# EDGAR Filing Document

**Accession Number:** 0001533998
**File Stem:** 0001558370-25-011130
**Filing Date:** 2025-8
**Character Count:** 187466
**Document Hash:** 65b4dcc0c4046404d1f7dff1d424aee7
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001558370-25-011130.hdr.sgml**: 20250812

**ACCESSION NUMBER**: 0001558370-25-011130

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 90

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250812

**DATE AS OF CHANGE**: 20250812

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** DarioHealth Corp.
- **CENTRAL INDEX KEY:** 0001533998
- **STANDARD INDUSTRIAL CLASSIFICATION:** SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 452973162
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-37704
- **FILM NUMBER:** 251203905

**BUSINESS ADDRESS:**
- **STREET 1:** 322 W 57TH ST. #33B
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10019
- **BUSINESS PHONE:** 972-4-770-6377

**MAIL ADDRESS:**
- **STREET 1:** 322 W 57TH ST. #33B
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10019

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LabStyle Innovations Corp.
- **DATE OF NAME CHANGE:** 20111101

?xml version='1.0' encoding='ASCII'? DarioHealth Corp._June 30, 2025

[**Table of Contents**](#TOC)

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

(Mark One)

---

| | |
|:---|:---|
| **☒** | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|  | **For the quarterly period ended June 30, 2025** |
| **☐** | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|  | **For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to** |

---

**Commission File No. 001-37704**

---

| |
|:---|
| **DarioHealth Corp.** |
| (Exact name of registrant as specified in its charter) |

---

---

| | |
|:---|:---|
| **Delaware** | **45-2973162** |
| (State or other jurisdiction of<br>incorporation or organization) | (I.R.S. Employer Identification No.) |

---

---

| | |
|:---|:---|
| **322 W. 57th St. #33B** |  |
| **New York, New York** | **10019** |
| (Address of Principal Executive Offices) | (Zip Code) |

---

---

| |
|:---|
| **(972)-4** **770** **-4042** |
| (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** |
| Common Stock, par value $0.0001 per share | DRIO | The Nasdaq Capital Market LLC |

---

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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 <br> ☒ Non-accelerated filer ☒ Smaller reporting company <br> ☐ 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 ☐ No ☒

As of August 10, 2025, the registrant had 45,496,954 shares of common stock outstanding.

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 company, Twill, Inc., a Delaware company, Twill ISR Ltd, an Israeli company, and DarioHealth Services Pvt. Ltd., an Indian company. "Dario" is registered as a trademark in the United States, Israel, China, Canada, Hong Kong, South Africa, Japan, Costa Rica, and Panama. "DarioHealth" is registered as a trademark in the United States and Israel.

------

[**Table of Contents**](#TOC)

#### DarioHealth Corp.

#### Quarterly Report on Form 10-Q

#### **TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| | | **Page** |
| [Cautionary Note Regarding Forward-Looking Statements](#CAUTIONARYNOTEREGARDINGFORWARDLOOKINGSTA) | [Cautionary Note Regarding Forward-Looking Statements](#CAUTIONARYNOTEREGARDINGFORWARDLOOKINGSTA) | 3 |
| [**PART 1 - FINANCIAL INFORMATION**](#INTERIMCONSOLIDATEDFINANCIALSTATEMENTS_6) | [**PART 1 - FINANCIAL INFORMATION**](#INTERIMCONSOLIDATEDFINANCIALSTATEMENTS_6) |  |
| &nbsp;&nbsp;[Item 1.](#INTERIMCONSOLIDATEDFINANCIALSTATEMENTS_6) | [Condensed Consolidated Interim Financial Statements (unaudited)](#INTERIMCONSOLIDATEDFINANCIALSTATEMENTS_6) | F-1 |
|  | [Condensed Consolidated Interim Balance Sheets (Unaudited)](#CONSOLIDATEDBALANCESHEETS_768529) | F-2 – F-3 |
|  | [Condensed Consolidated Interim Statements of Comprehensive Loss (Unaudited)](#CONSOLIDATEDSTATEMENTSOFCOMPREHENSIVELOS) | F-4 |
|  | [Condensed Consolidated Interim Statements of Changes in Stockholders' Equity (Unaudited)](#stockholders_equity) | F- 5 – F-6 |
|  | [Condensed Consolidated Interim Statements of Cash Flows (Unaudited)](#CONSOLIDATEDINTERIMSTATEMENTOFCASHFLOW) | F-7  |
|  | [Notes to Condensed Consolidated Interim Financial Statements](#NOTE1GENERAL_494608) | F-8 – F-34  |
| &nbsp;&nbsp;[Item 2.](#Item2ManagementsDiscussionandAnalysisofF) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#Item2ManagementsDiscussionandAnalysisofF) | 4 |
| &nbsp;&nbsp;[Item 4.](#Item4ControlsandProcedures_710243) | [Control and Procedures](#Item4ControlsandProcedures_710243) | 15 |
| [**PART II - OTHER INFORMATION**](#PARTIIOTHERINFORMATION_693715) | [**PART II - OTHER INFORMATION**](#PARTIIOTHERINFORMATION_693715) | 17 |
| &nbsp;&nbsp;[Item 1A.](#Item1ARiskFactors_910915) | [Risk Factors](#Item1ARiskFactors_910915) | 17 |
| &nbsp;&nbsp;[Item 2.](#Unregistered_Sales_of_Equity_Securities) | [Unregistered Sales of Equity Securities and Use of Proceeds](#Unregistered_Sales_of_Equity_Securities) | 21 |
| &nbsp;&nbsp;[Item 5.](#Item5OtherInformation_865291) | [Other Information.](#Item5OtherInformation_865291) | 21 |
| &nbsp;&nbsp;[Item 6.](#Item6Exhibits_540964) | [Exhibits](#Item6Exhibits_540964) | 22 |
| [**SIGNATURES**](#SIGNATURES_648939) | [**SIGNATURES**](#SIGNATURES_648939) | 23 |

---

[**Table of Contents**](#TOC)

#### 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 complete required clinical trials of our product and obtain clearance or approval from the United States Food and Drug Administration (the "FDA"), or other regulatory agencies in different jurisdictions;

● 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;

● that our financial position raises substantial doubt about our ability to continue as a going concern;

● 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 passages 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, 2024 (filed on March 10, 2025) 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.

[**Table of Contents**](#TOC)

#### DARIOHEALTH CORP. AND ITS SUBSIDIARIES

#### CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

#### JUNE 30, 2025

#### UNAUDITED

#### INDEX

---

| | |
|:---|:---|
|  | **Page** |
| [**Condensed Consolidated Interim Balance Sheets**](#CONSOLIDATEDBALANCESHEETS_768529) | **F-2 – F-3** |
| [**Condensed Consolidated Interim Statements of Comprehensive Loss**](#CONSOLIDATEDSTATEMENTSOFCOMPREHENSIVELOS) | **F-4** |
| [**Condensed Consolidated Interim Statements of Changes in Stockholders' Equity**](#STATEMENTSOFCHANGESINSTOCKHOLDERSEQUITY_) | **F-5 – F-6** |
| [**Condensed Consolidated Interim Statements of Cash Flows**](#CONSOLIDATEDINTERIMSTATEMENTOFCASHFLOW) | **F-7**  |
| [**Notes to Condensed Consolidated Interim Financial Statements**](#NOTE1GENERAL_494608) | **F-8 – F-34** |

---

[**Table of Contents**](#TOC)

#### DARIOHEALTH CORP. AND ITS SUBSIDIARIES
**CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED)**

**U.S. dollars in thousands**

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| ASSETS |  |  |
| CURRENT ASSETS: |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $21954 | $27764 |
| &nbsp;&nbsp;Short-term bank deposits | - | 697 |
| &nbsp;&nbsp;Short-term restricted bank deposits | 218 | 175 |
| &nbsp;&nbsp;Trade receivables, net | 2556 | 4804 |
| &nbsp;&nbsp;Inventories | 4609 | 4753 |
| &nbsp;&nbsp;Other accounts receivable and prepaid expenses | 2833 | 2336 |
| Total current assets | 32170 | 40529 |
| NON-CURRENT ASSETS: |  |  |
| &nbsp;&nbsp;Deposits  | 79 | 79 |
| &nbsp;&nbsp;Operating lease right of use assets | 861 | 1065 |
| &nbsp;&nbsp;Long-term assets | 300 | 313 |
| &nbsp;&nbsp;Property and equipment, net | 610 | 709 |
| &nbsp;&nbsp;Intangible assets, net | 16878 | 18762 |
| &nbsp;&nbsp;Goodwill | 57427 | 57427 |
| Total non-current assets | 76155 | 78355 |
| Total assets | $108325 | $118884 |

---

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

[**Table of Contents**](#TOC)

**CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |
| CURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;Trade payables | $3379 | $3045 |
| &nbsp;&nbsp;Deferred revenues | 727 | 1583 |
| &nbsp;&nbsp;Operating lease liabilities | 510 | 504 |
| &nbsp;&nbsp;Other accounts payable and accrued expenses | 5138 | 6052 |
| &nbsp;&nbsp;Current maturity of long-term loan |  | 5451 |
| Total current liabilities | 9754 | 16635 |
| NON-CURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;Operating lease liabilities  | 612 | 765 |
| &nbsp;&nbsp;Long-term loan | 30499 | 23472 |
| &nbsp;&nbsp;Warrant liability | 3393 | 5968 |
| &nbsp;&nbsp;Other long-term liabilities | 81 | 25 |
| Total non-current liabilities | 34585 | 30230 |
| STOCKHOLDERS' EQUITY |  |  |
| &nbsp;&nbsp;Common stock of $0.0001 par value - authorized: 160,000,000 shares; issued and outstanding: 45,474,935 and 38,388,431 shares on June 30, 2025 and December 31, 2024, respectively  | 4 | 4 |
| &nbsp;&nbsp;Preferred stock of $0.0001 par value - authorized: 5,000,000 shares; issued and outstanding: 53,440 and 49,585 shares on June 30, 2025 and December 31, 2024, respectively | \*) - | \*) - |
| &nbsp;&nbsp;Additional paid-in capital | 486953 | 462358 |
| &nbsp;&nbsp;Accumulated deficit | (422971) | (390343) |
| Total stockholders' equity | 63986 | 72019 |
| Total liabilities and stockholders' equity | $108325 | $118884 |

---

\*) Represents an amount lower than $1.

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

[**Table of Contents**](#TOC)

**CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**  | **Three months ended**  | **Six months ended**  | **Six months ended**  |
|  | **June 30,**  | **June 30,**  | **June 30,**  | **June 30,**  |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenues: |  |  |  |  |
| &nbsp;&nbsp;Services | $3661 | $4660 | $8536 | $8820 |
| &nbsp;&nbsp;Consumer hardware | 1708 | 1595 | 3585 | 3193 |
| Total revenues | 5369 | 6255 | 12121 | 12013 |
| Cost of revenues: |  |  |  |  |
| &nbsp;&nbsp;Services | 821 | 960 | 1686 | 1925 |
| &nbsp;&nbsp;Consumer hardware | 1151 | 1306 | 2281 | 2504 |
| &nbsp;&nbsp;Amortization of acquired intangible assets | 433 | 1233 | 1308 | 2396 |
| Total cost of revenues | 2405 | 3499 | 5275 | 6825 |
| Gross profit | 2964 | 2756 | 6846 | 5188 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;Research and development | $3721 | $6810 | $7829 | $13452 |
| &nbsp;&nbsp;Sales and marketing | 5231 | 7132 | 11104 | 14042 |
| &nbsp;&nbsp;General and administrative | 3212 | 5005 | 6522 | 11740 |
| Total operating expenses | 12164 | 18947 | 25455 | 39234 |
| Operating loss | 9200 | 16191 | 18609 | 34046 |
| Total financial expenses (income), net | 3790 | (2581) | 3586 | (11267) |
| Loss before taxes | 12990 | 13610 | 22195 | 22779 |
| Income tax (benefit) |  |  | 22 | (1994) |
| &nbsp;&nbsp;Net loss | $12990 | $13610 | $22217 | $20785 |
| &nbsp;&nbsp;Deemed dividend (contribution) | $5572 | $(8706) | $10411 | $(6672) |
| &nbsp;&nbsp;Net loss attributable to common shareholders  | $18562 | $4904 | $32628 | $14113 |
| Net loss per share: |  |  |  |  |
| &nbsp;&nbsp;Basic and diluted loss per share of common stock | $0.18 | $0.08 | $0.33 | $0.27 |
| &nbsp;&nbsp;Weighted average number of common stock used in computing basic and diluted net loss per share | 49630949 | 39830793 | 48500775 | 37778087 |

---

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

[**Table of Contents**](#TOC)

#### CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
**(UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Preferred Stock** | **Preferred Stock** | | | |
| **Three Months Ended June 30, 2025** | **Number** | **Amount** | **Number** | **Amount** | **Additional**<br>**paid-in**<br>**capital** | <br>**Accumulated**<br>**deficit** | **Total**<br>**stockholders'**<br>**equity** |
| Balance as of March 31, 2025 | 42706594 | $4 | 54585 | $\*)- | $478104 | $(404409) | $73699 |
| Modification of preferred stock |  |  |  |  | 1604 | (1604) |  |
| Deemed dividend related to issuance of preferred stock |  |  |  |  | 3968 | (3968) |  |
| Conversion of Preferred Stock to Common Stock | 812627 | \*)- | (1145) | \*)- |  |  | \*)- |
| Stock-based compensation | 1955714 | \*)- |  |  | 2035 |  | 2035 |
| Issuance of warrants in connection with Callodine loan facility, net of issuance cost |  | - |  |  | 1140 |  | 1140 |
| Modification of Avenue warrants |  |  |  |  | 102 |  | 102 |
| Net loss |  |  |  |  |  | (12990) | (12990) |
| Balance as of June 30, 2025 | 45474935 | $4 | 53440 | $\*)- | $486953 | $(422971) | $63986 |
|  |  |  |  |  | **Additional** |  | **Total** |
|  | **Common Stock** | **Common Stock** | **Preferred Stock** | **Preferred Stock** | **paid-in** | **Accumulated** | **stockholders'** |
| **Six Months Ended June 30, 2025** | **Number** | **Amount** | **Number** | **Amount** | **capital** | **deficit** | **equity** |
| Balance as of December 31, 2024 | 38388431 | $4 | 49585 | $\*)- | $462358 | $(390343) | $72019 |
| Conversion of Preferred Stock to Common Stock | 1668033 | \*)- | (2945) | \*)- | \*)- |  | \*)- |
| Modification of preferred stock |  |  |  |  | 1604 | (1604) |  |
| Deemed dividend related to issuance of preferred stock |  |  |  |  | 8807 | (8807) |  |
| Stock-based compensation | 2558796 | \*)- |  |  | 4377 |  | 4377 |
| Exercise of Prefunded warrants to common stock | 2859675 | \*)- |  |  | 1750 |  | 1750 |
| Issuance of preferred stock, net of issuance cost |  |  | 6800 | \*)- | 6815 |  | 6815 |
| Issuance of warrants in connection with Callodine loan facility, net of issuance cost |  |  |  |  | 1140 |  | 1140 |
| Modification of Avenue warrants |  | \*)- |  |  | 102 |  | 102 |
| Net loss |  |  |  |  |  | (22217) | (22217) |
| Balance as of June 30, 2025 | 45474935 | $4 | 53440 | $\*)- | $486953 | $(422971) | $63986 |

---

\*) Represents an amount lower than $1.

