What changed in this filing

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Item 1. Business

2022-03-22 compared with 2021-03-09 · 520 added, 905 removed, 96 unchanged (94% of the section changed)

We are a leading global

Digital Therapeutics (“DTx”) company revolutionizing the way people manage their health across the chronic condition

spectrum to live a better and healthier life.

Our mission is to transform how affected individuals manage their health and chronic

conditions by empowering our customers to easily manage their conditions and take steps to improve their overall health.

conditions are driven by personal behaviors and the individual actions that are or are not taken.

We believe that changing these

behaviors can dramatically improve our customers’

overall health and substantially reduce unnecessary health spending.

behavioral change and habit formation are difficult, especially in managing chronic disease and related conditions.

therapeutics endeavor to produce lasting behavior changes in our customers by applying a novel combination of artificial intelligence

(“AI”)-driven dynamic personalization and behavioral science at scale.

This allows us to engage and support our customers,

and offer them a complete virtual care solution, ideally resulting in improved health outcomes and reduced total cost of care.

principal operating subsidiary, LabStyle Innovation Ltd., is an Israeli company with its headquarters in

Caesarea, Israel.

We were formed on August 11, 2011, as a Delaware corporation with the name LabStyle Innovations

On July 28, 2016, we changed our name to DarioHealth Corp.

We began our sales in the direct-to-consumer space,

solving first for what we deemed the most difficult problems:

how to engage users and support behavior change to improve

clinical outcomes in diabetes.

Our most developed AI tools leverage the direct-to-consumer experience from over 150,000

members to drive superior engagement and outcomes.

In early 2020, we broadened our solutions to include other medical

conditions in addition to diabetes, and to serve business customers who seek to improve the health of their stakeholders.

Presently, we have deployed solutions for diabetes, hypertension, and pre-diabetes, and through our acquisition of Upright

Technologies Ltd.

(“Upright”), we now offer solutions for musculoskeletal (“MSK”) conditions.

We are currently

delivering B2B2C solutions for providers, employers, and pharmaceutical companies, and we plan to develop a full-risk health

plan business, which we expect will provide our AI driven, remote patient monitoring (“RPM”) and coaching

for a variety of chronic conditions, across a range of customer product lines in 2021.

Upright Technologies

Ltd., which we acquired in February 2021, is a leading digital MSK health company focused on preventing and treating the most

common MSK conditions through behavioral science, biofeedback, coaching, and wearable tech.

Upright has over 90,000 active users

and its clinically validated solution is recommended by more than 500 clinics worldwide.

In-market first-generation

digital health solutions offer static or nominal personalization at best, integrating signals to customize nudges or personalize

communications in a manner that does not significantly adapt to changing user needs over time, while user journey’s, or experiences,

remain fairly static.

First generation solutions generally lack user experience benefit of insight from tens of thousands of direct-to-consumer

engagements over years that adaptively personalize user journeys for high engagement and outcomes.

These solutions are often described

as “fingerprinted,”

but while fingerprints don’t change over time, users do.

As a result, any static or minimally

dynamic approaches are not sufficiently customized to address user needs.

Market intelligence

confirms that enterprise customers are frustrated by existing solutions with static user journeys, limited transparency, inability

to integrate with existing technologies and workflows, low engagement and retention and challenges with flexible deployments.

customers want a single solution for most-major chronic conditions, others wish to deploy piecemeal solutions or may have already

invested in solutions for a portion of their populations.

Health systems and health plans have invested significantly in their

technology and digital strategy and require solutions that interoperate with their existing and planned deployments.

First generation

digital health solutions that have piloted with complex customers such as health plans have been forced to pivot their business

strategies to employers and others owing to enrollment, integration, return on investment and reporting challenges.

Our solutions

are designed from the ground-up for integration, can be deployed for single or multiple conditions, deliver behavioral-science

informed dynamically personalized and integrated user journeys, deliver clear returns on investment in required time horizons and

allow for real-time granulated customer reporting.

Unlike other digital

health solutions, we also personalize user experience beyond nudges.

Healthcare journeys and pathways must be individualized, informed

by behavioral science, and dynamically responsive to drive engagement and outcomes.

Customized, dynamic user journeys are delivered

by our AI-driven journey engine, the “Dario Loop”

(formerly called Dario Intelligence), which personalizes user experience

across a range of factors including timing, tone, channel, content, frequency, and intervention.

We believe that our dynamic personalized

approach ensures superior engagement and retention, reduced costs, and ultimately, improved user health.

This is reflected in our

user experience feedback, with an unparalleled 4.9 out of 5 stars across more than 15 thousand reviews in the Apple App Store,

a best-in-class net promoter score of 76, and industry-leading, published improvements in clinical metrics such as estimated glucose

monitoring (“HbA1c”), hypertension (“HTN”), pain and health-related quality of life.

Our Solutions

We offer a customized,

user-centric, modular platform integrating digital therapeutics, coaching, devices, and care providers.

Our suite of offerings

includes Dario Tools, which are devices that integrate with applications on a user’s smartphone, DarioEngage, a population

health management platform (“DarioEngage”), and the Dario Loop, our AI-driven journey engine.

Our platform is designed

for integration across a range of devices including partner devices.

Our digital architecture and user experience can easily integrate

with partnered devices such as continuous glucose monitor (“CGM”) and other remote patient monitoring devices.

example, we recently partnered with one of the “big 4”

diabetes companies to integrate their meter as well in certain

commercial deployments.

We are revolutionizing how people with chronic conditions manage their health through the innovation of a new category of digital health:

Digital Therapeutics as a Service (DTaaS).

We believe that our innovative approach to digital therapeutics disrupts the traditional provider-centered system of health care delivery by offering user-centric care that is continuous, customized and multi-condition.

Our solutions combine the power of technologies and behavior science to make better health accessible, affordable, and easy for all by solving for what people need, when and where they want it, with hyper-personalized care that is always connected – to services, devices, and people – and delivered continuously.

This is how we deliver meaningful and sustainable results that result in measurable value for all stakeholders, supporting the full transformation of health care into a more effective and affordable ecosystem.

Market Environment

The United States health care industry is becoming increasingly inefficient, incurring higher, unsustainable health care costs while the chronic conditions that it seeks to address continue to worsen.

According to the Centers of Medicare and Medicaid Services (CMS), the U.S.

spent $4.1 trillion on health care in 2020, with 75% of the costs attributed to care for chronic conditions.

We believe that addressing the cost challenges in chronic condition management will require three main shifts.

First, the market must shift from a provider-centric approach to a consumer centric approach, embracing the transformative effects of consumerization as a means to engage more patients in their own treatment to scale effective chronic condition management.

This consumerization of health care will change how people experience care, create new opportunities to engage people and help them change their behaviors for better health and lower cost of care.

Second, the digitalization of health will enable scale by connecting patients to health care professionals and payers, giving patients access to care for their health between provider visits and shifting healthcare from episodic to continuous care.

