DarioHealth amends preferred stock terms to accelerate conversions

DarioHealth Corp. (NASDAQ:DRIO), a digital therapeutics company currently valued at $15.43 million, announced changes to the rights of its preferred stockholders this week, according to a statement filed with the Securities and Exchange Commission. According to InvestingPro data, the company has been facing significant challenges, with its stock down over 67% in the past year.

On Thursday, the company filed amended and restated certificates of designation for several series of its preferred stock, including Series A-1, Series C, Series C-2, Series D, Series D-1, Series D-2, and Series D-3, following approval from both its board of directors and a majority of the holders of the affected classes. These changes come as InvestingPro analysis shows the company is quickly burning through cash, with negative free cash flow of $26.92 million in the last twelve months.

The amendments to the Series C and Series D certificates accelerate the mandatory conversion of all outstanding shares of those series into shares of DarioHealth’s common stock, or, at each holder’s election, into pre-funded warrants. The changes took effect Thursday.

For Series A-1 preferred stockholders, the amended certificate provides the option to receive pre-funded warrants instead of common stock upon conversion.

As part of the mandatory conversion process, each preferred stockholder will receive all accrued and unpaid dividends, including any dividend shares or payment-in-kind shares, in addition to the shares issuable upon conversion. These distributions are subject to beneficial ownership limits as specified in the filings.

The company stated that no new securities were issued or sold in connection with these amendments, which were intended solely to restate and amend the terms of the affected preferred stock series.

This information is based on a press release statement included in DarioHealth’s recent SEC filing.

In other recent news, DarioHealth Corp has released its second-quarter 2025 earnings, showcasing a notable earnings per share (EPS) of $0.18, which significantly surpassed the anticipated EPS of -$0.20. Despite this positive earnings surprise, the company’s revenue did not meet expectations, coming in at $5.37 million, below the forecasted $7.12 million. The revenue shortfall was attributed to a previously known client departure, lost revenue from a strategic partner, and slower-than-expected activation of new contracts.

In response to these results, Stifel has adjusted its price target for DarioHealth from $1.50 to $1.25, though it continues to maintain a Buy rating on the stock. The lack of forward guidance from the company has added to investor uncertainty. These developments reflect ongoing challenges in the company’s growth strategy. Despite the EPS success, the revenue miss has raised concerns among investors and analysts alike. These recent updates underscore the mixed performance of DarioHealth in the second quarter.

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