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

[**Table of Contents**](#TOC)

#### 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)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Preferred Stock** | **Preferred Stock** | | | |
| **Three Months Ended June 30, 2024** | **Number** | **Amount** | **Number** | **Amount** | **Additional**<br>**paid-in**<br>**capital** | <br>**Accumulated**<br>**deficit** | **Total**<br>**stockholders'**<br>**equity** |
| Balance as of March 31, 2024 | 29439740 | $3 | 41381 | $\*)- | $436600 | $(358570) | $78033 |
| Exercise of options | 4688 | \*)- |  |  | \*)- |  | \*)- |
| Extinguishment of preferred stock in connection with preferred stock modification |  |  |  |  | (11786) | 11786 |  |
| Deemed dividend related to issuance of preferred stock |  |  |  |  | 3080 | (3080) |  |
| Issuance of warrants to service providers |  |  |  |  | 2001 |  | 2001 |
| Conversion of preferred stock to common stock | 376810 | \*)- | (1050) | \*)- |  |  | \*)- |
| Stock-based compensation | 203037 | \*)- |  |  | 1561 |  | 1561 |
| Modification of Avenue warrants |  | \*)- |  |  | 70 |  | 70 |
| Net loss |  |  |  |  |  | (13610) | (13610) |
| Balance as of June 30, 2024 | 30024275 | $3 | 40331 | $\*)- | $431526 | $(363474) | $68055 |
|  |  |  |  |  | **Additional** |  | **Total** |
|  | **Common Stock** | **Common Stock** | **Preferred Stock** | **Preferred Stock** | **paid-in** | **Accumulated** | **stockholders'** |
| **Six Months Ended June 30, 2024** | **Number** | **Amount** | **Number** | **Amount** | **capital** | **deficit** | **equity** |
| Balance as of December 31, 2023 | 27191849 | $3 | 18959 | $\*)- | $407502 | $(349361) | $58144 |
| Exercise of options | 6709 | \*)- |  |  | \*)- |  | \*)- |
| Extinguishment of preferred stock in connection with preferred stock modification |  |  |  |  | (11786) | 11786 |  |
| Deemed dividend related to issuance of preferred stock |  |  |  |  | 5114 | (5114) |  |
| Issuance of warrants to service providers |  |  |  |  | 2028 |  | 2028 |
| Stock-based compensation | 2048907 | \*)- |  |  | 8392 |  | 8392 |
| Conversion of preferred stock to common stock | 776810 | \*)- | (1050) | \*)- |  |  | \*)- |
| Issuance of preferred stock, net of issuance cost |  |  | 22422 | \*)- | 20206 |  | 20206 |
| Modification of Avenue warrants |  | \*)- |  |  | 70 |  | 70 |
| Net loss |  |  |  |  |  | (20785) | (20785) |
| Balance as of June 30, 2024 | 30024275 | $3 | 40331 | $\*)- | $431526 | $(363474) | $68055 |

---

[**Table of Contents**](#TOC)

#### DARIOHEALTH CORP. AND ITS SUBSIDIARIES
**CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED)**

**U.S. dollars in thousands**

---

| | | |
|:---|:---|:---|
|  | **Six months ended**  | **Six months ended**  |
|  | **June 30,**  | **June 30,**  |
|  | **2025** | **2024** |
| Cash flows from operating activities: |  |  |
| Net loss | $(22217) | $(20785) |
| &nbsp;&nbsp;Adjustments required to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 4377 | 10420 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and impairment  | 174 | 648 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in operating lease right of use assets | 204 | 425 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of acquired intangible assets | 1884 | 2516 |
| &nbsp;&nbsp;&nbsp;&nbsp;Decrease (increase) in trade receivables, net | 2248 | (247) |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in other accounts receivable, prepaid expense and long-term assets  | (484) | (1171) |
| &nbsp;&nbsp;&nbsp;&nbsp;Decrease (increase) in inventories | 143 | (71) |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in trade payables | 334 | (190) |
| &nbsp;&nbsp;&nbsp;&nbsp;Decrease in other accounts payable and accrued expenses | (858) | (3034) |
| &nbsp;&nbsp;&nbsp;&nbsp;Decrease in deferred revenues | (856) | (224) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in operating lease liabilities | (147) | (417) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant liability | (825) | (12643) |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash financial expenses | 2665 | 204 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 654 | 96 |
| Net cash used in operating activities | (12704) | (24473) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment | (75) | (85) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments for business acquisitions, net of cash acquired |  | (8796) |
| Net cash used in investing activities | (75) | (8881) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of preferred stock, net of issuance costs | 6754 | 20206 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from borrowings on credit agreement, net | 31700 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment of long-term loan | (31515) |  |
| Net cash provided by financing activities | 6939 | 20206 |
| Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | (5840) | (13148) |
| &nbsp;&nbsp;Effect of exchange rate differences on cash, cash equivalents and restricted cash and cash equivalents | 30 | (48) |
| &nbsp;&nbsp;Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 27764 | 36797 |
| &nbsp;&nbsp;Cash, cash equivalents and restricted cash and cash equivalents at end of period | $21954 | $23601 |
| Supplemental disclosure of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid during the period for interest on long-term loan | $1250 | $1972 |
| Non-cash activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets obtained in exchange for lease liabilities | $— | $428 |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercise of pre-funded warrants to common stock upon acquisition | $1750 | $— |

---

The accompanying notes are an integral part of the unaudited condensed consolidated interim financial statements.

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**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

#### NOTE 1: - GENERAL
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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 one reporting unit and one operating segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. On February 15, 2024, the Company acquired Twill, Inc. ("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(tm): 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. The Company also has, through its wholly owned subsidiary, PsyInnovations Inc., a company located in India, DarioHealth Services, which serves as the Company's primary research and development center. DarioHealth Services is engaged in software development and other R&D activities in support of the Company's operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. The Company has incurred net losses since its inception. As of June 30, 202 5 , the Company has incurred recurring losses and negative cash flows since inception and has an accumulated deficit of $422,971 . For the six months ended June 30, 2025, the Company used approximately $12,704 of cash in operations. The Company expects to incur future net losses and our transition to profitability is dependent upon, among other things, the successful development and commercialization of the Company's products and the achievement of a level of revenues adequate to support the cost structure. Until the Company achieves profitability or generates positive cash flows, it will continue to be dependent on raising additional funds to fund its operations. There are no assurances, however, that the Company will be able to obtain an adequate level of financial resources that are required for the long-term development and commercialization of its product offerings.

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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 (Cont.)
These conditions raise substantial doubt about the Company's ability to continue as a going concern for twelve months from the date of issuance of these interim condensed consolidated financial statements. The accompanying condensed interim consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

#### NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES
***Basis of Presentation***

The accompanying unaudited interim condensed consolidated financial statements as of June 30, 2025, 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 June 30, 2025, and the Company's consolidated results of operations and cash flows for the six months ended June 30, 2025. Results for the six months ended June 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. 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, 2024.

***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***

&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;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, 2024 are applied consistently in these unaudited interim consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;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.

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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.)**

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**<br>**beginning of period** | <br>**Additions** | <br>**Deduction** | **Balance at**<br>**end of period** |
| Three months ended June 30, 2025 |  |  |  |  |
| Allowance for credit losses | $191 | $— | $(35) | $156 |
| Three months ended June 30, 2024 |  |  |  |  |
| Allowance for credit losses | $273 | $10 | $(69) | $214 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Balance at**<br>**beginning of period** | <br>**Additions** | <br>**Deduction** | **Balance at**<br>**end of period** |
| Six months ended June 30, 2025 |  |  |  |  |
| Allowance for credit losses | $169 | $28 | $(41) | $156 |
| Six months ended June 30, 2024 |  |  |  |  |
| Allowance for credit losses | $163 | $120 | $(69) | $214 |

---

The Company has no off-balance-sheet concentration of credit risk.

As of June 30, 2025, and December 31, 2024, the Company's major customer accounted for 16.4% and 41.6%, respectively, of the Company's accounts receivable balance. For the three and six months ended June 30, 2025, the Company's major customer accounted for 9.3% and 10.6%, respectively, of the Company's revenue in the period. For the three and six months ended June 30, 2024, the Company's major customers accounted for 30.4% and 23.7%, respectively, of the Company's revenue in the period.

&nbsp;&nbsp;&nbsp;&nbsp;c. Short-term restricted bank deposits:

The following table provides a reconciliation of the cash balances reported on the balance sheets and the cash, cash equivalents, and short-term restricted bank deposits balances reported in the statements of cash flows:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **June 30,** <br>**2024** |
| Cash, and cash equivalents as reported on the balance sheets | $21954 | $22938 |
| Short-term bank deposits |  | 663 |
| Cash, restricted cash, cash equivalents, and restricted cash and cash equivalents as reported in the statements of cash flows | $21954 | $23601 |

---

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**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.)**

&nbsp;&nbsp;&nbsp;&nbsp;d. Recently issued Accounting Pronouncements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2024. Early adoption is permitted, with an option to apply the standard retrospectively. The Company is currently evaluating the effect of adopting the ASU on its disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In November 2024, the FASB issued 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 the ASU on its disclosures.

#### NOTE 3: - INVENTORIES

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| Raw materials | $850 | $563 |
| Finished products | 3759 | 4190 |
|  | $4609 | $4753 |

---

During the three and six months periods ended June 30, 2025, total inventory write-down expenses amounted to $38 and $212, respectively, and $101 for the three and six months ended June 30, 2024.

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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 – ACQUISITIONS**

The interim consolidated statement of comprehensive loss includes the following revenue and net loss attributable to Twill for the three and six months ended June 30, 2024:

---

| | | |
|:---|:---|:---|
|  | **Three**<br>**months ended**  | **Six**<br>**months ended**  |
|  | **June 30, 2024** | **June 30, 2024** |
| Revenues | $3611 | $5538 |
| Net loss | $2839 | $2915 |

---

Supplemental Unaudited Pro forma Information

The following table sets forth a summary of the unaudited pro forma results of the Company as if the acquisition of Twill, which closed on February 15, 2024, had taken place had Twill been acquired as of January 1, 2024.

---

| | |
|:---|:---|
|  | **Six**<br>**months ended**  |
|  | **June 30, 2024** |
| Total revenues | $13976 |
| Net loss | $26659 |

---

**&nbsp;&nbsp;&nbsp;&nbsp;**<br>

The unaudited pro forma financial information presented is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the Twill acquisition was completed at the beginning of 2024 and are not indicative of the future operating results of the combined company. The pro forma results include adjustments related primarily to purchase accounting, and amortization of acquisition-related intangible assets. The pro forma results also include income from revaluation of the pre-funded warrants issued as part of the consideration for the acquisition of Twill, as these warrants are classified as a liability under U.S. GAAP.

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**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

#### NOTE 5: - 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"). The Company also generates revenue directly from individuals through a la carte offering and membership plans.

*Revenue Source*

The following tables represent the Company's total revenues for the three and six month periods ended June 30, 2025 and June 30, 2024 disaggregated by revenue source:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**  | **Three months ended**  | **Six months ended**  | **Six months ended**  |
|  | **June 30,**  | **June 30,**  | **June 30,**  | **June 30,**  |
|  | **2025** | **2024** | **2025** | **2024** |
| Commercial - Business-to-Business-to-Consumer ("B2B2C") | $3535 | $5543 | $8272 | $9013 |
| Commercial - Strategic partnerships |  | (1088) |  | (599) |
| Consumers | 1834 | 1800 | 3849 | 3599 |
|  | $5369 | $6255 | $12121 | $12013 |

---

*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 $727 over the next 12 months and the remainder thereafter.