Telehealth addresses the synchronous portion of the problem, while digital health provides continuous support at scale.

Finally, value-driven care should become the standard.

In fact, performance-based models are already becoming a reality as the industry reckons with unsustainable costs and growing demands for transparency, creating pressure on stakeholders to find solutions that will address poor health and lower costs of care.

We began as a direct-to-consumer digital therapeutics company, solving first for the problem of how to engage users and support behavior change to improve clinical outcomes in diabetes.

In the last two years, we made two strategic shifts to transform our business:

first, we significantly expanded commercial growth opportunities by adding a business-to-business product (B2B) and a commercial team alongside the legacy direct-to-consumer channel.

In addition, we began targeting three traditional health business verticals – health plans, employers, and provider groups.

As a result, we believe that our new B2B business now leverages our consumer-centric capabilities as a competitive advantage.

Second, we transitioned from a single condition platform to a multi-condition platform, creating a robust suite of solutions to address the five most commonly co-occurring and expensive chronic conditions, which are also representative of some of the most sought-after digital health solutions:

diabetes, hypertension, pre-diabetes/weight management, musculoskeletal and behavioral health.

After building weight loss and hypertension management into the legacy diabetes platform, we made three acquisitions in order to expand into musculoskeletal and behavioral health.

Our acquisition of Upright Technologies Ltd.

(“Upright”) in early 2021 and Physimax in early 2022 enables our musculoskeletal (“MSK”) solutions – “Dario Move.”, our digital behavioral health capabilities were secured through the acquisition of PsyInnovations, Inc.

(dba wayForward) in mid-2021.

We believe a key success factor is our ability to integrate multiple chronic conditions into a single digital therapeutics platform, the “Dario One.” During 2021 we successfully won contracts in all three B2B business segments, including several contracts for Dario One, creating a compounding effect as more members enroll and many in multiple programs.

The combination of moving from direct-to-consumer to the enterprise business market (B2B2C) and expanding from a single condition to multi condition platform, created multiple commercial growth engines as well as a multiplying impact that we believe will improve our financial profile by increasing potential revenue per account and per user.

Recent Developments

Agreement with a Leading Employer Benefits Brokerage

In December 2021, we announced that we entered into a strategic partnership with a leading employer benefits brokerage (the “Partner”) to sell its digital therapeutic solutions for diabetes, hypertension and musculoskeletal health as part of a new premier employee health benefits product for small businesses.

The product has been made available to the Partner's more than 2,300 clients since early 2022.

Employer Contracts and Health Providers

Dario closed 2021 with a total of 54 new contracts in its first full year of selling digital therapeutics in the business-to-business market.

We have a range of health plans, providers and employers taking advantage of our digital therapeutics platform designed to address the most common chronic conditions:

diabetes, hypertension, weight management, musculoskeletal, and behavioral health.

In January 2022, we announced two new contracts with a large U.S.

northeast regional employer in the finance industry set to deploy the Company's full suite of solutions, and a northeast regional employer in the food industry contracted to deploy the Company's digital therapeutic solution for diabetes.

In January 2022, we also announced that we have contracted with a large regional health plan provider to deliver its digital therapeutic solution for diabetes for eligible U.S.

Medicaid members in and around the mid-Atlantic region.

The contract is expected to contribute to revenue beginning in the second quarter of 2022.

In addition, in February 2022, we announced several new contracts to deliver the Company’s digital therapeutics solutions for four new employers.

The new accounts are expected to launch during the first and second quarters of 2022.

The new clients include a northeast regional employer contracted for the Company's diabetes solution and three employers - including two educational organizations and a regional professional services firm - launching with the Company's behavioral health solution.

In March 2022, we also announced new agreements with a regional employer and a regional provider.

The new employer client will deploy Dario's digital behavioral solution to improve access to outcomes-based care, and the new provider contract will deliver both diabetes and hypertension solutions to patients.

The contracts are expected to launch in the second quarter of 2022.

Agreement with Physimax

In January 2022, we announced that we have entered into an agreement to purchase all of the right, title and interest in certain assets of Physimax Technologies Ltd.

("Physimax"), a leading provider of computer vision (CV) technology for Musculoskeletal (MSK) functional screening and predictive risk of injury assessment.

Physimax's technology is currently in commercial use by NBA and NFL teams, the U.S.

military and health care facilities specializing in orthopedic care.

The closing of the acquisition of Physimax's assets is subject to customary closing conditions, including the approval of the Israeli Innovation Authority.

The technology enables automated MSK and injury risk screenings with validated accuracy and Physimax's Artificial Intelligence (AI) engine generates evidence-based personal training programs based on the user's objective scoring outcome to aid in effective injury prevention and recovery.

Physimax's unique technology is validated by a professional motion lab as well as industry experts and proven to be comparable to trained human professionals.

In consideration for the acquisition of Physimax's assets, the Company agreed to issue up to 256,660

shares of its common stock, subject to a lock up period, plus a cash payment of $500,000, as well as agreed to assume certain liabilities in an approximate amount of $1,020,000.

Agreement with Sanofi U.S.

In March 2022, we announced our entering into a strategic agreement with Sanofi U.S., an innovative global healthcare company.

The multi-year, $30 million-dollar agreement, which is subject to certain contingencies, will help accelerate commercial adoption of Dario's full suite of digital therapeutics and drive the expansion of digital health solutions on the Dario platform.

Dario and Sanofi will collaborate on promoting the Dario multi-condition digital therapeutics solution, significantly increasing Dario's sales reach in the health plan market and selectively in the employer channel.

In addition, the agreement calls for Dario and Sanofi to develop new or enhanced solutions leveraging the Dario platform, and for the parties to generate robust evidence to support future commercialization in the health plan channel.

Competitive Advantages

Our competitive advantage is driven by several unique capabilities, including:

Consumer-centric design.

Most digital health solutions are built to address the needs of a business and then sold directly to the business, bypassing the difficult step of achieving consumer buy-in with respect to the product.

Our experience as a direct-to-consumer company now leverages those insights to drive B2B2C commercial growth by working with health plans, employers, and provider groups and providing them a solution that their end users are more likely to utilize.

Our current and potential customers recognize that consumer engagement insights are critical to success, and they are prioritizing solutions with more of a consumer focused experience.

Hyper-personalization.

Unlike other digital health solutions, we personalize the user journey to anticipate and adapt to each individual’s unique circumstances, preferences and changes over time.

Our solution has a 40% member enrollment rate.

Our customized, dynamic user journeys are delivered by our artificial intelligence (“AI”)-driven journey engine which personalizes user experience across a range of factors including timing, tone, channel, content, frequency and intervention.

We believe that this creates an adherence to our solutions that leads to an 80% year-over-year retention rate for consumers on our platform and the ability to sustain clinical improvements for more than two years, as demonstrated in our published studies as discussed more fully below.

Therapeutic value at scale.

