DarioHealth faces Nasdaq delisting over share price rule

DarioHealth Corp. (NASDAQ:DRIO), a provider of medical instruments and apparatus, has been notified by the Nasdaq Stock Market LLC of non-compliance with the exchange's minimum bid price requirement. The company's shares have closed below the $1.00 threshold for 30 consecutive business days as of September 16, 2024.

The Nasdaq's notice grants DarioHealth a 180-day period, until March 17, 2025, to regain compliance. During this time, the company's stock will remain listed on the Nasdaq Capital Market. The stipulation for compliance requires the company's common stock to have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days.

Should DarioHealth fail to meet the requirement by the deadline, it may be eligible for a second 180-day grace period, contingent upon meeting all other initial listing standards except for the bid price. The company would need to communicate its intent to rectify the bid price shortfall during this additional time frame.

The possibility of delisting will loom if DarioHealth does not achieve compliance within the given periods, including any extension granted by Nasdaq. The company has expressed its intention to monitor its stock's closing bid price and to explore options to address the non-compliance with the minimum bid price rule. However, there is no certainty that DarioHealth will be successful in regaining compliance or fulfilling other Nasdaq listing criteria.

In other recent news, DarioHealth Corp. has reported strong growth in its B2B2C business, contributing 75% of total revenue, a 60% sequential increase from Q1 to Q2. The acquisition of Twill also played a significant role in bolstering the company's revenue. Aiming for profitability by the end of 2025, DarioHealth anticipates a 40% reduction in non-GAAP operating expenses from Q1 2024 to Q1 2025.

These developments are part of a strategic focus on refining operations, enhancing pharma collaborations, and leveraging cross-selling opportunities. DarioHealth's AI integration and comprehensive platform, which covers six different conditions, are key to its growth strategy.

The company expects over 50% revenue growth for the year and plans to become cash flow positive by the end of next year. Despite a one-time price concession of $1.1 million to a strategic partner, DarioHealth remains confident in its financial trajectory. The recent appointment of a Chief Commercial Officer is expected to accelerate revenue growth. These are recent developments in DarioHealth's strategic growth plan.

InvestingPro Insights

As DarioHealth Corp. (NASDAQ:DRIO) navigates the challenges of Nasdaq compliance due to its stock price dip, a closer look at the company's financial health through InvestingPro data reveals a nuanced picture. With a market capitalization of $29.13 million, DarioHealth's valuation metrics such as the negative P/E ratio of -0.9 and an adjusted P/E ratio for the last twelve months as of Q2 2024 at -0.83, indicate that investors have concerns about the company's profitability. The company's revenue has decreased by 28.11% over the last twelve months as of Q2 2024, highlighting the challenges it faces in a competitive market.

Despite these setbacks, DarioHealth's gross profit margin remains strong at 55.03%, suggesting that while revenue has declined, the company maintains a degree of efficiency in its cost of goods sold. Additionally, the company's liquid assets exceed its short-term obligations, which may provide some financial stability in the short term. This information is particularly relevant for investors considering the company's strategy to address its stock price and maintain its listing on the Nasdaq.

InvestingPro Tips for DarioHealth also indicate that analysts do not anticipate the company will be profitable this year and that valuation implies a poor free cash flow yield. These insights, along with over 5 additional tips available on InvestingPro, could prove valuable for investors looking to make informed decisions about the company's future.

For those closely monitoring the situation, the next earnings date is set for November 11, 2024. With the current share price at $1 and an InvestingPro fair value estimate of $1.31, investors may want to weigh the potential risks and opportunities as DarioHealth strives to meet Nasdaq's requirements.

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