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 six months ended June 30, 2025:

---

| | |
|:---|:---|
| Balance, beginning of the period | $1583 |
| New performance obligations | 1858 |
| Reclassification to revenue as a result of satisfying performance obligations | (2675) |
| Balance, end of the period | $766 |

---

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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: - 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 June 30, 2025 and December 31, 2024, consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| Costs to fulfill a contract, current | $285 | $259 |
| Costs to fulfill a contract, noncurrent | 136 | 65 |
| Total costs to fulfill a contract | $421 | $324 |

---

Costs to fulfill a contract were as follows:

---

| | |
|:---|:---|
|  | **Costs to** <br>**fulfill a contract** |
| Beginning balance as of December 31, 2024 | $324 |
| Additions | 299 |
| Cost of revenue recognized | (202) |
| Ending balance as of June 30, 2025 | 421 |

---

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**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

**NOTE 6: - DEBT**

*Loan Facility*

On May 1, 2023, the Company refinanced its former $25,000 credit facility with a new $30,000 credit facility in the Loan and Security Agreement, and Supplement thereto (the "LSA" or the "Avenue Loan Facility") by and between the Company and its subsidiary PsyInnovations Inc., collectively as the borrowers (the "Borrowers") and Avenue Venture Opportunities Fund II, L.P. and Avenue Venture Opportunities Fund, L.P., collectively as the lenders (the "Avenue Lenders"). The LSA provides for a four-year secured credit facility in an aggregate principal amount of up to $40,000, of which $30,000 was made available on the closing date (the "Initial Tranche") and up to $10,000 (the "Discretionary Tranche") may be made available on the later of July 1, 2023, or the date the Avenue Lenders approve the issuance of the Discretionary Tranche. On May 1, 2023, the Borrowers closed on the Initial Tranche, less certain fees and expenses payable to or on behalf of the Avenue Lenders.

During the term of the Avenue Loan Facility, interest payable in cash by the Borrowers shall accrue on any outstanding balance due under the Avenue Loan Facility at a rate per annum equal to the higher of (x) the sum of four one-half percent (4.50%) plus the prime rate as published in the Wall Street Journal and (y) twelve and one-half percent (12.50%). During an event of default, any outstanding amount under the Avenue Loan Facility will bear interest at a rate of 5.00% in excess of the otherwise applicable rate of interest and the outstanding balance shall be due and payable. As part of the LSA, the Company issued a warrant (the "Warrant") to purchase up to 584,882 shares of the Company's Common Stock, at an exercise price of $3.334 per share, which has a term of five years from the issuance date.

On February 15, 2024, the Company and the Borrowers entered into the First Amendment to Loan and Security Agreement and Supplement (the "Avenue Amendment") with the Avenue Lenders. Pursuant to the Avenue Amendment, the parties agreed to include the Merger Sub and Twill as parties to the Company's existing loan facility with the lenders. In addition, the Avenue Amendment permits the lenders, subject to Nasdaq rules, to convert up to $2,000 of the principal amount of its loan to the Company at a fixed conversion price of $4.001 per share.

On June 25, 2024, the Company stockholders approved the Avenue Amendment and repriced the Warrant to purchase up to 584,882 shares of Common Stock issued to the lenders on May 1, 2023 at an exercise price $3.334 per share, to permit an amendment to the exercise price of such Warrants to $2.02 which is the "minimum price" as defined by Nasdaq rules as of the closing of the Twill Agreement and (ii) permit the lenders, subject to Nasdaq rules, to convert up to $2,000 of the principal amount of the outstanding Avenue Loan Facility into Borrower's unrestricted shares of the Company's Common Stock at a conversion price of $4.001.

Pursuant to the LSA and the Avenue Amendment, the Company was obligated to maintain at least $5,000 of unrestricted cash in deposit accounts located in the United States. This amount is classified within cash and cash equivalents.

The Company concluded that Avenue 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. In addition, the Company elected to account for the Avenue Loan Facility under the fair value option in accordance with ASC 825, "Financial Instruments." Under the fair value option, changes in fair value are recorded in earnings except for fair value adjustments related to instrument specific credit risk, which are recorded as other comprehensive income or loss. As such, the proceeds were first allocated to the Avenue Loan Facility at fair value in the amount of $28,215 and the remaining amount of $1,389 was allocated to the Warrant.

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**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

**NOTE 6: - DEBT (Cont.)**

The Company remeasurement expenses related to the Avenue Loan for the three and six months ended June 30, 2025, were $807 and $1,077, compared to $169 and $86 of remeasurement income for the three and six months ended June 30, 2024, which were included as part of the financial (income) expenses in the statement of comprehensive loss. During the six month periods ended June 30, 2025 and, 2024, the Company did not recognize any instrument specific credit risk fair value adjustment.

In connection with the debt modification, the Company also modified the Warrant by reducing the exercise price of the Warrant from $3.334 to $2.02. During the six months ended June 30, 2024, the Company recognized the incremental fair value resulting from the modification in the amount of $70.

On December 16, 2024, the Company, entered into the Third Amendment to Loan and Security Agreement and Supplement (the "Third Avenue Amendment") with the Avenue Lenders. Pursuant to the Third Avenue Amendment, the parties agreed to (i) amend the potential interest only period under the loan facility such that the existing interest only period ending on May 30, 2025 was extended by a period of six months provided the Company achieving certain net proceeds from an equity financing on or before March 31, 2025 in the aggregate; (ii) an additional sixth month interest only extension period was added, which is conditioned on the Company achieving a certain net revenue milestone, with cash burn not to exceed a certain level, for the trailing six month period ending September 30, 2025; (iii) the interest only period may not exceed a total of 36 months from the closing of the loan as of May 1, 2023; and (iv) the maturity date of the loan will be extended from May 1, 2027 to November 1, 2027, provided that the Company meets the foregoing amended milestones. In January 2025, the Company met the equity financing milestone.

In addition, the Avenue Amendment provides (i) that the Company will seek stockholder approval to reprice the Warrant issued to the Avenue Lenders on May 1, 2023 to permit an amendment to the exercise price of such Warrant to the "minimum price" as defined by Nasdaq rules as of the closing of the Avenue Amendment (or $0.7208 per share) and (ii) permit the Avenue Lenders, subject to Nasdaq rules, to convert up to $2,000 of the principal amount of its loan to the Company's common stock at a conversion price of $0.8650 per share.

On April 28, 2025, the Company held a special meeting of stockholders in which the stockholders approved a reduction to the exercise price of certain warrants to purchase 584,882 shares of Common Stock issued to the Avenue Lenders to $0.7208 per share. The Company recognized the incremental fair value resulting from the modification in the amount of $102.

On April 30, 2025, the Company refinanced its existing $30,000 credit facility with a new $32,500 credit agreement (the "Credit Agreement"), by and among the Company 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") (the "Callodine Loan Facility). Under the terms of the Credit Agreement, each Lender agreed to make a multi-draw term loan (each a "Term Loan") in which the Company borrowed $32,500 at the time of closing on April 30, 2025. In addition, the Company may at its option draw an aggregate of up to an additional $17,500. $2,500 of such additional Term Loan is subject to the achievement of certain revenue and gross margin thresholds. $15,000 of such additional Term Loan is subject to the discretion of the Agent and the Lenders. The Credit Agreement has a five-year term that matures in April 2030.

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 (7.75%). Upon maturity and/or upon an event of default (or upon any acceleration), interest shall automatically accrue without notice to the Company at a rate per annum equal to the lesser or (i) three percent (3%) over the Contract Rate (as defined in the Credit Agreement), or (ii) the maximum rate of interest permitted to be

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**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

**NOTE 6: - DEBT (Cont.)**

charged by applicable laws or regulations until paid. The Company paid 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.

In connection with the funding of the closing amount, the Company agreed to issue the Lenders a warrant to purchase an aggregate of 2,114,140 shares of our Common Stock, with an exercise price of $0.8278, which shall have a term of seven years from the issuance date. In addition, up to $2,500 of the loaned amount can be converted into shares of our Common Stock at a price of $0.9933 per share

The Company concluded that 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. In addition, the Callodine Loan Facility is measured at amortized cost.

The fair value of the Callodine Loan Facility is recognized in connection with the Company's Credit Agreement with respect to the Initial Commitment Amount only. 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, is 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 $32,500 with the fair value of the warrants of $1,234 and the loan terms interest rate equal to the greater of (i) The SOFR, and(ii) 4.0% plus a margin of 7.75%. The implied internal rate of return of the loan resulted with B rating US dollar zero coupon discount curve plus a 11.473% credit curve.

As of June 30, 2025, the Company did not meet one of the financial covenants under the Credit Agreement. Upon an Event of Default (as defined in the Credit Agreement) under the Credit Agreement, interest shall accrue to 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. The Company notified Callodine of its intention to utilize an Equity Cure (as defined in the Credit Agreement) to address the event of default. Callodine waived the event of default, subject to the successful implementation of an equity cure no later than November 15, 2025.

The Company can avoid an event of default in connection with such covenant by executing an equity cure. An equity cure may be effected through the issuance of additional Equity Interests and/or Subordinated Debt (each as defined in the Credit Agreement), on terms and conditions reasonably satisfactory to the Agent, in an aggregate amount equal to or greater than one-hundred and fifty percent (150%) of the breached amount for the first such cure, one-hundred and seventy-five percent (175%) for the second such cure, and two-hundred percent (200%) for the third such cure (each such amount referred to as the "Minimum Cure Amount"). The Company notified Callodine of its intention to utilize an equity cure to address the event of default as defined in the Credit Agreement.

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**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

**NOTE 6: - DEBT (Cont.)**

*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 five-year senior secured credit facility in an aggregate principal amount of up to $50 million, of which $25 million was made available on the closing date and up to $25 million was to be made available on or prior to June 30, 2023, subject to certain revenue requirements (the "Orbimed Loan").

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 226,586 shares of the Company's Common Stock, at an exercise price of $6.62 per share, which shall have a term of 7 years from the issuance date. The Orbimed Warrant contains customary share adjustment provisions, as well as weighted average price protection in certain circumstances but in no event will the exercise price of the Warrant be adjusted to a price less than $4.00 per share. Following the issuance and sale of the Company's Series C Preferred Stock in February 2024, and as a result of a certain price protection provision in the Orbimed Warrant, the exercise price of the Orbimed Warrant was adjusted to a price per share of $4.00.

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 six-months periods ended June 30, 2025 were $0 and $29, respectively. For the three and six-months periods ended June 30, 2024 the Company remeasurement income were $61 and $86, respectively.

*Pre-Funded Warrants*

On February 15, 2024, as part of the acquisition of Twill (See note 1) the Company issued Pre-Funded Warrants to purchase up to 10,000,400 shares of Company Common Stock, issuable in 4 equal tranches, to a trust (the "Trust") formed for the benefit of certain equity and debt holders of Twill.

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 Warrant 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 November 2024, a total of 2,500,100 Pre-Funded Warrants were exercised into 2,499,828 shares of Common Stock.

In February 2025, a total of 2,500,100 Pre-Funded Warrants were exercised into 2,499,698 shares of Common Stock.

During the three and six-months periods ended June 30, 2025, the Company recognized $289 of remeasurement expenses and $796 of remeasurement income related to the Pre-Funded Warrants respectively. For the three and six-months periods ended June 30, 2024, the Company remeasurement income was $3,401 and $12,557 respectively.

[**Table of Contents**](#TOC)

**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

**NOTE 7: - 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.

[**Table of Contents**](#TOC)

**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

**NOTE 7: - FAIR VALUE MEASUREMENTS (Cont.)**

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. The Company's Orbimed loan facility (as defined herein) was measured at fair value using Level 3 unobservable inputs until the payoff date of May 1, 2023. The Orbimed warrant liability was measured at fair value using Level 3 unobservable inputs. In addition, the Avenue Loan Facility is also measured at fair value using level 3 inputs.

The following tables present information about the Company's financial liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Fair Value** | **Level 1** | **Level 2** | **Level 3** |
| Financial assets: |  |  |  |  |
| Cash and cash equivalents: |  |  |  |  |
| U.S. treasury notes | $12521 | $— | $12521 | $— |
| Total financial assets | $12521 | $— | $12521 | $— |
| Financial liabilities: |  |  |  |  |
| Orbimed Warrant liability | 43 |  |  | 43 |
| Pre-Funded Warrant liability | 3350 |  | 3350 |  |
| Total financial liabilities | $3393 | $— | $3350 | $43 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Fair Value** | **Level 1** | **Level 2** | **Level 3** |
| Financial assets: |  |  |  |  |
| Cash and cash equivalents: |  |  |  |  |
| U.S. treasury notes | $7305 | $— | $7305 | $— |
| Total financial assets | $7305 | $— | $7305 | $— |
| Financial liabilities: |  |  |  |  |
| Long-term loan | $28923 | $— | $— | $28923 |
| Orbimed Warrant liability | 72 |  |  | 72 |
| Pre-Funded Warrant liability | 5896 |  | 5896 |  |
| Total financial liabilities | $34891 | $— | $5896 | $28995 |

---

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**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

**NOTE 7: - FAIR VALUE MEASUREMENTS (Cont.)**

*Loan Facilities*

The fair value of the Avenue 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 Avenue Loan Facility fair value estimate incorporates comparisons to instruments with similar covenants, collateral, and risk profiles and was obtained using a discounted cash flow technique. The fair value of the Avenue Loan Facility, as of April 30, 2025, was estimated using a discount rate of 19% which reflects the internal rate of return of the Avenue Loan Facility at closing, as of May 1, 2023. For the three and six-months periods ended June 30, 2025 and June 30, 2024, the change in the fair value of the loan was recorded in earnings since the Company concluded that the change in fair value was not related to instrument-specific credit risk.

*Orbimed Warrant Liability*

The fair value of the Orbimed Warrant liability 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 Orbimed Warrant liability is estimated by the Company based on the Monte-Carlo simulation valuation technique, in order to predict the probability of different outcomes that rely on repeated random variables.