The digitization of health care has created an ecosystem of access points and point solutions that are largely disconnected, creating waste and inefficiency without sustainable value.

We believe that our unique approach to connected and continuous health care through the use of our single integrated multi-condition platform leads to superior engagement and retention, reduced costs, and ultimately, improved user health that can be delivered at scale.

These advantages combine to ensure that our users have a better overall experience, with stronger engagement, superior clinical and financial outcomes and a simplified integrated platform that addresses the conditions that matter most to our customers and users.

Our Product Offering

Our user-centric software platform integrates digital therapeutics, coaching, professional human support and medical devices to drive superior clinical and financial outcomes.

Our suite of offerings is modular, allowing for enterprise clients to purchase one or more of our chronic condition management solutions, while enjoying the same best-in-class experience supported by our behavior change journey engine so our partners can be confident in achieving sustainable outcomes and value.

Our suite of digital offerings include:

Dario Metabolic (“Dario Evolve”)

Dario’s metabolic solutions are designed to address some of the most commonly co-occurring metabolic health needs - diabetes, hypertension, and weight management - through a combination of software, our smartphone-connected tools,

interaction with live coaches, and real-time data analysis to help inform and educate users of the relationship between their behaviors and their health outcomes to drive changes that last.

Dario Musculoskeletal (“Dario Move”)

Our unique approach prevents and treats the most common MSK conditions, including chronic pain, by dealing with the cause and empowers users to create behavioral change.

Dario Move’s digital physical therapy programs and posture training help people improve strength and mobility by using a combination of software, wearable biofeedback sensors, and coaching to drive sustainable improvements in musculoskeletal health.

Dario Behavioral Health (“Dario Elevate”)

Dario’s behavioral health solution optimizes access to evidence-based care by using an AI-driven screener to triage users and connect them to the most appropriate support across a wide range of mental health needs, including our integrated digital tools and coaching, giving patients a seamless path to proven mental health support.

Dario Full Suite (“Dario One”)

Dario’s full suite of chronic condition management solutions offers the maximum benefit for our partners with a completely seamless and holistic approach to managing chronic conditions.

In addition to a better member experience, our partners deploying Dario One enjoy several benefits from purchasing the entire suite of solutions:

better overall health as evidenced by recent research published by us;

the convenience and ease of a single vendor to manage;

less strain on internal resources spread across several chronic condition management programs;

and a more affordable program launches due to lower costs of implementation.

Dario Health Solution Main Components

Users vary significantly in their interests and preferences, and unique user preferences also vary over time with respect to the optimal timing, tone, content, channel, frequency, and interventions required to produce sustained behavior change.

Users’ interactions with devices, smartphones, coaches, providers, and third-party solutions must be personalized along these axes to ensure optimal engagement, retention, and outcomes.

Furthermore to engage and sustain user interest and participation, and drive outcomes, platforms must be dynamically responsive.

Due to a lack of responsiveness to these types of variances, most digital health platforms that achieve high initial engagement often fail to retain users over time.

Key to our ability to accommodate user behavioral changes is our mature AI-driven user journey engine.

While several in-market solutions now integrate health signals across a range of categories to apply limited, nominal personalization, primarily in the form of nudges, our solution is informed by years of user experience data from over 223,000 users, enabling us to continually personalize and adapt user journeys themselves (and not just messages) over time.

Our journey engine drives our multichannel targeted outreach and enrollment campaigns, informs specific recommendations around a range of categories such as diet, physical activity, self-care, coaching interventions, and provider engagement, and evolves in real time in response to the data exhaust from a user’s interaction with the care ecosystem.

Our journey engine combines complex behavioral science insights with data from hundreds of thousands of users over several years to recommend AI-driven initial and updated care journeys in response to a user’s engagement with the platform.

Most digital health solutions consist primarily of tracking, content, and nudges.

These are often perceived by users as non-rewarding work, and often do not feel relevant to their concerns, particularly as they evolve over time.

We believe that current in-market solutions trivialize within person changes over time and do not appropriately respond to the dynamically evolving interests of users.

This results in reduced engagement and impaired outcomes.

Our journey engine adapts user journeys to drive engagement, retention, and clinical outcomes by optimizing timing, tone, channel, content, frequency and intervention to deliver dynamically personalized user journeys that are more likely to result in the behavior changes needed to drive improved outcomes across a range of conditions.

As we partner with solutions in additional conditions or categories, we engage new populations and generate fresh insights, enhancing the engagement and efficacy of these partnered solutions to deliver additional value to our users.

The engine is designed for integration and scale;

we add populations and conditions for which behaviors are primary drivers of outcomes, our engine becomes more adept at customizing a user’s evolving preferences and needs.

Software Applications

Our chronic condition management solutions are designed as three separate software applications to provide the best possible user experience across metabolic, MSK and behavioral health needs.

Each application is integrated with Dario’s single digital therapeutics platform and behavior change journey engine to ensure the same hyper-personalized experience across each person’s unique health needs and preferences to keep them on track with healthy changes over time.

Dario Evolve helps users change their behaviors and help better manage their diabetes, blood pressure and weight.

Using real-time data and analysis, the app helps users track their progress and offers real-time feedback and customized content to support each individual’s needs and goals.

Integration with the Dario journey engine ensure that each user receives holistic support and a highly personalized experience that keeps them on track for long-lasting results.

Dario Move helps users improve strength and mobility to help address chronic pain and improve overall musculoskeletal health.

After completing an online assessment, each user receives a personalized, evidence-based exercise program that can be adjusted throughout their journey based on sensor data or self-reported feedback to a coach or in the app.

Dario Move guides members through their tailored program with educational content to support long-term outcomes.

Dario Elevate

Dario’s Elevate helps people get the help they need to address common mental health needs.

Starting with a responsive, AI-driven screener, elevate triages users to understand the need and recommend the most appropriate support to help them feel better.

Our integrated, evidence-based digital tools and coaching help people learn proven techniques to better manage their emotional health.

DarioEngage and Coaching

Our member health is managed through our proprietary care management platform DarioEngage, an integrated experience from contracting through onboarding, data exchange, enrollment, outcomes, and reporting.

Regardless of which conditions or populations our customers select, and independent of whether they choose to deploy portions of their strategy through other partners, we present a unified application experience in DarioEngage to reporting that simplifies deployments, creates market-leading transparency, and accelerates and broadens user engagement.

DarioEngage also serves to support our coaching staff by providing a member-level view to help monitor progress and track escalations in real-time.

Our professional staff includes trained and certified health coaches who serve as a personal support for each member throughout their journey, and clinical experts who provide expert-level care when members need additional support.

Our clinical coaches include Certified Diabetes Educators (CDCES), Registered Nurses, Pharmacists and Mental Health Clinicians who are able to assist members throughout their journey.

Dario User Devices

Our product offerings include integrated devices to capture relevant clinical and biofeedback data to support continuous, real-time monitoring of member health.

