Good morning all,

Yesterday DRIO announced their earnings and while the headline numbers weren't as great as traders hoped for, there were still some major positives to come out.

For example, the Company recorded revenue for the six months ended June 30, 2019 of $3.9 million, a 2% increase from $3.8 million for the six months ended June 30, 2018.

Also, the Company anticipates higher revenues in the second half of 2019 driven by both continued D2C channels and new B2B channel initiatives.

Here are some of the other highlights from their earnings announcement...

• Q2 2019 Revenue of $1.65 million, a 20% decline from Q2 2018
   
• Record 1H 2019 Revenue of $3.89 million, a 2% increase over 1H 2018
   
• Expense shift from D2C to B2B, resulting in a short-term decline in Revenue and an expectation of significant reductions to Net loss in 2H 2019 
   
• Significantly advanced key 2019 initiative to expand growth strategy solely from the direct-to-consumer (D2C) channel to include the more scalable, lucrative business-to-business (B2B) channel
   
• Launched FDA cleared Blood Pressure Monitor and Hypertension management tool; additional functionality expands Dario's product offering, while increasing potential average revenue per user (ARPU) and improving patient care
   
• Presented strong, supportive data at the American Diabetes Association (ADA) Conference in June, highlighting improved in range readings for blood glucose and lowered A1C levels for people with Type 2 Diabetes
   
• Closed a $7.2 million financing with U.S. institutional investors, providing capital for the Company's strategic growth initiatives

CEO, Erez Raphael, stated, "During this quarter, we strengthened our platform technology by expanding its application to hypertensive patients, presenting new significant data for people with diabetes that supports meaningful clinical outcomes and increases the basic functionality through its use on the Android phone in Europe. All of these initiatives created a better technology for a broader patient base who benefit from active management of their chronic diseases.

During this quarter, we witnessed concrete evidence from our pipeline of payers, employers, and providers of their growing demand for value and accountability driven healthcare, enabled by the user-centric and evidence-based solutions that Dario provides.

As our focus shifts to take advantage of these market tailwinds and our business-to-business (B2B) pipeline activity accelerates, we will continue to support our direct-to-consumer (D2C) sales and marketing initiatives but with budgets weighted towards broader B2B business development. The resulting benefits will be measurable in terms of larger patient adoption, more certain revenue streams and lower customer acquisition costs.

While this evolution of our business model may result in reduced near term revenues such as in this quarter, we are confident that in the long term our product and this strategy will maximize its market adoption for patient-centric management of chronic diseases. We believe that the maturity of our B2B pipeline will soon allow us to resume the type of double-digit quarterly growth experienced in the first quarter of this year.

This balancing of resources from D2C to B2B has the additional benefit of a reduction in our burn-rate. As a result, we expect significant reductions in our net quarterly loss in the second half of 2019.

Management's continued acceptance of a portion of its compensation in shares is another ongoing contributor to a reduced cash burn and a reflection of our management's belief in Dario's future.

As we assess the global healthcare market and Dario's place in it, we are more confident than ever that we have built a platform technology which will deliver better care at a lower cost for patients with chronic diseases.

We are excited to share more developments over the remainder of the year as we continue executing our strategic plan, creating value for all stakeholders.

Financial Results for the Three Months Ended June 30, 2019:

Revenue for the second quarter ended June 30, 2019 was $1.65 million, a 20% decrease from $2.06 million in the second quarter ended June 30, 2018.

Revenue for the second quarter of 2019 included D2C sales in the U.S. and Australia, and product sales to distributors in Canada and the United Kingdom. We recorded an increase of $102,000 as deferred revenues from revenues generated from our membership offering to our customers in the U.S.

Gross profit of $326,000 was recorded for the three months ended June 30, 2019, a decrease of 38% or $196,000 compared to gross profit of $522,000 for the three months ended June 30, 2018. This decrease was attributed to lower sales and a one-time expense write-off of our old cartridge production mold for $82,000.