The following inputs were used to estimate the fair value of the Orbimed Warrant liability:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| Stock price | $0.67 | $0.79 |
| Exercise price | 4.00 | 4.00 |
| Expected term (in years) | 3.95 | 4.44 |
| Volatility | 86.4% | 91.2% |
| Dividend rate |  |  |
| Risk-free interest rate | 3.71% | 4.53% |

---

[**Table of Contents**](#TOC)

**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

**NOTE 7: - FAIR VALUE MEASUREMENTS (Cont.)**

The following tables present a summary of the changes in the fair value of our financial instruments:

---

| | | | |
|:---|:---|:---|:---|
|  | **Long-Term Loan** | **Orbimed Warrant Liability** | **Pre-funded Warrant Liability** |
| Balance as of March 31, 2025 | $29194 | $42 | $3061 |
| Exercise |  |  |  |
| Principal repayments on long-term loan | (31515) |  |  |
| Change in fair value | 2321 | 1 | 289 |
| Balance as of June 30, 2025 | $0 | $43 | $3350 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Long-Term Loan** | **Orbimed Warrant Liability** | **Pre-funded Warrant Liability** |
| Balance as of January 1, 2025 | $28923 | $72 | $5896 |
| Exercise |  |  | (1750) |
| Principal repayments on long-term loan | (31515) |  |  |
| Change in fair value | 2592 | (29) | (796) |
| Balance as of June 30, 2025 | $0 | $43 | $3350 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Long-Term Loan** | **Orbimed Warrant Liability** | **Pre-funded Warrant Liability** |
| Balance as of March 31, 2024 | $28462 | $215 | $15301 |
| Issuance |  |  |  |
| Change in fair value | 169 | (61) | (3401) |
| Balance as of June 30, 2024 | $28631 | $154 | $11900 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Long-Term Loan** | **Orbimed Warrant Liability** | **Pre-funded Warrant Liability** |
| Balance as of January 1, 2024 | $28545 | $240 | $— |
| Issuance |  |  | 24457 |
| Change in fair value | 86 | (86) | (12557) |
| Balance as of June 30, 2024 | $28631 | $154 | $11900 |

---

[**Table of Contents**](#TOC)

**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

#### NOTE 8: - 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 3% of the sales of the products and other related revenues (based on the U.S. dollar) generated from such projects, up to 100% of the grants received. Royalty payment obligations also

bear interest at the LIBOR rate. The obligation to pay these royalties is contingent on actual sales of the products and in the absence of such sales, no payment is required.

In connection with specific research and development activities, Physimax Technology ("Physimax"), prior to its acquisition by the Company, received $1,012 of participation payments from the IIA. The Company's total commitment for royalties payable with respect to future sales, based on IIA participation received, net of royalties accrued or paid, totaled $954 as of June 30, 2025.

During the three and six-months periods ended June 30, 2025 and June 30, 2024, the Company did not record IIA royalties related to the acquisition of Physimax Technology.

[**Table of Contents**](#TOC)

#### 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: - INTANGIBLE ASSETS

---

| | | | |
|:---|:---|:---|:---|
| a. Finite-lived intangible assets: |  |  |  |
|  | **June 30,**  | **December 31,**  | **Weighted Average** |
|  | **2025** | **2024** | **Remaining Life** |
|  |  |  | **As of June 30, 2025** |
| Original amounts: |  |  |  |
| Technology | $22580 | $22580 | 6.5 |
| Brand | 376 | 376 |  |
| Customer Relationship Healthcare | 13791 | 13791 | 10.5 |
| Domains | 23 | 23 |  |
|  | 36770 | 36770 |  |
| Accumulated amortization: |  |  |  |
| Technology | 17918 | 16611 |  |
| Brand | 376 | 376 |  |
| Customer Relationship Healthcare | 1594 | 1018 |  |
| Domains | 4 | 3 |  |
|  | 19892 | 18008 |  |
| Intangible assets, net | $16878 | $18762 |  |
| b. Estimated amortization expense: |  |  |  |
| For the year ended December 31, |  |  |  |
| Remainder of 2025 | 943 |  |  |
| 2026 | 1875 |  |  |
| 2027 | 1875 |  |  |
| 2028 | 1880 |  |  |
| 2029 | 1877 |  |  |
| Thereafter | 8428 |  |  |
|  | $16878 |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Amortization expenses for the three and six month periods ended June 30, 2025 were $722 and $1,884, respectively. For the three and six month periods ended June 30, 2024, the expenses were $1,300 and $2,516, respectively.

[**Table of Contents**](#TOC)

#### 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: - RELATED PARTIES TRANSACTIONS
On February 25, 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 Company agreed to pay the consultant a monthly cash retainer upon the successful completion of certain milestones. In addition, the Company agreed to issue 150,000 restricted shares of common stock to the consulting firm, vesting quarterly over a four-year period. As of June 30, 2025, the consulting firm received approximately 258,000 shares of Common Stock and warrants to purchase up to 125,000 shares of Common Stock.

On February 24, 2025, the Company entered into a second amendment to the consulting agreement, pursuant to which it agreed to pay the consulting firm a fixed monthly cash retainer of $10. During the three and six- months periods ended June 30, 2025, the Company recorded share-based compensation expenses related to this service provider in the amounts of $35 and $100, respectively.

#### NOTE 11: - STOCKHOLDERS' EQUITY
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. In April 2025, the Compensation Committee of the Company's Board of Directors (the "Compensation Committee") approved the grant of 812,800 restricted shares subject to time vesting to employees of the Company and approved the grant of options to purchase up to 1,194,950 shares of Common Stock, to employees and consultants of the Company, at exercise prices between $0.66 to $0.78 per share. The time vesting restricted shares and stock options vest over three years commencing on the respective grant dates. The options have a ten-year term. The restricted shares and the options were issued under Amended and Restated 2020 Equity Incentive Plan, as amended (the "the 2020 Plan"). In addition, the Compensation Committee approved the grant of 175,000 restricted shares of Common Stock to certain service providers and approved a reduction in the exercise price of warrants to purchase up to 356,250 shares of Common Stock issued to certain consultants in the past at exercise prices between $1.43 to $2.00 per share, to an exercise price of $0.78 per share. The warrants are exercisable into shares of Common Stock on or before February 12, 2026 and December 31, 2027.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. On April 18, 2025, the Board of Directors of the Company appointed Chen Franco-Yehuda to serve as the Company's Chief Financial Officer, Treasurer and Secretary, effective as of May 15, 2025. In connection with her appointment, the Company agreed to issue Ms. Franco-Yehuda 500,000 restricted shares of the Company's common stock, pursuant to the 2020 Plan. The restricted shares vest over three years , with one third of such shares vesting on April 27, 2026, and the remaining shares vesting in equal quarterly amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. In June 2025, the Compensation Committee approved the grant of 102,500 restricted shares subject to time vesting and 80,000 performance-based restricted shares to employees of the Company and approved the grant of options to purchase up to 16,000 shares of Common Stock and 150,000 performance-based options to purchase Common Stock to employees of the Company, at an exercise price between $0.67 to $0.70 per share. The time vesting restricted shares and stock options vest over three years commencing on the respective grant dates. The options have a ten-year term. The restricted shares and the options were issued under the 2020 Plan. In addition, the Compensation Committee approved the grant of warrants to purchase up to 450,000 shares of Common Stock, with exercise prices of $0.67 per share, to certain consultants. The warrants are exercisable into shares of Common Stock on or before June 1, 2028.

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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: - STOCKHOLDERS' EQUITY (Cont.)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. On May 20, 2025, the Company, upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock, filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company's Series C Preferred Stock (the "Series C Certificate of Designation"), an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company's Series C-1 Preferred Stock (the "Series C-1 Certificate of Designation"), and an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company's Series C-2 Preferred Stock (the "Series C-2 Certificate of Designation", collectively with the Series C Certificate of Designation and the Series C-1 Certificate of Designation, the "Series C Certificates of Designation"), all with the Secretary of State of the State of Delaware.

The Series C Certificates of Designation were amended to extend the mandatory conversion period from fifteen (15) to twenty-four (24) months from the original issue date. The Company will issue a dividend equal to fifteen percent (15%) of the number of shares of Common Stock issuable upon conversion of the Series C Preferred Stock, Series C-1 Preferred Stock and/or Series C-2 Preferred Stock then held by such holder for each full quarter anniversary of holding following the filing of the Series C Certificates of Designation with the Secretary of State of the State of Delaware.

The Company concluded that the Series C, C-1 and C-2 preferred shares modification should be accounted for as a modification transaction. For the three months ended June 30, 2025, the Company recorded the increase in fair value as a deemed dividend in the amount of $734.

During the three and six-months periods ended June 30, 2025, a total of 1,145 and 1,270 shares of certain Series C Convertible Preferred Stock were converted into 812,627 and 888,432 shares of Common Stock, respectively.

During the three and six-month periods ended June 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 $1,309 and $3,503, respectively. For the three and six-month periods ended June 30, 2024, the Company accounted for the dividend shares as a deemed dividend in a total amount of $1,785 and $2,529, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. In December 2024, the Company issued 7,055 and 11,750 Series D and D-1 preferred shares, respectively, at a purchase price of $1,000 per preferred share. The Series D and D-1 Preferred Stock are convertible into Common Stock at $0.73 per Common Stock. As a result of the sale of the preferred stock, the aggregate gross proceeds to the Company from the Offering were approximately $18,805 .

The preferred stock will automatically convert into shares of Common Stock, subject to certain beneficial ownership limitations, including a non-waivable 19.99% ownership blocker, on the 12-month anniversary of the issuance date. The holders of preferred stock will also be entitled to dividends equal to a number of shares of Common Stock equal to ten percent (10%) of the number of shares of Common Stock issuable upon conversion of the preferred stock then held by such holder for each full quarter anniversary of holding for a total of four (4) quarters from the Closing Date, all issuable upon conversion of the preferred stock.

In addition, the Company and certain purchasers in the Offering that are holders of the Company's Series B and C Preferred Stock executed lock up agreements (the "Lock Up Agreement"), pursuant to which the Company 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

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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: - STOCKHOLDERS' EQUITY (Cont.)
"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.

During the three and six-months period ended June 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 $2,123 and $4,349 respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. On January 7, 2025, the Company entered into securities purchase agreements (each, a "Series D Purchase Agreement") with accredited investors relating to an offering (the "Series D Offering") and the sale of an aggregate of (i) 4,950 shares of newly designated Series D-2 Preferred Stock (the "Series D-2 Preferred Stock"), and (ii) 1,850 shares of Series D-3 Preferred Stock (the "Series D-3 Preferred Stock"), at a purchase price of $1,000 for each share of preferred stock. As a result of the sale of the preferred stock, the aggregate gross proceeds to the Company from the Series D Offering are approximately $6,800 . The closing of the Series D-2 Preferred Stock, and Series D-3 Preferred Stock occurred on January 14, 2025.

The conversion of the preferred stock was subject to stockholder approval (Note 11g). In addition, the preferred stock will automatically convert into shares of Common Stock, subject to certain beneficial ownership limitations, on the 12-month anniversary of the issuance date. The holders of preferred stock will also be entitled to dividends equal to a number of shares of Common Stock equal to ten percent (10%) of the number of shares of Common Stock issuable upon conversion of the preferred stock then held by such holder for each full quarter anniversary of holding for a total of four quarters from the Closing Date, all issuable upon conversion of the preferred stock.

During the three and six-months periods ended June 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 $535 and $954 respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. On April 28, 2025, the Company held a special meeting of stockholders in which the stockholders approved the (A) the issuance of shares of common stock, in excess of 20% of the issued and outstanding shares of Common Stock, upon: (i) the conversion of 25,605 shares of our Series D, D-1, D-2 and D-3 Preferred Stock into an aggregate of 33,956,850 shares of Common Stock, which were issued pursuant to private placement transactions that closed on December 18, 2024 and January 14, 2025, (ii) the issuance of up to 13,582,740 shares of Common Stock issuable as dividends to the Series D, D-1, D-2 and D-3 Preferred Stock; and (iii) the issuance of up to 4,175,070 shares of Common Stock issuable as share consideration provided under the Lock Up Agreements; and (B) (i) reduce the exercise price of certain warrants to purchase 584,882 shares of Common Stock issued to the Avenue Lenders to $0.7208 per share, and (ii) to permit the conversion of up to two million dollars of the principal amount of the loan issued by the Avenue Lenders to us at a conversion price of $0.8650 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. Between May 23, 2025 and May 28, 2025, the Company and holders that previously entered into the Lock-Up Agreement, 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 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.

The Company concluded that the A&R Lock-Up Agreement modification should be accounted for as a modification transaction. For the three months ended June 30, 2025, the Company recorded the increase in fair value as a deemed dividend in the amount of $870.

[**Table of Contents**](#TOC)

#### 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: - STOCKHOLDERS' EQUITY (Cont.)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. As of June 30, 2025, there were 1,882 shares of Series A-1 Convertible Preferred Stock (the "Series A-1 Preferred Stock") issued and outstanding. The outstanding Series A-1 Preferred Stock is convertible into approximately 875,950 shares of Common Stock, including the issuance of dividend shares.

As of June 30, 2025, there were 4,946 shares of Series B-1 Convertible Preferred Stock (the "Series B-1 Preferred Stock") issued and outstanding. The outstanding Series B-1 Preferred stock is convertible into approximately 2,299,432 shares of Common Stock, including the issuance of dividend shares.

As of June 30, 2025, there were 21,007 shares of Series C, C-1 and C-2 preferred stock issued and outstanding. The outstanding Series C, C-1 and C-2 preferred stock is convertible into approximately 15,062,968 shares of Common Stock, including the issuance of dividend shares.

As of June 30, 2025, there were 25,605 shares of Series D, D-1, D-2 and D-3 Preferred Stock issued and outstanding. The outstanding Series D, and D-1 Preferred Stock is convertible into approximately 39,928,821shares of Common Stock, including the issuance of dividend shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. In March 2025, a total of 1,675 shares of certain Series A-1 Preferred Stock were converted into 779,601 shares of Common Stock.

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 one share of Common Stock.

In January 2025, 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 6,541,028 shares, from 11,356,624 to 17,897,652.