Our native devices include:

2 unchanged sentences

● Digital Scale

Upright MSK training device

Because of the widespread

and growing use of smartphones and the evolution of user preferences, our primary device is the user’s smartphone.

Our connected

device strategy has been to develop or acquire devices when existing market requirements are not adequately met (for example, our

smart glucometer and Upright’s MSK device), and to partner with best-in-class devices for the remaining applications (including,

for example, our digital scale, blood pressure cuff, and CGM).

Dario targets conditions

for which behaviors drive a significant portion of the outcomes, and which conditions bear a substantial cost burden to our users.

We combine our “Dario Tools”

with our software, by which we offer RPM of their conditions and progress.

Dario divides

its solutions into metabolic and non-metabolic categories:

Metabolic conditions currently deployed include diabetes

(primarily type I and type II), hypertension and obesity/pre-diabetes.

Non-Metabolic conditions currently deployed include MSK

We present our users

with a digital center of excellence - a low friction integrated experience from contracting through onboarding, data exchange,

enrollment, outcomes, and reporting.

Regardless of which conditions or populations our customers select, and independent of whether

they choose to deploy portions of their strategy through other partners, we present a unified application experience that simplifies

deployments, creates market-leading transparency, and accelerates and broadens user engagement.

The Dario Loop

Users vary significantly

in their interests and preferences, and unique user preferences also vary over time, insofar as optimal timing, tone, content,

channel, frequency, and intervention required to produce sustained behavior change.

Users interactions with devices, smartphones,

coaches, providers, and third-party solutions must be personalized along these axes to ensure optimal engagement, retention, and

To engage and sustain user interest and participation, and to drive outcomes, platforms must be dynamically responsive.

Because of a lack of responsiveness to these types of variances, many digital health platforms that achieve high initial engagement

often fail to retain users over time.

Key to our ability

to accommodate user behavioral changes is our mature AI-driven user journey engine, the “Dario Loop.”

While several

in-market solutions now integrate health signals across a range of categories to apply limited, nominal personalization, primarily

in the form of nudges, our solution is informed by years of user experience data from over 150,000 users, enabling us to continually

personalize and adapt user journeys over time.

The Dario Loop journey engine drives our multichannel targeted outreach and enrollment

campaigns, informs specific recommendations around a range of categories such as diet, physical activity, self-care, coaching interventions,

and provider engagement, and evolves in real time in response to the data exhaust from a user’s interaction with the care

The Dario Loop combines

complex behavioral science insights with data from tens of thousands of users over several years to recommend AI-driven initial

and updated care journeys in response to a user’s engagement with the platform.

Most digital health solutions consist primarily

of tracking, content, and nudges.

These are often perceived by users as non-rewarding work, and often do not feel relevant to their

concerns, particularly as they evolve over time.

We believe that current in-market solutions trivialize within person changes over

time and do not appropriately respond to dynamically evolving interests of users.

This results in reduced engagement and impaired

The Dario Loop adapts user journeys’

to drive engagement, retention, and clinical outcomes by optimizing timing,

tone, channel, content, frequency and intervention to deliver dynamically personalized user journeys that are more likely to result

in the behavior changes needed to drive improved outcomes across a range of conditions.

As we partner with solutions in additional

conditions or categories, we “loop them in”

to our solution, enhancing the engagement and efficacy of these partnered

solutions to deliver additional value to our users.

The engine is designed for integration and scale;

as we add populations and

conditions for which behaviors are primary drivers of outcomes, our engine becomes more adept at customizing a user’s preferences

● Biofeedback sensor device

Sales and Marketing

In 2021, we invested in building a robust U.S.

commercial team with deep experience in the health care industry to sell into the three key industry segments:

health plans, employers, and providers.

Dario’s sales teams are aligned to commercial channels and charged with maximizing revenue by selling multiple product lines in each channel.

Dario’s marketing resources are focused on three key objectives:

first, engage new consumers on the platform to provide early feedback on new and enhanced solutions;

second, engage eligible individuals with our services as part of an enterprise client population;

and third, attract new enterprise clients across all three sales segments.

Our Commercial Channels

Our software solutions are sold across a range of channels to create multiple growth engines and support rapid adoption across all segments of the market.

Our integrated product suite is designed to address a common and growing sentiment from enterprise customers expressing frustration with the large number of condition-specific solutions, lack of transparency, lackluster results and poor member experiences.

Our software solutions align to meet the pain points across the three key buyer segments – health plans, employers, and providers – while also delivering value to strategic partners through our differentiated approach in the market.

Finally, our consumer-centric legacy remans a key component of our commercial strategy, bolstering our ongoing solution development by serving as proving grounds for new services and product enhancements.

Health Plans :

Although health plans represent the longest and most complex purchasing cycle across our client base, these contracts often represent sizeable opportunities as they typically offer much larger potential member populations.

We currently have two live contracts with health plans, one a regional payer and one a large national plan, with several additional plans in negotiation and contracting at present day.

Our most robust growth in 2021 came from the employer market, a key buyer to help demonstrate our ability to deliver results.

Today, we have several dozen employer populations actively on our platform, and growth of our employer pipeline continues to grow and mature.

The Centers for Medicare and Medicaid released additional proposed Current Procedural Terminology (“CPT”) codes for remote therapeutics in 2021, expanding our ability to support providers using our solutions to provide Remote Patient Monitoring (RPM) services.

We won provider RPM contracts from several large regional practices in 2021 and continue to see pipeline growth thanks to the growing regulatory acceptance of digital health as form of care delivery, with several practices actively in the negotiation and contracting phase.

Partnerships:

As part of our strategy for rapid growth, strategic partnerships play a key role in helping to expand our reach across markets quickly and efficiently.

One such significant partnership agreement to come to fruition in early 2022 is our collaboration with Sanofi, a global leader in health care.

The multi-year, $30 million-dollar agreement, as described more fully below, will help accelerate commercial adoption of our full suite of digital therapeutics through the promotion of our solutions in Sanofi sales channels and the collaborative development of new products.

We also entered into partner agreements with several large employer benefits platforms such as Virgin Health Pulse in 2021, helping expand our reach within the employer market.

Our ability to engage members and improve health begins with our consumer-centric approach, and this audience remains key to our commercialization at the enterprise client level.

Our direct-to-consumer channel continues to attract members to our platform and provides a neutral audience for testing and learning about our products.

These insights inform both our AI-driven behavior change journey engine, helping continuously improve engagement and retention, and inform product design to ensure our solutions remain at the forefront of consumer expectations.

On February 28, 2022, we entered into an exclusive preferred partner, co-promotion, development collaboration and license agreement (the “Agreement”) with Sanofi for a term of five (5) years.

Pursuant to the Agreement, we and Sanofi will collaborate as preferred partners to co-promote certain of our products and services, including devices and accessories, and to develop new products and services based on insights derived from our data relating to the use of those devices and services.

