recording related financing income of $7.4 million in the first quarter of 2017.

During the year end preparation of our financial statements we determined with our auditors to revise the accounting approach to this revaluation of warrants and as a result we have revised our first quarter financing income to a financing expense of $1.2 million. As a result of this change we have resubmitted our quarterly reports. This change has no effect on the shareholders' equity nor has it any effect on the Company's cash position.

Net loss attributable to holders of common stock increased by $4.8 million, a 45% increase to $15.7 million in the twelve months ended December 31, 2017, as compared to $10.9 million in the twelve months ended December 31, 2016.

Fourth Quarter 2017 Results Summary

Revenue for the fourth quarter ended December 31, 2017 was $1,578,000, an 88% increase from $838,000 in fourth quarter ended December 31, 2016, and a 15% increase sequentially from the third quarter of 2017.

Revenues for the fourth quarter of 2017 included direct-to-consumer sales in the United States, as well as Australia and initial sales in Germany, and product sales to distributors in the United Kingdom and Canada.

Gross profit increased by $1,216,000, a 188% increase to a profit of $569,000 in the fourth quarter of 2017, as compared to a gross loss of $647,000 in the fourth quarter of 2016.

Operating loss for the fourth quarter ended December 31, 2017 decreased by $0.7 million to $3.1 million, as compared to a $3.8 million operating loss in the fourth quarter ended December 31, 2016. This decrease is mainly due to the improvement in our gross profit partially offset by the increase in our operating expenses.

Net loss attributable to holders of common stock decreased by $0.6 million to $3.26 million in the fourth quarter of 2016, as compared to $3.86 million in the fourth quarter of 2016.

As of December 31, 2017, cash and cash equivalents totaled $3.7 million. During the first quarter, of 2018, the Company raised $6.6 million in a private placement.

Conference Call Details:

Date: Monday, March 19, 2018
Time: 9:00 AM ET
Dial-in Number: 877-407-8035
International Dial-in Number: 201-689-8035
Webcast: http://www.investorcalendar.com/event/26834

About DarioHealth Corp.

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

Cautionary Note Regarding Forward-Looking Statements

This news release and the statements of representatives and partners of DarioHealth Corp. (the "Company") related thereto contain or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "plan," "project," "potential," "seek," "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" are intended to identify forward-looking statements. For example, the Company is using forward-looking statements in this press release when the Company provides revenue forecasts and describes growth potential for 2018.  Readers are cautioned that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be made in this news release. Factors that may affect the Company's results include, but are not limited to, regulatory approvals, product demand, market acceptance, impact of competitive products and prices, product development, commercialization or technological difficulties, the success or failure of negotiations and trade, legal, social and economic risks, and the risks associated with the adequacy of existing cash resources. Additional factors that could cause or contribute to differences between the Company's actual results and forward-looking statements include, but are not limited to, those risks discussed in the Company's filings with the U.S. Securities and Exchange Commission. Readers are cautioned that actual results (including, without limitation, the timing for and results of the Company's commercial and regulatory plans for Dario™ as described herein) may differ significantly from those set forth in the forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. 

DARIOHEALTH CORP.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except stock and stock data)
				December 31,
				2017		2016
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Trade payables				$         1,852		$         1,812
Other accounts payable and accrued expenses				1,163		1,113
Total current liabilities				3,015		2,925
LIABILITY RELATED TO WARRANTS				1		7,488
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common Stock of $0.0001 par value - Authorized: 160,000,000 shares at December 31, 2017   and 2016; Issued and Outstanding: 14,074,238 and   5,713,383 shares at December 31, 2017 and 2016,   respectively				7		6
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