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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: - STOCKHOLDERS' EQUITY (Cont.)
Transactions related to the grant of options to employees, directors, and non-employees under the above plans and non-plan options during the six-months period ended June 30, 2025, were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | |  | | |
|  | |  | **Weighted**<br>**average**<br>**remaining**<br>**contractual**<br>**life** | <br>**Aggregate**<br>**Intrinsic**<br>**value** |
|  | <br>**Number of**<br>**options** | $— | **Years** | **$** |
| Options outstanding at beginning of period | 10222749 |  | 8.55 | 9  |
| Options granted | 1360950 |  |  |  |
| Options exercised | - |  |  |  |
| Options expired | (797216) |  |  |  |
| Options forfeited | (1227965) |  |  |  |
| &nbsp;&nbsp;Options outstanding at end of period | 9558518  |  | 8.38 | 5  |
| &nbsp;&nbsp;Options vested and expected to vest at end of period | 7484313  |  | 8.31 | 3  |
| &nbsp;&nbsp;Exercisable at end of period | 3935650  |  | 7.19 | 4  |

---

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 second quarter of 2025 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 June 30, 2025. This amount is impacted by the changes in the fair market value of the Common Stock.

Transactions related to the grant of restricted shares to employees and directors under the above plans during the six-months period ended June 30, 2025, were as follows:

---

| | |
|:---|:---|
|  | **Number of**<br>**Restricted shares** |
| Restricted shares outstanding at beginning of year | 5408404 |
| Restricted shares granted | 1525300 |
| Restricted shares forfeited | (66504) |
| &nbsp;&nbsp;Restricted shares outstanding at end of period | 6867200 |

---

As of June 30, 2025, the total unrecognized estimated compensation cost related to non-vested stock options and restricted shares granted prior to that date was $7,434, which is expected to be recognized over a weighted average period of approximately one (1.15) year.

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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: - STOCKHOLDERS' EQUITY (Cont.)
The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model.

The fair value of the restricted shares vested during the six months period ended June 30, 2025 was $279.

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:

---

| | | |
|:---|:---|:---|
|  | **Six months ended**  | **Six months ended**  |
|  | **June 30,**  | **June 30,**  |
|  | **2025** | **2024** |
| Volatility | 96.72-102.19% | 94.75-97.97% |
| Risk-free interest rate | 4.08-4.23% | 3.85-4.72% |
| Dividend yield | —% | —% |
| Expected life (years) | 5.00-5.87 | 5.00-5.87 |

---

The total compensation cost related to all of the Company's stock-based awards recognized during the six-month periods ended June 30, 2025 and 2024 was comprised as follows:

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **June 30,**  | **June 30,**  |
|  | **2025** | **2024** |
| Cost of revenues | $6 | $5 |
| Research and development | 441 | 448 |
| Sales and marketing | 583 | 1650 |
| General and administrative | 1005 | 1459 |
| Total stock-based compensation expenses | $2035 | $3562 |

---

---

| | | |
|:---|:---|:---|
|  | **Six months ended**  | **Six months ended**  |
|  | **June 30,**  | **June 30,**  |
|  | **2025** | **2024** |
| Cost of revenues | $16 | $12 |
| Research and development | 966 | 1563 |
| Sales and marketing | 1398 | 3406 |
| General and administrative | 1997 | 5439 |
| Total stock-based compensation expenses | $4377 | $10420 |

---

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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 12: - SELECTED STATEMENTS OF OPERATIONS DATA
Financial expenses (income), net:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**  | **Three months ended**  | **Six months ended**  | **Six months ended**  |
|  | **June 30,**  | **June 30,**  | **June 30,**  | **June 30,**  |
|  | **2025** | **2024** | **2025** | **2024** |
| Bank charges | $31 | $29 | $65 | $45 |
| Foreign currency adjustments expenses, net | 204 | (33) | 162 | (68) |
| Interest income | (237) | (339) | (526) | (729) |
| Remeasurement of long-term loan | 3401 | 1154 | 4608 | 2058 |
| Remeasurement of warrant liability | 289 | (3462) | (825) | (12643) |
| Modification of warrants | 102 | 70 | 102 | 70 |
| Total financial expenses (income), net | $3790 | $(2581) | $3586 | $(11267) |

---

**NOTE 13:- 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 one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the Chief Operating Decision Maker ("CODM"), which is the Company's chief executive officer, in deciding how to allocate resources and assess performance. The Company's CODM evaluates the Company's financial information and resources and assesses the performance of these resources on a consolidated basis. There is no expense or asset information that are supplemental to those disclosed in these consolidated financial statements, that are regularly provided to the CODM. The allocation of resources and assessment of performance of the operating segment is based on consolidated net loss as shown in our consolidated statement of comprehensive loss. The CODM considers net loss in the annual forecasting process and reviews actual results when making decisions about allocating resources. Since the Company operates as one operating segment, financial segment information, including profit or loss and asset information, can be found in the consolidated financial statements.

*Geographic Information*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•As of June 30, 2025, the majority of the Company's long live assets are located in Israel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•As of June 30, 2025, the majority of the Company's revenue is generated in the U.S.

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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: - INCOME TAXES**

During the three and six month periods ended June 30, 2025, the Company recorded tax expenses in the amount of $0 and $22, respectively, and for the three and six month periods ended June 30, 2024, the Company recorded income tax in the amounts of $0 and $1,994.

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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**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

**NOTE 1**5**: - 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 common shares related to the outstanding options, warrant and preferred shares excluded from the calculations of diluted net loss per share due to their anti-dilutive effect were 78,489,700 and 75,021,692 for the three and six-months periods ended June 30, 2025, respectively, and for the three and six-months ended June 30 2024, 33,782,788 and 32,875,394 respectively.

The following table sets forth the computation of the Company's basic net earnings (loss) per common stock:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**  | **Three months ended**  | **Six months ended**  | **Six months ended**  |
|  | **June 30,**  | **June 30,**  | **June 30,**  | **June 30,**  |
|  | **2025** | **2024** | **2025** | **2024** |
| Net loss | $12989626 | $13609962 | $22216789 | $20784974 |
| Deemed dividend (contribution) | 5572391 | (8705979) | 10411013 | (6671773) |
| Less: loss attributable to participating preferred stock | 9783141 | 1535086 | 16856888 | 3968917 |
| Net loss attributable to common stock shareholders used in computing basic net loss per share | $8778876 | $3368897 | $15770914 | $10144284 |
| Weighted average number of common stock used in computing basic loss per share | 49630949 | 39830793 | 48500775 | 37778087 |
| Basic net loss per common stock  | $0.18 | $0.08 | $0.33 | $0.27 |

---

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**NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)**

**U.S. dollars in thousands (except stock and per share data)**

#### NOTE 16: - SUBSEQUENT EVENTS
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. On July 23, 2025, the Company's stockholders approved the Amended and Restated 2020 Equity Compensation Plan. The amendment (i) provides for an automatic annual increase in the plan's share reserve equal to 6 % of the Company's fully diluted outstanding common stock as of December 31 for each year from 2026 through 2030, and (ii) authorizes the issuance of restricted stock units (RSUs) as a permissible award type under the plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. 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 (160,000,000) shares, $0.0001 par value per share, to four hundred million (400,000,000) shares, $0.0001 par value per share. The amendment to the Certificate of Incorporation was filed with the Delaware Secretary of State and took effect at 5:30 p.m., on August 8, 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 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, 2024. 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, 2024, 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.*

We are a leading global digital health company with a mission to power the behavior changes that drive better health. 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 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 to 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Physical Health: Focuses on the prevention, and treatment of physical ailments; primarily cardiometabolic and musculoskeletal conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Mental Health: Addresses emotional and psychological well-being, including stress management, as well as clinical anxiety, and depression across all levels of severity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Social and Environmental Factors: Considers influences like socioeconomic status, community resources, housing, and education.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Individualized Care: Tailored user journey and care plans that respect personal goals, cultural values, and life circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 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 artificial intelligence ("AI") personalized care solutions that integrate the management of physical and mental health needs.

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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 2024, our eligible user base spans millions of individuals worldwide, supported by partnerships with employers, health plans, pharmaceutical companies, and providers aiming to deliver instant access to the highest quality and most effective self-care and virtual human care that delivers the optimal level of clinical utilization to ensure the best value and outcomes to our users and customers.

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, which has forced us to create what we consider the industry's most engaging and effective self-care whole-person digital health solutions; and we continue to operate in the D2C market in the U.S. by providing our chronic condition management and patient engagement solutions across many different health conditions. In addition, we use the D2C market as an innovation laboratory to develop and test new features and benefits to ensure that these innovations meet our high engagement and outcomes standards before deploying them in the business-to-business ("B2B") market. From our D2C origins, Dario and Twill expanded into similar B2B market segments over the past seven years such that these market segments now represent three-fourths of our current revenues. 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 and currently includes three of the five largest global technology companies and one of the two largest employers in the United States. We seek to provide solutions to their employees that address the primary areas of health condition focus on by employers for meaningful costs savings that can deliver high and sustainable returns on investment, which can exceed 5:1. In this market segment, we go to market through a direct sales force, consultants, brokers, and channel partners that sell our solutions to their health plan and employer customers.

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 particularly specialized in providing its behavioral health offering to Medicare and Medicaid members, where we have established itself as the most engaging and effective solutions among these demographics. We are now leveraging this Medicare and Medicaid behavioral health specialty to expand access to its other chronic condition solutions to these populations. We go to market primarily through our own sales force and partners with large national health plans and other channel partners.

In 2018, Twill began to expand its offering to pharmaceutical companies, and in 2022 we entered into our first pharmaceutical company partnership. We now deliver these combined capabilities on our engagement platform to the pharmaceutical industry to provide 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, 3) Patient journey data analytics to better understand and target patients to get the right therapy to the right patient at the right time. We have provided our engagement platform services to a dozen global pharmaceutical companies across nearly as many medical conditions. We have a dedicated team with many years of experience selling into the pharmaceutical industry.

**Recent Developments** 

*New Clients*

During the period ended June 30, 2025, we added 21 new clients year-to-date, including 1 top U.S healthcare institution, 2 regional health plan and 18 employers, as part of our 2025 goal to add 40 new clients.

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

On May 1, 2025, we announced the closing of a debt financing facility for up to $50 million provided by Callodine Commercial Finance, LLC (in its capacity as agent for all lenders, "Agent", and collectively with other lenders, "Lenders" and each a "Lender") (the "Callodine Loan Facility"). The capital refinances our existing credit facility, providing additional operational flexibility and supporting the commercial execution of our Business-to-Business-to-Consumer ("B2B2C") strategy across pharmaceutical companies, self-insured employers and payer channels. Under the terms of the credit agreement (the "Credit Agreement"), we borrowed $32.5 million at closing. In addition, an aggregate of up to an additional $17.5 million is available to be drawn down at our option, based on the achievement of certain revenue thresholds. The Credit Agreement has a five-year term that matures in April 2030. In connection with the funding of the closing amount, we also issued a warrant to purchase 2,114,140 shares of our common stock, with an exercise price of $0.8278. In addition, up to $2.5 million of the loaned amount can be converted into shares of our common stock at a price of $0.9933 per share. With the refinancing and current cash on hand, we believe that deferring the debt amortization from the end of 2025 to 2028 will allow the time to generate funds from operations to support our cash flow.

*Published Research Relating to Flu Vaccine Awareness*

**In May 2025, we announced that new research was published in the Journal of Medical Internet Research (JMIR) demonstrating the effectiveness of personalized digital health interventions to drive flu vaccine awareness in Dario members living with diabetes.**

*Amendments to Certificate of Designation of Preferences, Rights and Limitations of the Company's Series C Preferred Stock*

On May 20, 2025, we, upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock, filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company's Series C Preferred Stock (the "Series C Certificate of Designation"), an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company's Series C-1 Preferred Stock (the "Series C-1 Certificate of Designation"), and an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company's Series C-2 Preferred Stock (the "Series C-2 Certificate of Designation", collectively with the Series C Certificate of Designation and the Series C-1 Certificate of Designation, the "Series C Certificates of Designation"), all with the Secretary of State of the State of Delaware.

The Series C Certificates of Designation were amended to extend the mandatory conversion period from fifteen (15) to twenty-four (24) months from the original issue date. The Company will issue a dividend equal to fifteen percent (15%) of the number of shares of Common Stock issuable upon conversion of the Series C Preferred Stock, Series C-1 Preferred Stock and/or Series C-2 Preferred Stock then held by such holder for each full quarter anniversary of holding following the filing of the Series C Certificates of Designation with the Secretary of State of the State of Delaware.

The filing of the Series C Certificates of Designation was intended to amend and restate the terms mentioned above, and no additional securities were issued or sold as a result.

*Amended and Restated Lock-Up Agreement* 

As previously reported on January 7, 2025 we and certain holders of our Series B Preferred Stock and Series C Preferred Stock, executed lock up agreements (the "Lock Up Agreement"), pursuant to which we agreed to issue up to forty percent (40%) of the shares of Common Stock underlying the Series B Preferred Stock and the Series C Preferred Stock held by such holder, 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.

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Between May 23, 2025 and May 28, 2025, we 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 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.

*Strategic Commercial Agreement to Transform Chronic Condition Management and Sleep Health for Payers Nationwide*

**In June 2025, we announced a strategic commercial agreement with GreenKey Health to expand our integrated chronic condition management solutions into the sleep apnea market. This agreement complements our growing employer footprint, which began with multiple employer contracts announced in 2022 and 2023, including a mid-sized Midwestern city contract covering several thousand employees. These partnerships underscore the increasing demand for Dario's data-driven, value-based solutions designed to improve employee health, enhance productivity, and reduce healthcare costs.**

*Published Research Relating to GLP-1 and AI-Personalization Digital Health Findings*

 In June 2025, we unveiled new clinical research demonstrating Dario's ability to sustain outcomes post-GLP-1 treatment and accurately predict blood glucose levels using AI. These findings are already being incorporated into live implementations and commercial discussions, particularly with payers and self-insured employers seeking cost-effective ways to optimize GLP-1 investments. The announcement builds on Dario's continued success in the employer market, including multiple contracts signed in 2022 and 2023 to deliver our full suite of chronic condition solutions to diverse employee populations, from municipal governments to private sector employers. This momentum underscores the growing demand for integrated, evidence-based digital health solutions that deliver measurable ROI and improved long-term outcomes.