In addition, we granted Sanofi a license to access and use certain of our data to derive insights from and improve our products or services, and Sanofi granted us a license under certain intellectual property of Sanofi for purpose of creating and promoting certain products and services in the United States.

Pursuant to the Agreement, in consideration of the preferred co-promotion and development rights granted by us, Sanofi agreed to pay us an aggregate amount of up to $30 million over the initial term of the Agreement, consisting of (i) an upfront payment, (ii) annual compensation for development costs per annual development plans to be agreed upon annually and (iii) certain contingent milestone payments upon meeting certain net sales and enrollment rate milestones at any time during the term of the Agreement.

The Agreement also provides for us to make certain revenue sharing payments to Sanofi in a percentile beginning in the low double digits to low twentieth percentile of specified revenues upon qualifying sales through Sanofi introductions achieving a minimum revenue amount, and provided that the qualifying sales through Sanofi introductions remain above a specified percentage of total sales after year 3 of the collaboration.

Revenue sharing in the thirtieth percentile will apply with respect to new solutions or services developed under the collaboration.

The Agreement has a term of five (5) years and may be renewed for a subsequent five (5) year term upon the mutual agreement of the parties.

The Agreement may be terminated (i) by either party for a material breach, force majeure or insolvency;

(ii) by us if net sales requirements are not reached;

(iii) by either party for convenience, upon sixty days’ prior notice, beginning in the third year of the Agreement;

or (iv) by Sanofi if we fail to complete a development plan within nine (9) months of the Effective Date, or upon our change of control.

Our Growth Strategies

customers across a range of channels .

Due to our unique ability to deploy flexibly and interoperability, and since we

cover the range of chronic conditions of common concern to health plans, providers and employers, we are experiencing increased

interest in our behavior change platform for chronic diseases.

We have already engaged with several large providers and one fortune

500 company subsidiary, and are in late stage negotiations to enter contracts with several health plans on their fully insured

We anticipate continued growth and demand in these channels as we acquire customers.

Each additional contract not only

increases revenues, but also the likelihood of attracting additional new customers as they recognize our solutions being adopted

and trusted by peers and competitors.

the eligible populations within customers .

Initially, Dario’s solutions were deployed for type I and type II diabetes.

Since that time, we have added HTN, MSK.

Each new condition added increases our ability to cover larger portions of our customers’

populations, thereby reducing the need for our customers to engage multiple vendors, and reducing their costs as compared to the

alternative of partnering with multiple solutions to cover the conditions and categories that we cover on one single platform.

As a company with multiple product lines operating in several channels, we have multiple growth engines.

Furthermore, because we often bill on a per member per month basis, this enables recurring revenue that grows when users are enrolled into the platform.

The below key factors should have high impact on the business ability to grow.

Add customers across a range of markets and channels .

In 2021, we established a client footprint across all three key enterprise verticals – providers, employers, and health plans – with contracts representing a mix of our solutions.

Each additional contract not only increases revenues, but also the likelihood of attracting additional new customers as they recognize our solutions being adopted and trusted by peers and competitors.

With new and existing clients, we are also focused on expanding client solution contracts across product lines to increase our ability to maximize revenue per member through engagement in multiple condition management programs.

Increase the eligible populations within customers .

The expansion of our solution set to include MSK and behavioral health increases our ability to cover larger portions of our customers’ populations, thereby reducing the need for our customers to engage multiple vendors, and reducing their costs as compared to the alternative of partnering with multiple solutions to cover the conditions and categories that we cover on one single platform.

The addition of medical conditions on our platform in the future can also accelerate the eligible populations for our services.

Drive Engagement .

Our business model is predominantly a subscription model, where we charge per user engaged on the platform.

As our AI matures and as we deploy increasingly dynamic and adaptive personalization, we intend to engage a large portion of eligible

populations, potentially driving increased revenue.

A user is considered as an engaged user if (i) the user is measuring high

blood glucose and/or blood pressure using our app and our connected devices, (ii) a user is interacting with our coach via

one of the communication channels such as chat, SMS, email or phone call, or (iii) a user who is performing one of the following

activities on his application such as:

reading messages of articles sent to him over the app, setting or updating goal on his application,

updating his profile, tagging meals, recording intake of drugs and other activities available on our application.

solutions for value .

As our AI matures and as we deploy increasingly dynamic and adaptive personalization, we intend to engage a large portion of eligible populations, potentially driving increased revenue.

Optimize solutions for value .

Our customers primarily engage for 2 key reasons:

(1) the opportunity for cost savings;

competitive advantage in breadth of conditions serviced and our AI technology;

and (3) revenue opportunities from our digital

center of excellence.

Our pricing strategy is designed to deliver return on investment to our customers soon after engagement,

and steadily over time.

As we evolve our solutions to deliver increased value to our users, we can offer customers value-based

pricing models that can lead to greater revenue.

and Partnerships .

In early 2021, as part of our plan to expand our suite of offerings to provide a wider range of solutions

to our potential customers, we acquired Upright, and we are now planning to deploy a comprehensive MSK virtual

clinic in the second half of 2021.

The COVID-19 pandemic has had a major impact on health.

Our members and eligible members were disproportionately

affected as researched showed that chronic condition comorbidities increased the risk of hospitalization and death from COVID-19.

In 2020, telehealth and digital care spiked significantly, as health plans and providers sought to deliver solutions virtually.

Across the industry, telehealth use spiked in 2020 and has since withdrawn some, albeit to still more than 50x pre-pandemic levels.

However, telehealth as delivered today is not appreciably different from how it was delivered 30 years ago, with largely telephone

only visits, and even where video is present, remote monitoring, real-time data and device integration remain mostly absent.

customers and potential customers recognize the tremendous potential of building on the shift to telehealth with the evolution

of more complete virtual care models as they see the limitations of pure telehealth-based care for chronic conditions.

Sales and Marketing

Our initial marketing

efforts in the United States were focused on the early adopter users who have diabetes and who are paying out of pocket for their

monitoring tools to manage their chronic condition, and we have concentrated our efforts in gaining market share and brand awareness

through direct-to-consumer marketing efforts.

In 2018, we began to

expand our marketing efforts to the insured population by offering our DarioEngage platform to a variety of healthcare providers

who are supporting and coaching individuals with diabetes.

We believe this will help us to diversify our revenues, from only selling

our Dario Blood Glucose Monitoring System and its consumables to revenues generated from providing online real-time monitoring,

supervising and coaching capabilities to all relevant healthcare providers who support individuals with diabetes and hypertension,

and in the longer terms also other chronic conditions.

As part of these efforts, during 2019 we announced our planned cooperation

with Attain Health, Giant Eagle, BestBuy, and Better Living Now (BLN).

On the marketing side,

we primarily utilize online marketing in order to create awareness of Dario.

Rather than solely rely on an online advertisement,

we will also consider revenue sharing with affiliate networks and a variety of other pay-for-performance methods commonly used

in online commerce.

