DarioHealth (DRIO): $28.6 Million Private Placement Closed With Accredited Investors

By Noah Long ● August 2, 2020
  • DarioHealth Corp (NASDAQ: DRIO) — a pioneer in the global digital therapeutics market — announced that it has closed a private placement transaction with accredited investors totaling aggregate gross proceeds of about $28.6 million

DarioHealth Corp (NASDAQ: DRIO) — a pioneer in the global digital therapeutics market — announced that it has closed a private placement transaction with accredited investors, including healthcare funds and institutions from the U.S. and Israel. And the company received aggregate gross proceeds of about $28.6 million before deducting placement agent fees and other offering expenses.

DarioHealth is known as a leading global digital therapeutics company revolutionizing the way people with chronic conditions manage their health. And by delivering evidence-based interventions that are driven by data, high-quality software and coaching, the company empowers individuals to make healthy adjustments to their daily lifestyle choices to improve their overall health.

And DarioHealth’s cross-functional team operates at the intersection of life sciences, behavioral science, and software technology to deliver highly engaging therapeutic interventions. And Dario is one of the highest-rated diabetes solutions in the market. And its user-centric MyDario mobile app is used by tens of thousands of consumers around the globe.

The capital from this financing combined with existing balance sheet cash positions the company in its best financial state since it was founded. And it is expected that these resources will be used to fund Dario’s long-term strategic operating plan as it expands its focus from the direct-to-consumer channel to what it believes is the larger and more lucrative business-to-business-to-consumer channel — which is characterized by lower customer acquisition costs, higher margins, and recurring revenues.

The primary use of proceeds will be to further fund the build out of the company’s commercial infrastructure to assist it in securing contracts with health plans, self-insured employers, and providers. And it will be used to penetrate their vast member, employee, and patient populations.

The company’s largest existing shareholder Nantahala Capital Management, LLC (on behalf of client funds and accounts) was joined by new investors including funds managed by Manchester Management Company LLC, Soleus Capital Management L.P. as well as Israeli institutional investors like Phoenix insurance, Mor provident fund, and Psagot investment house.

The company had sold 2,969,266 shares of common stock and to certain investors in lieu thereof pre-funded warrants to buy 824,689 shares of common stock at an exercise price of $0.0001 per share. And the purchase price per share was equal to $7.47 (or the “Minimum Price,” pursuant to Nasdaq Rule 5635(d) as of July 28, 2020), and the purchase price of each pre-funded warrant was $7.4699. Plus the company also sold 31,486 shares of common stock at a price per share equal to $7.94 (or the “Minimum Price,” pursuant to Nasdaq Rule 5635(d) as of July 30, 2020). The transaction had closed on July 31, 2020.

“We are pleased to have the confidence of our largest shareholder and several new highly regarded healthcare investors as we expand our commercial to manage existing and anticipated near-term agreements with health care payers,” said Erez Raphael, chief executive officer of Dario. “The adoption rate of digital therapeutics has been accelerated by the current pandemic. Dario’s efficacious, value-oriented solution is well-positioned to compete in this largely untapped U.S. market.”

SternAegis Ventures acted as the exclusive placement agent for this offering. And Rosario Capital acted as financial advisor in Israel.