#### Results of Operations
***Comparison of the three and six months ended June 30, 2025 and June 30, 2024 (dollar amounts in thousands)***

*Revenues*

Revenues for the three and six months ended June 30, 2025 amounted to $5,369 and $12,121, respectively, compared to revenues of $6,255 and $12,013, respectively, during the three and six months ended June 30, 2024, representing a decrease of 14.2% and increase of 0.9%, respectively. The decrease in revenues for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, resulted from a decrease in our revenues from the pharma channel, and the increase for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, resulted mainly from an increase in our revenues from our Consumers channel.

*Cost of Revenues*

During the three and six months ended June 30, 2025, we recorded costs related to revenues in the amount of $2,405 and $5,275, respectively, compared to costs related to revenues of $3,499 and $6,825, respectively, during the three and six months ended June 30, 2024, representing a decrease of 31.3% and 22.7%, respectively. The decrease in cost of revenues in the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, was mainly a result of the decrease in amortization of technology, hardware and consumables and payroll related expenses recorded in the cost of revenues.

Cost of revenues consists mainly of the cost of hardware and consumables production, employees' salaries and related overhead costs, stock-based compensation, depreciation of production lines and related cost of equipment used in production, amortization of technologies, hosting costs, shipping and handling costs and inventory write-downs.

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*Gross Profit*

Gross profit for the three and six months ended June 30, 2025, amounted to $2,964 (55.2% of revenues) and $6,846 (56.5% of revenues), respectively, compared to $2,756 (44.1% of revenues) and $5,188 (43.2% of revenues), respectively, during the three and six months ended June 30, 2024. The increase in gross profit as a percentage of revenues for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, resulted mainly from change in revenue mix, lower amortization of technology and payroll related expenses recorded in the cost of revenues. Gross profit for the three and six months ended June 30, 2025, excluding amortization of acquired technology, stock-based compensation and depreciation was $3,417 (63.3% of revenues) and $8,199 (67.6% of revenues) compared to $4,009 (64.1% of revenues) and $7,625 (63.5% of revenues) during the three and six months ended June 30, 2024.

*Research and Development Expenses*

Our research and development expenses decreased by $3,089, or 45.4%, to $3,721 for the three months ended June 30, 2025, compared to $6,810 for the three months ended June 30, 2024, and decreased by $5,623, or 41.8%, to $7,829 for the six months ended June 30, 2025, compared to $13,452 for the six months ended June 30, 2024. The decrease was mainly due to efficiency and post merge integration activities resulting in a decrease in payroll expenses, stock-based compensation and subcontractors and consulting expenses. Our research and development expenses, excluding stock-based compensation and depreciation, for the three and six months ended June 30, 2025, were $3,246 and $6,788, respectively, compared to $6,299 and $11,765, respectively, for the three and six months ended June 30, 2024, a decrease of $3,053 and $4,977, respectively. The decrease was mainly due to efficiency and post merge 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, expenses related to: (i) our solutions including our Diabetes Management, musculoskeletal (MSK), and our digital behavioral health solutions, (ii) labor, stock-based compensation contractors and engineering expenses, (iii) depreciation and maintenance fees related to equipment and software tools used in research and development and (iv) facilities expenses associated with and allocated to research and development activities.

*Sales and Marketing Expenses*

Our sales and marketing expenses decreased by $1,901, or 26.7%, to $5,231 for the three months ended June 30, 2025, compared to $7,132 for the three months ended June 30, 2024, and decreased by $2,938, or 20.9%, to $11,104 for the six months ended June 30, 2025, compared to $14,042 for the six months ended June 30, 2024. The decrease was mainly a result of lower payroll-related expenses, and stock-based compensation expenses, partially offset by higher amortization of our customer relationships intangible asset due to the full six months of expense from the acquisition of Twill, and an increase in subcontractors and consulting expenses. Our sales and marketing expenses, excluding stock-based compensation, depreciation and amortization for the three and six months ended June 30, 2025, were $4,341 and $9,088 compared to $5,389 and $10,467 for the three and six months ended June 30, 2024, a decrease of $1,048 and $1,379, respectively. The decrease was mainly due to a decrease in payroll-related expenses due to post merge integration activities and 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, online marketing campaigns of our service offering, trade show expenses and marketing consultants and subcontractors.

*General and Administrative Expenses*

Our general and administrative expenses decreased by $1,793, or 35.8%, to $3,212 for the three months ended June 30, 2025, compared to $5,005 for the three months ended June 30, 2024, and decreased by $5,218, or 44.4%, to $6,522 for the six months ended June 30, 2025, compared to $11,740 for the six months ended June 30, 2024. The decrease was mainly due to a decrease in stock-based compensation expenses, subcontractors and consulting expenses, and legal and accounting expenses specifically expenses that were related to Twill's acquisition on February 15, 2024. Our general

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and administrative expenses, excluding stock-based compensation, depreciation, and acquisition related costs for the three and six months ended June 30, 2025, were $2,193 and $4,497 compared to $2,993 and $5,143 for the three and six months ended June 30, 2024, a decrease of $800 and $646, respectively. The decrease was mainly due to a decrease in subcontractors and consulting expenses and legal and accounting expenses specifically expenses that were related to Twill's acquisition on February 15, 2024.

Our general and administrative expenses consist mainly of employees' salaries and related overhead costs, stock-based compensation, insurance costs, legal and accounting fees, acquisition related costs, expenses related to investor relations.

*Financial Income (Expenses), net*

Our financial expenses for the three months ended June 30, 2025, were $3,790, representing an increase of $6,371, compared to financial income of $2,581 for the three months ended June 30, 2024. Our financial expenses for the six months ended June 30, 2025, were $3,586, representing an increase of $14,853, compared to financial income of $11,267 for the six months ended June 30, 2024. The increase in our financial expenses, net, was mainly due to revaluation of pre-funded warrants issued in the first quarter of 2024, which are 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.

Financial income, net primarily consists of credit facility interest expense, interest income from cash balances, revaluation of warrants and pre-funded warrants, revaluation of long-term loan, bank charges, lease liability and foreign currency translation differences.

*Income tax*

Income tax expenses were $0 and $22 for the three and six months ended June 30, 2025, representing an increase of tax expenses of $0 and $2,016 as compared to income from taxes of $0 and $1,994 for the three and six months ended June 30, 2024. The increase in our income tax expenses was due to a reduction in the valuation allowance for deferred tax liability that resulted from the acquisition of Twill.

*Net loss*

Net loss decreased by $620, or 4.6%, to $12,990 for the three months ended June 30, 2025, compared to a net loss of $13,610 for the three months ended June 30, 2024, and increased by $1,432, or 6.9%, to $22,217 for the six months ended June 30, 2025, compared to a net loss of $20,785 for the six months ended June 30, 2024. The decrease in net loss for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was mainly due to the increase in our gross profit and the decrease in our operating expenses for the three months ended June 30, 2025. The increase in net loss for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was mainly due to the increase in our financial expenses, mainly from the valuation of the pre-funded warrants and the valuation allowance for deferred tax liability that resulted from the acquisition of Twill.

The factors described above resulted in net loss attributable to common stockholders for the three and six months ended June 30, 2025, amounted to $18,967 and $33,032, compared to net loss attributable to common stockholders of $4,904 and $14,113 for the three and six months ended June 30, 2024.

#### Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the United States ("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. Importantly, we note the NGFM measures captioned "Non-GAAP Adjusted Loss" are not recognized terms under U.S. GAAP, and as such, it is 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.

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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. Additionally, 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. The NGFM are provided to enhance readers' overall understanding of our current financial results and to provide further information to enhance the comparability of results between the current year period and the prior year period.

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. In this regard, the presentation of the NGFM herein below, is to help the reader of our unaudited condensed consolidated financial statements to understand the effects of the non-cash impact on our (U.S. GAAP) unaudited condensed consolidated statement of operations of the revaluation of the warrants and the expense related to stock-based compensation, each as discussed herein above.

A reconciliation to the most directly comparable U.S. GAAP measure to NGFM, as discussed above, is as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  | **2025** | **2024** | **$ Change** |
| **Net Loss Reconciliation** |  |  |  |
| Net loss - as reported | $(12990) | $(13610) | $620 |
| Adjustments |  |  |  |
| &nbsp;&nbsp;Depreciation and impairment expense | 80 | 538 | (458) |
| &nbsp;&nbsp;Amortization of acquired technology and brand | 722 | 1300 | (578) |
| &nbsp;&nbsp;Other financial (income) expenses, net | 3790 | (2581) | 6371 |
| &nbsp;&nbsp;Acquisition costs |  | 120 | (120) |
| &nbsp;&nbsp;Stock-based compensation expenses | 2035 | 3562 | (1527) |
| Non-GAAP adjusted loss | $(6363) | $(10671) | $4308 |

---

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| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  | **2025** | **2024** | **$ Change** |
| **Net Loss Reconciliation** |  |  |  |
| Net loss - as reported | $(22217) | $(20785) | $(1432) |
| Adjustments |  |  |  |
| &nbsp;&nbsp;Depreciation and impairment expense | 174 | 648 | (474) |
| &nbsp;&nbsp;Amortization of acquired technology, brand and customer relationship | 1884 | 2516 | (632) |
| &nbsp;&nbsp;Other financial (income) expenses, net | 3586 | (11267) | 14853 |
| &nbsp;&nbsp;Income tax | 22 | (1994) | 2016 |
| &nbsp;&nbsp;Acquisition costs |  | 713 | (713) |
| &nbsp;&nbsp;Stock-based compensation expenses | 4377 | 10420 | (6043) |
| Non-GAAP adjusted loss | $(12174) | $(19749) | $7575 |

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#### Liquidity and Capital Resources
As of June 30, 2025, we had approximately $21,954 in cash and cash equivalents compared to $27,764 on December 31, 2024.

We have experienced cumulative losses of $422,971 since inception (August 11, 2011) through June 30, 2025, and have a stockholders' equity of $63,986 as of June 30, 2025. In addition, we have not completed our efforts to establish a stable recurring source of revenues 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 $289,740 and a credit facility, net in the amount of $25,795, as of June 30, 2025.

On June 25, 2024, upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock, we filed a Second Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of our Series B Preferred Stock (the "Series B Certificate of Designation") and Second Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of our Series B-1 Preferred Stock, all with the Secretary of State of the State of Delaware (collectively, the "Certificates of Designation").The Certificates of Designation were amended to (i) extend the mandatory conversion period from fifteen (15) to eighteen (18) months from the original issue date and (ii) increase the percentage of dividends the holders of Series B Certificate of Designation and Series B-1 Certificate of Designation will be entitled to receive by including a dividend of ten percent (10%) for the fifth full quarter from the closing date and a dividend of twenty five percent (25%) for the sixth quarter from the closing date.

On September 11, 2024, upon obtaining the vote of a majority of the holders of the relevant class of preferred stock, we filed a Second Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of our Series B-3 Preferred Stock with the Secretary of State of the State of Delaware (the "Series B-3 Certificate of Designation"). The Series B-3 Certificate of Designation was amended to (i) extend the mandatory conversion period from fifteen (15) to eighteen (18) months from the original issue date and (ii) increase the percentage of dividends the holders of Series B-3 Certificate of Designation will be entitled to receive by including a dividend of ten percent (10%) for the fifth full quarter from the closing date and a dividend of twenty five percent (25%) for the sixth quarter from the closing date.

On May 1, 2023, we entered into a Loan and Security Agreement, and Supplement thereto (the "LSA"), by and between the us and our subsidiary, PsyInnovations Inc. ("PsyInnovations"), collectively as the borrowers (the "Borrowers") and the Avenue Lenders. The LSA provided for a four-year secured credit facility in an aggregate principal amount of up to $40 million (the "Loan Facility"), of which $30 million was made available on the closing date (the "Initial Tranche") and up to $10 million (the "Discretionary Tranche") would have been made available on the later of July 1, 2023 or the date the Avenue Lenders approved the issuance of the Discretionary Tranche. On May 1, 2023, we closed on the Initial Tranche, less certain fees and expenses payable to or on behalf of the Avenue Lenders.

All obligations under the LSA were guaranteed by our wholly owned subsidiary, Labstyle. All obligations under the LSA, and the guarantees of those obligations, were secured by substantially all of our, PsyInnovations' and the guarantor's assets. Subject to certain milestones set forth in the LSA, the Borrowers were required to make monthly payments to the Avenue Lenders of interest at the then effective rate. If the Borrowers failed to meet the milestones set forth in the LSA, the Borrowers would have been required to make monthly principal installments in advance in an amount sufficient to fully amortize the Loan Facility. The Borrowers were also required to repay amounts outstanding under the Loan Facility in full immediately upon an acceleration as a result of an event of default as set forth in the LSA.

During the term of the Loan Facility, interest payable in cash by the Borrowers accrued on any outstanding balance due under the Loan Facility at a rate per annum equal to the higher of (x) the sum of four one-half percent (4.50%) plus the prime rate as published in the Wall Street Journal and (y) twelve and one-half percent (12.50%). During an event of default, any outstanding amount under the Loan Facility was to bear interest at a rate of 5.00% in excess of the otherwise applicable rate of interest. The Borrowers were required to pay certain fees with respect to the Loan Facility, including

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an upfront commitment fee, an administration fee and a prepayment premium, as well as certain other fees and expenses of the Avenue Lenders.