We also expect to collaborate

with the medical community to showcase what we expect will be the Dario Smart Diabetes Management Solution’s clinical equivalence

and usability superiority through DarioEngage and Dario Loop.

As part of transforming

our offering from the direct-to-consumer market to the (B2B2C and payors market, in the beginning of 2020, we hired a President

and General Manager for North America who is leading our sales and marketing organization in the United States aimed to offer

our digital solution to health plans, employers, hospital, clinics, and remote patient monitoring centers.

We expect this organization

to grow as we enter into service agreements with such payors.

In that regard, in 2020, we announced a variety of agreements expanding

our sales in the B2B2C market including:

(i) in January 2021, our announcement that we entered into an agreement to

provide its digital therapeutics solution to eligible employees of a subsidiary of a U.S.

based Fortune 500 technology and engineering

company, which was obtained through our partnership with the Vitality Group (“Vitality”);

(ii) in December 2020,

we announced that we entered into an agreement to provide our RPM solution to Presbyterian

Medical Services, one of the largest integrated healthcare systems in the State of New Mexico, effective January 1,

(iii) in November 2020, we announced that we entered into an agreement to provide our digital therapeutics solution

to eligible employees of a U.S.-based Fortune 500 technology company;

(iv) in October 2020, we announced our

inclusion in Vitality’s Gateway Flex offering, allowing our digital therapeutics platform to be marketed to Vitality's vast

employer base that provides benefits solutions to 20 million people, (v) in September 2020, we announced our partnership

with HMC Healthworks, that extends our reach into HMC's vast multi-employer client base through which HMC is currently managing

more than one million members;

(vi) in July 2020, we announced that we entered the U.K.

RPM market through an agreement

with Williams Medical, making our platform available to healthcare professionals throughout the U.K.

June 2020, we announced two RPM agreements in the U.S., allowing healthcare providers to monitor patients between office

visits while utilizing new CMS reimbursement codes, an added source of revenue.

Manufacturing

As we do not directly

manufacture our products ourselves, we have supply agreements with manufacturers for the Dario Blood Glucose Monitoring System,

glucose test strips, lancing devices, lancets, blood pressure monitor and weight scale.

We have arrangements in place

with commercial-scale manufacturers for both the Dario Blood Glucose Monitoring System, for our test strips and the other

As a result of investments, we have made over the past several years, we own the specialized equipment used to manufacture Dario

Blood Glucose Monitoring System.

During 2015, we commenced

the manufacturing of our Dario Blood Glucose Monitoring System with a Chinese manufacturer as part of our efforts to further reduce

manufacturing cost.

At the beginning of 2016, we transitioned our manufacturing to a new Chinese manufacturer as part of our effort

to increase our manufacturing capacity and improve cost savings.

product offering is primarily subscription based software and services which do not require manufacturing, and which are

developed by us.

Clinical Studies and Outcomes

Our platform is planned

to target different chronic conditions.

Our initial focus has been on diabetes because that is a condition in which we believe

there is the biggest opportunity to make a meaningful impact and improve healthcare outcomes and lower costs.

It is also a condition

that is associated with multiple different comorbidities, each of which represents a significant health and economic burden.

majority of our end-users are individuals with type 2 diabetes.

Most people with type 2 diabetes are diagnosed after age 45 and

have at least two co-existing chronic conditions.

The most common chronic condition in people living with type 2 diabetes include

hypertension (73.6%), overweight/obesity (87.5%), hyperlipidemia (75.2%), chronic kidney disease (36.5%), and cardiovascular disease

Typically, the health of people with type 2 diabetes is managed by a primary care physician, although few may also be

seen by an endocrinologist.

On average, people

with type 2 diabetes see a physician more than five times per year.

While there are a number of metrics that physicians use to

track the health of these patients, the most common is hemoglobin A1c, or HbA1c, which measures the average 90-day glycemic (blood

glucose) level in red blood cells.

Clinical guidelines published by the ADA suggest that a reasonable HbA1c target for many non-pregnant

adults is less than 7%, or 154 milligrams per deciliter.

A higher HbA1c has been associated with increased health risk and associated

The ADA estimates that annual healthcare costs for a person with diabetes cost an average of $16,750 compared to $7,151

for a healthy individual.

Research published by Oxford University in the United Kingdom suggests that a 1% reduction in HbA1c levels

leads to a 21% reduction in death from diabetes, a 14% reduction in heart attacks and a 43% reduction in peripheral vascular disease.

Monitoring HbA1c levels is typically done through routine blood work in a clinical laboratory with a physician order.

can involve a range of therapies, the most common of which is lifestyle management such as nutrition, physical activity and medication.

Physicians will also employ various strategies to manage diabetes-associated comorbidities.

We believe that patients

using a digital diabetes management platform have the potential to promote behavioral modification and sustain adherence to diabetes

management, demonstrating better glycemic control.

Our sophisticated customer-focused solutions provide significant, meaningful

improvements in the measurable clinical outcomes of our members.

the opportunity for cost savings and our competitive advantage in breadth of conditions serviced and our AI technology.

Our pricing strategy is designed to deliver return on investment to our customers soon after engagement, and steadily over time.

As we evolve our solutions to deliver increased value to our users, we can offer customers value-based pricing models that can lead to greater revenue.

The onboarding of client populations across multiple product lines requires the ability to outreach and engage to large numbers of individuals in a coordinated and responsive manner.

We are focused on scaling operations to meet the rapid growth our of enterprise client member base by investing in platform and process technologies.

We also maintain supply agreements with commercial-scale manufacturers to produce our consumer devices, and owns the specialized equipment used to manufacture the Dario Blood Glucose Monitoring System.

Clinical Studies

The system accuracy and user performance

of our product has been evaluated in several studies that we have performed, in over 1,300 diabetic patients from 2015 through

2017, and was found compliant with the most stringent current requirements of FDA guidelines and international standards then in

Clinical validation

of our product was performed with 350 diabetic patients for each product type, namely the meter with the audio jack and the meter

with the lightning connector, and the results that were achieved were as follows:

Dario BGMS (Android):

For all subject's samples 96.6% within ±15% and 100% within ±20% of the medical laboratory values at the entire glucose concentrations range

Dario LC BGMS (iPhone, Lightning connector):

For all subject’s samples 96.3% within ±15% and 99.4% within ±20% of the medical laboratory values at the entire glucose concentrations range.

Published Clinical Data

Since 2017, we have

conducted numerous real-world-data studies through analyzing the clinical data of our user’s utilizing the rapidly increasing

database that is stored on our data cloud.

Several scientific

studies were published by us between 2017 and through 2020 in leading diabetes conferences such as the ADA, AADE and ATTD.

Main Highlights

In all of the below

studies, we believe that the results show a trend of continued improvement, demonstrating a direct correlation between using the

Dario Blood Glucose Monitoring System and app and improving clinical parameters.

