DarioHealth, a digital chronic condition management platform, closed a $25.6 million private placement of convertible preferred stock, with most of the funds secured from existing shareholders. 

The balance of the funds was provided by a network of accredited healthcare investors and executives from within the healthcare sector.

Private placement is a way for a company to sell debt or equity securities to a small number of investors. It is an alternative to selling securities publicly. The placement can include preferred stock, common stock and other methods of interests, including warrants, hedge fund interests, promissory notes, debentures and bonds.

The offering is expected to expand Dario's cash runway and strengthen its financial position in order for it to continue executing its current strategic plan, which includes realizing an operational cash-flow-positive run rate by the end of 2025 while at the same time continuing to build high-margin, scalable recurring revenues across B2B and pharma channels. 

Accordingly, the company's proforma cash balance, including the proceeds from the private placement, is $40.6 million as of the end of the third quarter of 2024. The private placement closed on December 18, 2024, and January 14, 2025.

In a statement, DarioHealth said that pursuant to the equity offering, the company issued shares of newly designated convertible preferred stock. 

"18,805 shares of preferred stock were sold at $1,000 per share, with a conversion price of $0.73 and 6,800 shares of preferred stock were sold at $1,000 per share, with a conversion price of $0.83," the company said in a statement. 

"Through the end of 2024, we demonstrated the strong execution of our multi-year strategic plan to become a profitable provider of comprehensive chronic care management solutions," Erez Raphael, CEO of Dario, said.

"Today, we are happy to announce the completion of a major milestone in this strategic plan that we believe can secure our projected operational cash flow positive run rate by the end of 2025. I believe that the ongoing cost optimization efforts following the Twill merger, coupled with steady revenue growth across multiple channels, have set us on a path to success."

THE LARGER TREND

Earlier this month, DarioHealth expanded its GLP-1 offering with prescribing capabilities, a move the company said will help it capture a larger share of the weight-loss market space.

The company also announced a collaboration with MediOrbis, a multispecialty digital health provider, to add prescribing capabilities to Dario’s GLP-1 behavior change tool for a comprehensive medical weight loss program. 

In February of 2024, DarioHealth acquired Twill, a digital therapeutics company, accompanied by $22.4 million equity financing. DarioHealth integrated Twill's condition-specific communities and peer groups with customized navigation expertise into its cardiometabolic platform.

That same year, the company collaborated with an unnamed pharma company that leveraged DarioConnect (formerly Twill Care) to advance its direct-to-consumer initiatives using Dario's engagement and navigation technologies. 

In October, DarioHealth contracted with a national Medicare Advantage health plan and launched its behavioral health initiative, Twill by Dario. Dario's platform and tools provides data analytics and one-on-one coaching for several health conditions, including diabetes, hypertension, weight management, musculoskeletal pain and behavioral health.