On February 15, 2024, we entered into the First Amendment to Loan and Security Agreement and Supplement (the "Avenue Amendment") with the Avenue Lenders. Pursuant to the Avenue Amendment, the parties agreed to include the Merger Sub and Twill as parties to our existing loan facility with the Avenue Lenders. In addition, the Avenue Amendment provided (i) that we will seek stockholder approval to reprice the warrants issued to the lenders on May 1, 2023 to permit an amendment to the exercise price of such warrants to the "minimum price" as defined by Nasdaq rules as of the closing of the Agreement and Plan of Merger (the "Twill Agreement") that we executed on February 15, 2024, with Twill, and (ii) permit the Avenue Lenders, subject to Nasdaq rules, to convert up to two million of the principal amount of its loan to us at a conversion price of $4.001 per share.

On June 25, 2024, our stockholders approved the Avenue Amendment and repricing of the Warrants to purchase up to 584,882 shares of Common Stock issued to the lenders on May 1, 2023 from an exercise price $3.334 per share, to $2.02 which was the "minimum price" as defined by Nasdaq rules as of the closing of the Twill Agreement and (ii) permit the lenders, subject to Nasdaq rules, to convert up to $2,000 of the principal amount of the outstanding Avenue Loan Facility into Borrower's unrestricted shares of our Common Stock at a conversion price of $4.001.

Pursuant to the LSA, we were obligated to maintain at least $5,000 of unrestricted cash in deposit accounts located in the United States. On April 30, 2025, the Loan Facility pursuant to the LSA was repaid in full.

On April 30, 2025, we entered into a 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 (each a "Term Loan") in which we borrowed $32.5 million at the time of closing on April 30, 2025. In addition, we may at our option draw an aggregate of up to an additional $17.5 million. $2.5 million of such additional Term Loans is subject to the achievement of certain revenue and gross margin thresholds. $15.0 million of such additional Term Loans is subject to the discretion of the Agent and the Lenders. The Credit Agreement has a five-year term that matures in April 2030.

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 or (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

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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 closing amount, we agreed to issue for each Lender a warrant to purchase 2,114,140 shares of our Common Stock, with an exercise price of $0.8278, which shall have a term of seven years from the issuance date. In addition, up to $2.5 million of the loaned amount can be converted into shares of our common stock at a price of $0.9933 per share.

As of June 30, 2025, we did not meet one of the financial covenants under the Credit Agreement. In the event the covenants are not met, interest shall accrue 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 can avoid an Event of Default (as defined in the Credit Agreement) in connection with such covenant by executing an Equity Cure (as defined in the Credit Agreement). An equity cure may be effected through the issuance of additional equity interests and/or subordinated debt, on terms and conditions reasonably satisfactory to the Agent, in an aggregate amount equal to or greater than one-hundred and fifty percent (150%) of the breached amount for the first such cure, one-hundred and seventy-five percent (175%) for the second such cure, and two-hundred percent (200%) for the third such cure (each such amount referred to as the "Minimum Cure Amount"). The Company notified Callodine of its intention to utilize an equity cure to address the event of default as defined in the Credit Agreement.

On February 15, 2024, we entered into securities purchase agreements (each, a "Series C Purchase Agreement") with accredited investors relating to an offering (the "Series C Offering") and the sale of an aggregate of (i) 17,307 shares of newly designated Series C Preferred Stock (the "Series C Preferred Stock"), and (ii) 4,000 shares of Series C-1 Preferred Stock (the "Series C-1 Preferred Stock"), at a purchase price of $1,000 for each share of Preferred Stock. In addition, on February 16, 2024, we entered into Series C Purchase Agreements with accredited investors relating to the Series C Offering and the sale of an aggregate of 1,115 shares of Series C-2 Preferred Stock (the "Series C-2 Preferred Stock" and together with the Series C Preferred Stock and the Series C-1 Preferred Stock, the "Series C Preferred Stock"), at a purchase price of $1,000 for each share of Preferred Stock. As a result of the sale of the Series C Preferred Stock, we received the aggregate gross proceeds from the Series C Offering of approximately $22,422,000. The closing of the Series C Preferred Stock, Series C-1 Preferred Stock and Series C-2 Preferred Stock occurred on or before February 21, 2024.

On December 16, 2024, we entered into securities purchase agreements (each, a "Series D Purchase Agreement"), pursuant to which we issued 7,055 and 11,750 Series D and D-1 preferred shares, respectively, at a purchase price of $1,000 per preferred share. The Series D and D-1 Preferred Stock are convertible into Common Stock at $0.73 per Common Stock. As a result of the sale of the preferred stock, the aggregate gross proceeds we received from the offering were approximately $18,805. The conversion of the preferred stock was subject to stockholder approval, the preferred stock will automatically convert into shares of Common Stock, subject to certain beneficial ownership limitations, including a non-waivable 19.99% ownership blocker, on the 12-month anniversary of the issuance date. The holders of preferred stock will also be entitled to dividends equal to a number of shares of Common Stock equal to ten percent (10%) of the number of shares of Common Stock issuable upon conversion of the preferred stock then held by such holder for each full quarter anniversary of holding for a total of four (4) quarters from the Closing Date, all issuable upon conversion of the preferred stock.

In addition, we and certain purchasers in the Offering that are 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

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previously provided in the Lock-Up Agreements until February 21, 2026 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 January 7, 2025, we entered into securities purchase agreements (each, a "Series D Purchase Agreement") with accredited investors relating to an offering (the "Series D Offering") and the sale of an aggregate of (i) 4,950 shares of newly designated Series D-2 Preferred Stock (the "Series D-2 Preferred Stock"), and (ii) 1,850 shares of Series D-3 Preferred Stock (the "Series D-3 Preferred Stock"), at a purchase price of $1,000 for each share of preferred stock. As a result of the sale of the preferred stock, the aggregate gross proceeds we received from the Series D Offering are approximately $6,800. The closing of the Series D-2 Preferred Stock, and Series D-3 Preferred Stock occurred on January 14, 2025. The conversion of the preferred stock was subject to stockholder approval. In addition, the preferred stock will automatically convert into shares of Common Stock, subject to certain beneficial ownership limitations, on the 12-month anniversary of the issuance date. The holders of preferred stock will also be entitled to dividends equal to a number of shares of Common Stock equal to ten percent (10%) of the number of shares of Common Stock issuable upon conversion of the preferred stock then held by such holder for each full quarter anniversary of holding for a total of four quarters from the Closing Date, all issuable upon conversion of the preferred stock.

On April 28, 2025, we held a special meeting of stockholders in which the stockholders approved the (A) the issuance of shares of our common stock, in excess of 20% of our issued and outstanding shares of Common Stock, upon: (i) the conversion of 25,605 shares of our Series D, D-1, D-2 and D-3 Preferred Stock into an aggregate of 33,956,850 shares of Common Stock, which were issued pursuant to private placement transactions that closed on December 18, 2024 and January 14, 2025 (the "Private Placements"), (ii) the issuance of up to 13,582,740 shares of Common Stock issuable as dividends to the Series D, D-1, D-2 and D-3 Preferred Stock; and (iii) the issuance of up to 4,175,070 shares of Common Stock issuable as share consideration provided under the Lock Up Agreements; and (B) (i) reduce the exercise price of certain warrants to purchase 584,882 shares of Common Stock issued to Avenue Venture Opportunities Fund II, L.P. and Avenue Venture Opportunities Fund, L.P. (collectively "Avenue") to $0.7208 per share, and (ii) to permit the conversion of up to two million dollars of the principal amount of the loan issued by Avenue to us at a conversion price of $0.8650 per share.

On May 20, 2025, we filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company's Series C Preferred Stock (the "Series C Certificate of Designation"), an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company's Series C-1 Preferred Stock (the "Series C-1 Certificate of Designation"), and an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company's Series C-2 Preferred Stock (the "Series C-2 Certificate of Designation", collectively with the Series C Certificate of Designation and the Series C-1 Certificate of Designation, the "Series C Certificates of Designation"), all with the Secretary of State of the State of Delaware. The Series C Certificates of Designation were amended to extend the mandatory conversion period from fifteen (15) to twenty-four (24) months from the original issue date. We will issue a dividend equal to fifteen percent (15%) of the number of shares of Common Stock issuable upon conversion of the Series C Preferred Stock, Series C-1 Preferred Stock and/or Series C-2 Preferred Stock then held by such holder for each full quarter anniversary of holding following the filing of the Series C Certificates of Designation with the Secretary of State of the State of Delaware.

There are no assurances 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.

As such, we have a significant present need for capital. If we are unable to scale up our commercial launch of our products or meet our commercial sales targets (or if we are unable to generate any revenue at all), and if we are unable to obtain additional capital resources in the near term, we may be unable to continue activities absent material alterations in our business plans and our business might fail. We believe that our current cash on hand will not be sufficient to fund our projected operating requirements for a period of one year from the issuance of these financial statements. These conditions raise substantial doubt about our ability to continue as a going concern.

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.

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#### Cash Flows
The following table sets forth selected cash flow information for the periods indicated:

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| | | |
|:---|:---|:---|
|  | **June 30,**  | **June 30,**  |
|  | **2025** | **2024** |
|  | **$** | **$** |
| Cash used in operating activities: | (12704) | (24473) |
| Cash used in investing activities: | (75) | (8881) |
| Cash provided by financing activities: | 6939 | 20206 |
|  | (5840) | (13148) |

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*Net cash used in operating activities*

Net cash used in operating activities was $12,704 for the six months ended June 30, 2025, a decrease of 48.1% compared to $24,473 used in operations for six months period ended June 30, 2024. Cash used in operations decreased mainly due to the decrease in our operating expenses and mainly due to efficiency and post merge integration activities.

*Net cash used in investing activities*

Net cash used in investing activities was $75 for the six months ended June 30, 2025, compared to $8,881 net cash used in investing activities during the same period in 2024. The decrease is due to the acquisition of Twill during the six months ended June 30, 2024, compared to the same period in 2025.

*Net cash provided from financing activities*

Net cash derived from financing activities was $6,939 for the six months ended June 30, 2025, compared to $20,206 net cash used by financing activities during the same period in 2024. The decrease is mainly due to proceeds from the issuance of preferred shares in the six months ended June 30, 2024, compared to the six months ended June 30, 2025.

#### 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 June 30, 2025, 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 June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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*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, 2024, which could materially affect our business, financial condition, or future results.

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, 2024, except as noted below.

***Currently, our revenues are concentrated with a major customer, and our revenues may decrease significantly if we were to lose our major customer.***

Due to our limited operating history, we have a limited customer base and have depended on a major customer for a significant portion of our revenue. As of June 30, 2025, our major customer accounted for 16.4% of our accounts receivable balance and, for the three and six month periods ended June 30, 2025, the customer accounted for 9.3 and 10.6%, respectively, of our revenue. If the customer were to terminate the agreement, or if we fail to adequately perform under the agreement, and if we are unable to diversify our customer base, our revenue could decline, and our results of operations could be adversely affected.

***Some of our principal executive officers and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel, including the multi front war Israel is currently facing.***

Some of our executive officers and offices are located in Israel. In addition, most of our executive officers are residents of Israel, although the majority of our employees are located outside of Israel. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its Arab neighbors. In October 2023, Hamas terrorists infiltrated Israel's southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Since the commencement of these events, there had been additional active hostilities against Israel, including Hezbollah in Lebanon, the Houthis terrorist group which controls parts of Yemen, and Iran. Such clashes may escalate in the future into a greater regional conflict.

In April 2024 and October 2024, Iran launched direct attacks on Israel involving hundreds of drones and missiles and has threatened to continue to attack Israel. On June 13, 2025, in light of continued nuclear threats and intelligence assessments indicating imminent attacks, Israel launched a preemptive strike directly targeting military and nuclear infrastructure inside Iran aimed to disrupt Iran's capacity to coordinate or launch further hostilities against Israel, as well as disrupt its nuclear program. On June 21, 2025, the United States military conducted targeted air strikes against three nuclear sites within Iran and on June 23, 2025 Iran retaliated against U.S. interests in the region. On June 24, 2025, a ceasefire was implemented between Iran and Israel and, as of August 11, 2025, still remains in place. Nonetheless, hostilities between Iran and Israel and the United States may resume in the near future, which could create significant volatility in the global economy as well as disruptions to global supply chains.

Furthermore, certain of our employees may be obligated to perform annual reserve duty in the Israel Defense Forces and are subject to being called up for active military duty at any time. Many Israeli citizens who have served in the army are required to perform reserve duty until they reach the age of 40 or older, depending upon the nature of their military service. None of our executive officers have been called up for active military duty.

Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages.

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***We believe our current cash on hand will not be sufficient to fund our projected operating requirements for a period of one year from the issuance of these interim financial statements. This raises substantial doubt about our ability to continue as a going concern.***

We believe that our current cash on hand will not be sufficient to fund our projected operating requirements for a period of one year from the issuance of our interim financial statements. This raises substantial doubt about our ability to continue as a going concern and could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise. If we cannot continue as a going concern, our investors may lose their entire investment in our securities. Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through debt or equity financing. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our products.

***Significant changes or developments in U.S. laws or policies, including changes in U.S. trade policies and tariffs and the reaction of other countries thereto, may have a material adverse effect on our business and financial statements.***

Significant changes or developments in U.S. laws and policies, such as laws and policies surrounding international trade, foreign affairs, manufacturing and development and investment in the territories and countries where we or our customers operate, can materially adversely affect our business and financial statements. Tariffs imposed by the U.S. government, may increase the cost of certain raw materials and components used in our hardware. If these tariffs remain in place or are expanded, or if new trade restrictions are implemented, our manufacturing costs could increase, which could materially and adversely affect our margins and financial results.

To date we have faced timeline extensions in certain projects due to tariff-related pressures, which impacted both hardware sourcing and partner-side execution. Some of our medical devices and hardware components are manufactured in China, and several potential partners have been similarly affected, resulting in prolonged decision-making cycles and implementation delays.

Furthermore, changes in trade policy have increased uncertainty in our industry, and any escalation in trade tensions could disrupt our supply chain, delay production timelines, or require costly modifications to sourcing and logistics strategies. The extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our service in affected markets.