Operating loss for the second quarter of 2019 decreased by $431,000 to $5.36 million, as compared to a $5.8 million operating loss in the second quarter ended June 30, 2018.

Net loss attributable to holders of common stock decreased by $456,000 to $5.4 million in the second quarter of 2019, as compared to $5.8 million in the second quarter of 2018.

As of June 30, 2018, cash and cash equivalents totaled approximately $8 million.

Non-GAAP billings for the three months ended June 30, 2019 were $1.75 million, a 17% decrease from $2.1 million in the three months ended June 30, 2019. A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

Financial Results for the Six Months Ended June 30, 2019:

Revenue for the six months ended June 30, 2019 was $3.9 million, a 2% increase from $3.8 million for the six months ended June 30, 2018. We recorded an additional $662,000 as deferred revenues from revenues generated from our membership offering to our customers in the U.S.

Gross profit of $884,000 was recorded for the six months ended June 30, 2019, a decrease of 18% or $190,000 compared to gross profit of $1,074,000 for the six months ended June 30, 2018. This decrease was affected by a one-time expense write-off of our old cartridge production mold for $82,000.

Operating loss for the six months ended June 30, 2019 increased by $2 million to $10.7 million, compared to an $8.7 million operating loss for the six months ended June 30, 2018.

Net loss was $10.76 million for the six months ended June 30, 2019 compared to a net loss of $8.76 million for the six months ended June 30, 2018. The increase in net loss for the six months ended June 30, 2019 compared to the six months ended June 30, 2018 was mainly due to an increase in operating expenses.

Non-GAAP billings for the six months ended June 30, 2019 were $4.55 million, a 18% increase from $3.86 million in the six months ended June 30, 2019. A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

Financial Guidance

Dario believes its strategy of focusing more resources in the B2B channel, over time, will lead to broader penetration, higher revenues and greater operating leverage of its sophisticated platform technology for managing chronic diseases. While the B2B market involves longer sales cycles, and initially less predictable revenue streams, Dario will be announcing some new relationships in the coming months as evidence of our work that began in the second quarter of this year. As a result, the Company anticipates higher revenues and reduced losses in the second half of 2019 driven by both continued D2C channels and new B2B channel initiatives.

A Company investor presentation is available at: http://mydario.investorroom.com/

You can read the press release in full at https://finance.yahoo.com/news/dariohealth-reports-results-second-quarter-102000842.html

All the best in the markets today.


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Subscribers,

I hope you all had a great weekend. We're back with a new trade idea, this time one that is listed on the NASDAQ. We've had some nice success in recent months with Big Board trade ideas, and we expect this one to be no different.

Get DarioHealth, Corp (DRIO) on your screen right now.

DRIO is trading at just $0.56 having reached a 52 week low of $0.36 in recent weeks. 

We think this recent move higher is sustainable and we could be looking to test recent highs of just over $0.90. 

And DRIO has a 52 week high of $1.38. A move back to these levels could deliver 150%+ gains.



Now could be the perfect time to position yourself after the Company's earnings announcement tomorrow morning at 9am EST. During the call the Company will discuss its second quarter 2019 operating and financial results and its outlook for 2019.

In addition, the Company announced major news today of new clinical data yesterday presented at the American Association of Diabetes Educators ("AADE") conference in Houston, Texas, check it out...

DarioHealth® Clinical Study Data Shows the Dario Membership Program Assists Diabetes Patients in Achieving Pre-Diabetic Blood-Glucose Levels and Consistent In-Range Measurements

Dario Membership users with diabetes achieved a 39% increase of in-range, blood-glucose measurements

45% of the study group reduced their average blood-glucose levels to under 140 mg/dL, in line with a pre-diabetes level

NEW YORK and CAESAREA, Israel, Aug. 12, 2019 /PRNewswire/ -- DarioHealth Corp. (DRIO) ("DarioHealth" or "Dario"), a leading global, digital therapeutics company, presented new clinical data yesterday at the American Association of Diabetes Educators ("AADE") conference in Houston, Texas, which showed remarkable improvements in average blood-glucose levels and in-range measurements in patients with diabetes using Dario's digital therapeutics platform and dedicated one-on-one personal health coaching.