The combination of Dario’s Blood Glucose

Monitoring System and app may promote behavioral modification and enhanced adherence to diabetes management, demonstrating improvement

in glycemic outcomes and sustainment for a long period of time.

Dario reported

an Average Reduction in Estimated HbA1C of 1.4% for High-Risk type 2 Diabetes Users.

Dario presented at

the 77 th ADA session a study that was titled “Reducing A1C Levels in Individuals with High-Risk Diabetes Using

the Mobile Glucose Meter Technology.”

In the study Dario reported an average reduction in estimated HbA1C of 1.4% for high-risk

type 2 Diabetes users.

At the ADA 2018 session, Dario presented

three real-world-data analysis studies, as detailed below.

Type 2 Diabetes Users

of Dario Digital Diabetes Management System Experience a Shift from Greater than 180 mg/dL to Normal Glucose Levels with Sustainable

Our studies below demonstrate the clinical value of our legacy digital therapeutic devices and the ability of our solutions to deliver sustainable outcomes over time.

Dario reported an Average Reduction in Estimated HbA1C of 1.4% for High-Risk type 2 Diabetes Users.

Dario presented at the 77 th ADA session a study that was titled “Reducing A1C Levels in Individuals with High-Risk Diabetes Using the Mobile Glucose Meter Technology.” In the study Dario reported an average reduction in estimated HbA1C of 1.4% for high-risk type 2 Diabetes users.

At the ADA 2018 session, Dario presented three real-world-data analysis studies, as detailed below.

Type 2 Diabetes Users of Dario Digital Diabetes Management System Experience a Shift from Greater than 180 mg/dL to Normal Glucose Levels with Sustainable Results

● Reduction of 19.3% in high glucose readings within 12 months

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A retrospective data evaluation study was performed on the Dario TM cloud database.

A population of all active Type 2

Diabetic (T2D) users that took measurements with Dario TM BGMS on average of 20 measurements per month during 2017.

study assessed the ratio of all high blood glucose readings (180-400 mg/dL) and the ratio of all normal blood glucose readings

(80-120 mg/dL) in their first month of use to their last month of use during 2017 as recorded in the database.

For 17,156 T2D users activated during 2017 the average ratio of high events (180-400 mg/dL) was reduced by 19.3% (from 28.4% to

22.9% of the entire measurements).

While at the same time, the ratio of normal range readings (80-120 mg/dL) was increased by 11.3%

(from 25.6% to 28.5% of the entire measurements).

The most significant shift occurred after one month of usage (14% decrease) and

maintained stability over the following months throughout the full year.

Analysis combining 2017 and 2018 data totals 38,838 Type 2 Diabetes active users and 3,318,014 measurements show

14.3% decrease in high readings (180-400 mg/dL) and 9.2 % increase in In-range (80-120 mg/dL) readings

A decrease in High Readings

and Severe Hyperglycemic Events for People with T2D over the Full Year of 2017 in Users Monitoring with Dario Digital Diabetes

Management System

A population of all active Type 2 Diabetic (T2D) users that took measurements with Dario TM BGMS on average of 20 measurements per month during 2017.

The study assessed the ratio of all high blood glucose readings (180-400 mg/dL) and the ratio of all normal blood glucose readings (80-120 mg/dL) in their first month of use to their last month of use during 2017 as recorded in the database.

For 17,156 T2D users activated during 2017 the average ratio of high events (180-400 mg/dL) was reduced by 19.3% (from 28.4% to 22.9% of the entire measurements).

While at the same time, the ratio of normal range readings (80-120 mg/dL) was increased by 11.3% (from 25.6% to 28.5% of the entire measurements).

The most significant shift occurred after one month of usage (14% decrease) and maintained stability over the following months throughout the full year.

Updated Analysis combining 2017 and 2018 data totals 38,838 Type 2 Diabetes active users and 3,318,014 measurements show 14.3% decrease in high readings (180-400 mg/dL) and 9.2 % increase in In-range (80-120 mg/dL) readings

A decrease in High Readings and Severe Hyperglycemic Events for People with T2D over the Full Year of 2017 in Users Monitoring with Dario Digital Diabetes Management System

● Reduction of 20% of High events (180-400 mg/dL) in T2D sustained within 12 months

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A retrospective data evaluation study was performed on the Dario TM cloud database.

A population of active Type 2 Diabetic

(T2D) users that continuously measured their blood glucose using Dario TM BGMS during the full year of 2017 was evaluated.

The study assessed the ratio of high (180-400 mg/dL) and hyperglycemic (>400mg/dL) blood glucose readings during full year of

2017 as recorded in the database.

The average of high and hyperglycemic glucose readings were calculated in periods of 30-60, 60-90,

90-120, 120-150, 150-180, 180-210, 210-240, 240-270, 270-300, 300-330, 330-360 days and compared to first 30 days as a starting

point of analysis.

For 225 T2D active users the ratio of high events (180-400 mg/dL) was reduced gradually in 19.6% (from 23.4% to 18.8% of the entire

measurements) from baseline compared to the 12 th month of the year.

Moreover, the ratio of severe hyperglycemia events

(>400 mg/dL) was decreased in 57.8% (from 0.90% to 0.38% of the entire measurements) at the same period.

Continuous Reduction of

Blood Glucose Average during One Year of Glucose Monitoring Using Dario Digital Monitoring System in a High-Risk Population

A population of active Type 2 Diabetic (T2D) users that continuously measured their blood glucose using Dario TM BGMS during the full year of 2017 was evaluated.

The study assessed the ratio of high (180-400 mg/dL) and hyperglycemic (>400mg/dL) blood glucose readings during full year of 2017 as recorded in the database.

The average of high and hyperglycemic glucose readings were calculated in periods of 30-60, 60-90, 90-120, 120-150, 150-180, 180-210, 210-240, 240-270, 270-300, 300-330, 330-360 days and compared to first 30 days as a starting point of analysis.

For 225 T2D active users the ratio of high events (180-400 mg/dL) was reduced gradually in 19.6% (from 23.4% to 18.8% of the entire measurements) from baseline compared to the 12 th month of the year.

Moreover, the ratio of severe hyperglycemia events (>400 mg/dL) was decreased in 57.8% (from 0.90% to 0.38% of the entire measurements) at the same period.

Continuous Reduction of Blood Glucose Average during One Year of Glucose Monitoring Using Dario Digital Monitoring System in a High-Risk Population

● Reduction of 14% Blood Glucose average was observed in T2D within 12 months

● 76% of the population showed 24% improvement in Blood glucose average within 12 months

An exploratory data analysis study reviewed a population of high risk active type 2 Diabetic users with initial 30 days glucose

average above 180 mg/dL during a full calendar year.

An exploratory data analysis study reviewed a population of high risk active type 2 Diabetic users with initial 30 days glucose average above 180 mg/dL during a full calendar year.

The study assessed the average blood glucose readings along a year of usage.