***We may be in breach of certain debt covenants, and our failure to maintain compliance could materially and adversely affect our financial condition, ability to access capital, and business operations.***

As of June 30, 2025, we did not meet one of the financial covenants under the Credit Agreement. In the event covenants in the Credit Agreement are not met, interest shall accrue to 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. The Company notified Callodine of its intention to utilize an equity cure to address the event of default as defined in the Credit Agreement. While we are in ongoing discussions with the lender regarding the terms of the Credit Agreement, there can be no assurance that in the future we will obtain any relief on favorable terms or at all.

Moreover, our ability to remain in compliance with financial and other covenants in our existing or future credit agreements depends on our operating performance, which is subject to various risks and uncertainties. If we are unable to generate sufficient cash flows, raise capital on acceptable terms, or obtain further covenant waivers or amendments when needed, we may be forced to delay or curtail strategic initiatives, reduce expenditures, or pursue alternative financing arrangements that may be dilutive to shareholders or less favorable to us.

[**Table of Contents**](#TOC)

***The market price of our common stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our control.***

The market price of our common stock has fluctuated, and may continue to fluctuate, widely, due to many factors, some of which may be beyond our control. These factors include, without limitation:

● "short squeezes";

● comments by securities analysts or other third parties, including blogs, articles, message boards and social and other media;

● large stockholders exiting their position in our securities or an increase or decrease in the short interest in our securities;

● actual or anticipated fluctuations in our financial and operating results;

● changes in foreign currency exchange rates;

● the commencement, enrollment or results of our planned or future clinical trials of our product candidates or those of our competitors;

● the success of competitive drugs or therapies;

● regulatory or legal developments in the United States and other countries;

● the success of competitive products or technologies;

● developments or disputes concerning patent applications, issued patents or other proprietary rights;

● the recruitment or departure of key personnel;

● the level of expenses related to our product candidates or clinical development programs;

● litigation matters, including amounts which may or may not be recoverable pursuant to our officer and director insurance policies, regulatory actions affecting us and the outcome thereof;

● the results of our efforts to discover, develop, acquire or in-license additional product candidates;

● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

● disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;

● significant lawsuits, including patent or stockholder litigation;

● variations in our financial results or those of companies that are perceived to be similar to us;

● market conditions in our market sector;

[**Table of Contents**](#TOC)

● general economic, political, and market conditions and overall fluctuations in the financial markets in the United States and abroad; and

● investors' general perception of us and our business.

Stock markets in general and our stock price in particular have recently experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies and our company. For example, the closing sale prices of our Common Stock from January 1, 2025 through August 10, 2025, ranged from a high of $1.53 per share (on January 7, 2025) to a low of $0.53 per share (on August 7, 2025). During that time, we have not experienced any material changes in our financial condition or results of operations that would explain such price volatility or trading volume; however, we have sold equity which was dilutive to existing stockholders. These broad market fluctuations may adversely affect the trading price of our securities. Additionally, these and other external factors have caused and may continue to cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent our stockholders from readily selling their shares of our common stock and may otherwise negatively affect the liquidity of our common stock.

In addition, if the stock price of our common stock continues to trade at its current level, it may imply as a negative indicator of the valuation of our intangible assets and our goodwill, which could result in an impairment for these assets.

***Nasdaq may delist our securities from trading on its exchange, which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions.***

On September 16, 2024, we received a written notice from the Nasdaq Stock Market LLC ("Nasdaq") indicating that we are not in compliance with Nasdaq Listing Rule 5550(a)(2), as our closing bid price for our common stock was below $1.00 per share for the last 30 consecutive business days. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we have been granted a 180-calendar day compliance period, or until March 17, 2025, to regain compliance with the minimum bid price requirement. On March 18, 2025, we received a letter from Nasdaq approving an extension of an additional 180 calendar days to regain compliance with the minimum bid price requirement, or until September 15, 2025.

If at any time during the additional compliance period, the bid price of our Common Stock closes at or above $1.00 per share for a minimum of ten (10) consecutive trading days, Nasdaq will provide us with written confirmation of compliance with the minimum bid price requirement and the matter will be closed. If we do not regain compliance within the additional compliance period or do not comply with the terms of the extension, Nasdaq will provide notice that our securities will be delisted from The Nasdaq Capital Market.

We intend to continuously monitor the closing bid price for our Common Stock and are in the process of considering various measures to resolve the deficiency and regain compliance with the minimum bid price requirement, including a stock split, if necessary. However, there can be no assurance that we will be able to regain compliance with the minimum bid price requirement, even if it maintains compliance with the other Nasdaq listing requirements.

[**Table of Contents**](#TOC)

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds** 

During the second quarter of 2025, the Company issued an aggregate of 525,000 shares of the Company's common stock to certain service providers as compensation in lieu of cash compensation owed to them for services rendered.

The Company 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.

#### Item 5. Other Information.
**On August 8, 2025, the Company filed a Certificate of Amendment to the Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware, pursuant to which the Company increased the number of authorized shares of common stock from 160,000,000 to 400,000,000 (the "Authorized Capital Change"). The Authorized Capital Change took effect at 5:30 p.m., on August 8, 2025.** 

The Board of Directors approved the Authorized Capital Change on May 19, 2025 and the Company's stockholders approved the Authorized Capital Change on July 23, 2025.

[**Table of Contents**](#TOC)

#### Item 6. Exhibits.

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| | |
|:---|:---|
| **No.** | **Description of** <br>**Exhibit**  |
| 3.1\* | [Certificate of Amendment to the Company's Certificate of Incorporation, dated August 8, 2025](drio-20250630xex3d1.htm) |
| 3.2 | [Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series C Preferred Stock of DarioHealth Corp. (incorporated by reference to Exhibit 3.1 filed with the Company's Current Report on Form 8-K filed on May 21, 2025)](https://www.sec.gov/Archives/edgar/data/1533998/000110465925051292/tm2515738d1_ex3-1.htm) |
| 3.3 | [Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series C-1 Preferred Stock of DarioHealth Corp. (incorporated by reference to Exhibit 3.2 filed with the Company's Current Report on Form 8-K filed on May 21, 2025)](https://www.sec.gov/Archives/edgar/data/1533998/000110465925051292/tm2515738d1_ex3-2.htm) |
| 3.4 | [Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series C-2 Preferred Stock of DarioHealth Corp. (incorporated by reference to Exhibit 3.3 filed with the Company's Current Report on Form 8-K filed on May 21, 2025)](https://www.sec.gov/Archives/edgar/data/1533998/000110465925051292/tm2515738d1_ex3-3.htm) |
| 3.5 | [Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series A-1 Preferred Stock of DarioHealth Corp. (incorporated by reference to Exhibit 3.1 filed with the Company's Current Report on Form 8-K filed on May 29, 2025)](https://www.sec.gov/Archives/edgar/data/1533998/000110465925054236/tm2516457d1_ex3-1.htm) |
| 3.6 | [Third Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series B-1 Preferred Stock of DarioHealth Corp. (incorporated by reference to Exhibit 3.2 filed with the Company's Current Report on Form 8-K filed on May 29, 2025)](https://www.sec.gov/Archives/edgar/data/1533998/000110465925054236/tm2516457d1_ex3-2.htm) |
| 10.1 | [Form of Amended and Restated Lock-Up Agreement (incorporated by reference to Exhibit 10.1 filed with the Company's Current Report on Form 8-K filed on May 29, 2025)](https://www.sec.gov/Archives/edgar/data/1533998/000110465925054236/tm2516457d1_ex10-1.htm) |
| 31.1\* | [Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a).](drio-20250630xex31d1.htm) |
| 31.2\* | [Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a).](drio-20250630xex31d2.htm) |
| 32.1\*\* | [Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350.](drio-20250630xex32d1.htm) |
| 32.2\*\* | [Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.](drio-20250630xex32d2.htm) |
| 101.1\* | The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Loss, (iii) Statements of Changes in Stockholders' Deficiency, (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.

˄ Certain identified information in the exhibit has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to DarioHealth Corp. if publicly disclosed.

[**Table of Contents**](#TOC)

#### 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: August 12, 2025 |  | **DarioHealth Corp.** | **DarioHealth Corp.** |
|  | By: | /s/ Erez Raphael | /s/ Erez Raphael |
|  |  | Name: | Erez Raphael |
|  |  | Title: | Chief Executive Officer (Principal Executive Officer) |
|  | By: | /s/ Chen Franco-Yehuda | /s/ Chen Franco-Yehuda |
|  |  | Name: | Chen Franco-Yehuda |
|  |  | Title: | Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer) |

---

## Exhibit 3.1

**Exhibit 3.1**

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Delaware** | Page 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The First State |  |

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***I, CHARUNI PATIBANDA-SANCHEZ, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF "DARIOHEALTH CORP.", FILED IN THIS OFFICE ON THE EIGHTH DAY OF AUGUST, A.D. 2025, AT 10:36 O`CLOCK A.M.***

***AND I DO HEREBY FURTHER CERTIFY THAT THE EFFECTIVE DATE OF THE AFORESAID CERTIFICATE OF AMENDMENT IS THE EIGHTH DAY OF AUGUST, A.D. 2025 AT 5:30 O'CLOCK P.M.***

---

| | | |
|:---|:---|:---|
| 5023353 8100<br>SR# 20253613871 | ![Graphic](drio-20250630xex3d1001.gif) | ![Graphic](drio-20250630xex3d1002.jpg) |
| 5023353 8100<br>SR# 20253613871 | ![Graphic](drio-20250630xex3d1001.gif) | Authentication: 204425129<br>Date: 08-08-25 |
| You may verify this certificate online at corp.delaware.gov/authver.shtml | You may verify this certificate online at corp.delaware.gov/authver.shtml | You may verify this certificate online at corp.delaware.gov/authver.shtml |

---

------

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State of Delaware<br>Secretary of State<br>Division of Corporations<br>Delivered 10:36 AM 08/08/2025<br>FILED 10:36 AM 08/08/2025<br>SR 20253613871 - File Number 5023353 | <br>**CERTIFICATE OF AMENDMENT**<br>**OF**<br>**CERTIFICATE OF INCORPORATION**<br>**OF**<br>**DARIOHEALTH CORP.** |

---

DarioHealth Corp., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the **"Corporation"),** does hereby certify that:

FIRST: The name of the Corporation is DarioHealth Corp.

SECOND: This Certificate of Amendment (this **"Certificate of Amendment")** amends the provisions of the Corporation's Certificate of Incorporation, as amended, and any amendments thereto (the **"Certificate of Incorporation"),** last amended by a certificate of amendment to the Certificate of lncorporation filed with the Secretary of State on November 14, 2019.

THIRD: The first sentence of Article Fourth, Section 1 of the Certificate of Incorporation is hereby amended to read in its entirety as set forth below:

"Fourth: The total amount of stock that this corporation is authorized to issue is 405,000,000 shares, par value $0.0001 per share, of which 400,000,000 shares shall be common stock, par value $0.0001 per share (the "Common Stock"), and 5,000,000 shares shall be designated as preferred stock, par value $0.0001 per share (the "Preferred Stock")."

FOURTH: This amendment was duly adopted in accordance with the provisions of Sections 212 and 242 of the General Corporation Law of the State of Delaware.

FIFTH: This Certificate of Amendment shall be effective as of 5:30 p.m. New York Time on August 8, 2025.

SIXTH: All other provisions of the Certificate of Incorporation shall remain in full force and effect.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its officer thereunto duly authorized on this 8<sup>th</sup> day of August, 2025.

[*Signature Page Follows]*

DarioHealth Corp.- Amendment to Certificate of Incorporation to Amend Authorized Capital Shares (July 2025) 4909-8805-4617 v.4 - 8/5/2025 5:07 PM

------

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| | |
|:---|:---|
| **DARIOHEALTH CORP.** | **DARIOHEALTH CORP.** |
| **By:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;![Graphic](drio-20250630xex3d1003.jpg) |
|  | Name: Chen Franco-Yehuda |
|  | Its: Chief Financial Officer |

---

DarioHealth Corp.- Amendment to Certificate of Incorporation to Amend Authorized Capital Shares (July 2025) 4909-8805-4617 v.4 - 8/5/2025 5:07 PM

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## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a)**

**UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED**

I, Erez Raphael, certify that:

1. I have reviewed this quarterly report on Form 10-Q of DarioHealth Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 12, 2025

---

| |
|:---|
| /s/ Erez Raphael |
| Erez Raphael |
| Chief Executive Officer |
| (Principal Executive Officer) |

---

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## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a)**

**UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED**

I, Chen Franco-Yehuda, certify that:

1. I have reviewed this quarterly report on Form 10-Q of DarioHealth Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 12, 2025

---

| |
|:---|
| /s/ Chen Franco-Yehuda |
| Chen Franco-Yehuda |
| Chief Financial Officer, Secretary and Treasurer |
| (Principal Financial Officer) |

---

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## Exhibit 32.1

**Exhibit 32.1**

**DARIOHEALTH CORP.**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350**

In connection with the quarterly report of DarioHealth Corp., or the Company, on Form 10-Q for the period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof, or the Report, I, Erez Raphael, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Erez Raphael |
| Erez Raphael |
| Chief Executive Officer |
| (Principal Executive Officer) |
| August 12, 2025 |

---

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## Exhibit 32.2

**Exhibit 32.2**

**DARIOHEALTH CORP.**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350**

In connection with the quarterly report of DarioHealth Corp., or the Company, on Form 10-Q for the period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof, or the Report, I, Chen Franco-Yehuda, Chief Financial Officer, Secretary and Treasurer, certify, pursuant to 18 U.S.C. Section 1350, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| |
|:---|
| /s/ Chen Franco-Yehuda |
| Chen Franco-Yehuda |
| Chief Financial Officer, Secretary and Treasurer |
| (Principal Financial Officer) |
| August 12, 2025 |

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