DarioHealth's digital therapeutics platform delivers evidence-based interventions to users that are driven by precision data analytics, high quality software and personalized coaching, which are available through personalized user membership plans. The clinical study data presented at the AADE conference included users enrolled in Dario's full membership plan, which is available to payers, providers and consumers online.

The results of the study suggest that personal health coaching, combined with regular health information captured on the Dario app, such as blood-glucose levels, food and exercise, can significantly assist diabetes patients in managing and improving their chronic condition and potentially lower their blood-glucose levels to be in line with the American Diabetes Association (ADA) suggested A1c goals of 6.5% (equivalent to 140 mg/dL blood-glucose average) for certain diabetic patients.

The Dario study was based on the analysis of clinical data of 162 Dario users. In order to establish a baseline blood-glucose level prior to commencement of the study, the Dario users study group consistently measured their blood-glucose levels one month prior to starting the Dario personal coaching program. Once the study began, these users received regular digital monitoring of their blood-glucose levels throughout the day, and direct personal coaching support from a Dario health coach for three months, while measuring their blood-glucose levels more than 30 times per month, on average, throughout the study.

The clinical outcomes observed showed that Dario's blood-glucose monitoring system, coupled with personal Dario coaching, successfully assisted a large percentage of users in managing their blood-glucose levels to be in line with what would be considered pre-diabetes levels:

• 45% (73 out of 162) of the study group reduced their average blood-glucose levels to under 140 mg/dL, which is considered a pre-diabetic measurement according to ADA guidelines;
• All study users (162 cohort) reduced their average blood-glucose levels by 6% (155±42.1 mg/dL) while participating in the three-month study (compared to a baseline level of 165±48.7 mg/dL);
• Additionally, a subgroup of 101 users of the 162 cohort began the study with average blood-glucose levels that exceeded 140 mg/dL and experienced a 39% increase of in-range blood-glucose measurements versus the study baseline, and an 11% reduction in average blood-glucose levels (171±38.0 mg/dL) after three months (versus the study baseline level of 191±43.5 mg/dL).

Olivier Jarry, President and Chief Commercial Officer at DarioHealth, commented on the study saying, "It is a great honor to present the results of this study at the AADE conference, which shows that personalized coaching, combined with consistent digital monitoring of blood glucose and other health and lifestyle parameters, leads to increased user engagement and better health outcomes for individuals with diabetes."

"At DarioHealth, it is our objective to set the clinical data standards in the digital therapeutics industry to help users achieve meaningful outcomes and improved self-management. We believe that the results of this study provide further evidence of the real value that our program delivers to our users," said Erez Raphael, Chief Executive Officer of DarioHealth.

"These study results further prove that Dario's diabetes solutions can assist users in modifying their behavior to achieve improved glycemic levels. A blood-glucose level of less than 140mg/dL is an important threshold for a diabetes patient, as the ADA suggests stringent A1c goals of 6.5% (equivalent to 140 mg/dL) for certain diabetic patients, if such levels can be achieved without significant hypoglycemia. Moreover, retaining blood glucose at targeted ADA levels helps people with diabetes avoid serious complications from their health condition," said Mr. Raphael.

Dario offers a digital blood-glucose monitoring system accessible through its mobile phone app; modules to regularly monitor medication, weight, blood pressure, food and exercise; weekly progress reports; personalized coaching guidance for individual users; feedback alerts; relevant content delivery and follow-up with dedicated professionals via in-app chats features, emails and calls. The results of the study show that combining digital and human coaching can be an effective tool in promoting user self-care, which is a central goal of Dario. The system helps users understand their real-time clinical status, the cause and effect of different behaviors and how to best manage better their condition and improve their clinical outcomes.

Read in full at https://finance.yahoo.com/news/dariohealth-clinical-study-data-shows-123000870.html

About DRIO...


DarioHealth Corp. (NASDAQ: DRIO) is a leading Global Digital Therapeutics (DTx) company revolutionizing the way people manage their health across the chronic condition spectrum.

By delivering evidence-based interventions that are driven by precision data analytics, high quality software, and personalized coaching, DarioHealth have developed a novel approach that empowers individuals to adjust their lifestyle in a unique and holistic way.

DarioHealth's cross functional team operates at the intersection of life science, behavioral science, and software technology to deliver seamlessly integrated and highly engaging therapeutic interventions. Already one of the highest rated diabetes solutions, its user-centric approach is loved by tens of thousands of customers around the globe.

DarioHealth is rapidly expanding solutions for additional chronic conditions such as hypertension and moving into new geographic markets, using a performance-based approach to improve the health of users managing chronic disease.

To learn more about DarioHealth and its digital health solutions via the Dario mobile app, please go to https://www.dariohealth.com/


Recently, DRIO announced major news that they have introduced a new digital monitoring solution on its Dario app platform that will allow patients to monitor their blood pressure throughout the day, in addition to their blood glucose levels, check it out...

DarioHealth Launches New Blood Pressure Monitoring System

New offering enables users to integrate blood pressure readings into the Dario mobile app to gain better understanding and control of overall health.

NEW YORK and CAESAREA, Israel, July 30, 2019 /PRNewswire/ -- DarioHealth Corp. (DRIO), ("DarioHealth" or "Dario"), a leading global, digital therapeutics company, announced today the addition of a new digital monitoring solution on its Dario app platform that will allow patients to monitor their blood pressure throughout the day, in addition to their blood glucose levels. The Dario Blood Pressure Monitoring System assists patients with hypertension and is a critical part of DarioHealth's strategy to go beyond diabetes to reach patients with a variety of chronic conditions.

The Dario Blood Pressure Monitoring System is a medical device composed of a digital monitor and a blood pressure cuff, that synchronizes with the Dario mobile app which allows users to track their blood pressure and a variety of health markers, along with the daily actions that influence them. Combining the Dario Blood Pressure Monitoring System, with the Dario Blood Glucose Monitoring System, creates a harmonized digital health solution, enabling users to better monitor their health and make data driven choices. Together with Dario's software and professional coaching, we believe that users with hypertension and diabetes will benefit from a clear broad picture of their condition in a user-friendly format on their iPhone or Android mobile device.

"Our digital diabetes management solution has proven to be a valuable daily companion to those suffering from this chronic condition and is able to meet their needs and expectations. We have further expanded our offering to address the needs of those with hypertension, providing a sophisticated solution to millions affected by this condition" commented Erez Raphael, Chief Executive Officer of DarioHealth.

Today, 75 million American have High blood pressure[1] including 73.6% of adults with diabetes² . By offering a fast, easy way to monitor these two strongly correlated chronic conditions, Dario aims to help more people live healthier lives. Dario also provides healthcare professionals with access to the accumulated information and enables them to adjust their interventions and evaluate their clinical effectiveness based on hard data.

Like the Dario Blood Glucose Monitoring System, the Dario Blood Pressure Monitoring System is FDA-cleared.

The Dario Blood Pressure Monitoring System will be offered as a companion system where the Dario Blood Glucose Monitoring System is available, online and via Dario distributors.

Read in full at https://finance.yahoo.com/news/dariohealth-launches-blood-pressure-monitoring-114700894.html


We think DRIO could make an excellent trade idea at current levels. The Company is set to announce earnings in the morning which could make this trade volatile, but could also deliver some major upside.

DRIO has pulled back a lot from its recent highs of over $0.90, but now the low is in and the bounce is on. And with 52 week highs of $1.38, there is a ton of upside potential.

And with a large short interest in DRIO, a positive earnings call could cause a major squeeze higher.

Get DRIO on your radar and be ready for an exciting day ahead.

All the best.

SmallCapMomo.com

picks@smallcapmomo.com

Remember our key trading rules when trading. Capital preservation is key. Keep your stops tight, and if things don't go your way, cut your losses and look for another opportunity.