The average of glucose readings was calculated per user in periods of 30 days intervals from 30-60 to 330-360 days and compared

to the first 30 days as the starting point baseline of analysis.

Overall of 238 highly engaged T2D users (more than one daily measurement in average) whose average blood glucose

level was above 180mg/dL in the first 30 days of measurements (225±45 mg/dL) showed continuous reduction in glucose level

Reduction in blood glucose average level was demonstrated gradually, in the succeeding 3, 6 and 12 months

showing average decrease of 7%, 11% and 14% vs.

The average of glucose readings was calculated per user in periods of 30 days intervals from 30-60 to 330-360 days and compared to the first 30 days as the starting point baseline of analysis.

Overall of 238 highly engaged T2D users (more than one daily measurement in average) whose average blood glucose level was above 180mg/dL in the first 30 days of measurements (225±45 mg/dL) showed continuous reduction in glucose level average vs.

Reduction in blood glucose average level was demonstrated gradually, in the succeeding 3, 6 and 12 months showing average decrease of 7%, 11% and 14% vs.

baseline, respectively.

Furthermore, 76% of the entire population (180 out of 238

users) improved their average blood glucose level over a year.

Those 180 users (average blood glucose 228±46) showed an

average decrease of 10%, 16% and 24% in their glucose average following 3, 6 and 12 months, respectively.

At the American Association

of Diabetes Educators (AADE) 2018 Dario presented a study titled “Decrease in Estimated A1C for people in High-risk over

a full year of users monitoring with a digital Diabetes management system.”

A reduction of 1.4%

in estimated HbA1C in Type 2 Diabetes high risk users from baseline after one year of the Dario system use.

Furthermore, 76% of the entire population (180 out of 238 users) improved their average blood glucose level over a year.

Those 180 users (average blood glucose 228±46) showed an average decrease of 10%, 16% and 24% in their glucose average following 3, 6 and 12 months, respectively.

At the American Association of Diabetes Educators (AADE) 2018 Dario presented a study titled “Decrease in Estimated A1C for people in High-risk over a full year of users monitoring with a digital Diabetes management system.”

A reduction of 1.4% in estimated HbA1C in Type 2 Diabetes high risk users from baseline after one year of the Dario system use.

A retrospective data evaluation study was performed on the Dario TM cloud database.

A population of high-risk (with baseline

A1C > 7.5 percent), active users that continuously measured their blood glucose using Dario TM BGMS during a full

year was evaluated.

The study assessed estimated A1C values based on blood glucose readings during a full year as recorded in the

The estimated A1C values were calculated in periods of 3, 6, 9 and 12 months and compared to first 30 days as a starting

point of analysis.

A group of 363 high-risk Dario BGMS users (A1C>7.5) with greater than two blood glucose measurements taken per day in the first

30 days and in the 12 th month of the year was selected.

Estimated A1C was improved by -0.7, -0.8 and -1 percent from

baseline to 3, 6 and 9 months respectively, and remained -1 percent lower following 12 months of usage (8.65±0.96 vs.7.65±1.0).

Moreover, subgroup analyses by diabetes type revealed substantial estimated A1C improvement among people with T2D showing improvement

of -1 percent from baseline to 3, 6 months and 1.4 percent following 12 months (8.5 ±

7.14% ±

An additional study

evaluated on the potential improvement in glycemic variability in Type 2 diabetes over six months in patients monitoring with Dario

Digital Diabetes Management System.

Dario presented the study results at the Advance Technologies and Treatment for Diabetes (ATTD)

conference in February 2019 in Berlin.

A population of high-risk (with baseline A1C > 7.5 percent), active users that continuously measured their blood glucose using Dario TM BGMS during a full year was evaluated.

The study assessed estimated A1C values based on blood glucose readings during a full year as recorded in the database.

The estimated A1C values were calculated in periods of 3, 6, 9 and 12 months and compared to first 30 days as a starting point of analysis.

A group of 363 high-risk Dario BGMS users (A1C>7.5) with greater than two blood glucose measurements taken per day in the first 30 days and in the 12 th month of the year was selected.

Estimated A1C was improved by -0.7, -0.8 and -1 percent from baseline to 3, 6 and 9 months respectively, and remained -1 percent lower following 12 months of usage (8.65±0.96 vs.7.65±1.0).

Moreover, subgroup analyses by diabetes type revealed substantial estimated A1C improvement among people with T2D showing improvement of -1 percent from baseline to 3, 6 months and 1.4 percent following 12 months (8.5 ± 0.91% vs.

7.14% ± 0.98%).

An additional study evaluated on the potential improvement in glycemic variability in Type 2 diabetes over six months in patients monitoring with Dario Digital Diabetes Management System.

Dario presented the study results at the Advance Technologies and Treatment for Diabetes (ATTD) conference in February 2019 in Berlin.

We presented two additional studies outcomes at ADA 2019 conference.

Decrease in Glycemic Variability

for T2D over Six Months in Patients Monitoring with Dario Digital Diabetes Management System

Decrease in Glycemic Variability for T2D over Six Months in Patients Monitoring with Dario Digital Diabetes Management System

● Reduction of 14%-18% in measurements variability was observed in T2D within 6 months

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A retrospective data evaluation study was performed on the Dario TM database.

A population of T2D high-risk

patients (blood glucose measurements average (GM avg ) >180 mg/dL) measuring more than 20 times in the first 30 days

(analysis baseline) was evaluated on days 60-90 (3 months) and 150-180 days (6 months).

Standard deviation (SD) and GM avg

were calculated and compared to the baseline.

A population of T2D high-risk patients (blood glucose measurements average (GM avg ) >180 mg/dL) measuring more than 20 times in the first 30 days (analysis baseline) was evaluated on days 60-90 (3 months) and 150-180 days (6 months).

Standard deviation (SD) and GM avg were calculated and compared to the baseline.

A group of 698 T2D high-risk Dario TM users was selected.

GV was reduced by 10% and 14% from baseline through 3 and 6

months, respectively (SD of 55.7, 58.4 vs.65.0).

GM avg was reduced by 8% and 12% from baseline through 3 and 6 months,

respectively (201.1±25.57, 192.8±54.3 vs.

219.5±38.5) while patient’s hypoglycemic event (<70mg/dL)

was in average, less than one (<1) during this period.

Subgroup analyses (355 patients) revealed substantial GV improvement

among non-Insulin T2D patients.

The GV was reduced by 14% and 18% from baseline through 3 and 6 months, respectively (SD of 52.8,

50.7 vs.61.7).

T2D Users of Dario Digital

Diabetes Management System Experience an Increase of in-range Glucose Levels Linked to App Engagement

Relative Increase

of 10 % In-range linked to App engagement

GV was reduced by 10% and 14% from baseline through 3 and 6 months, respectively (SD of 55.7, 58.4 vs.65.0).

GM avg was reduced by 8% and 12% from baseline through 3 and 6 months, respectively (201.1±25.57, 192.8±54.3 vs.

219.5±38.5) while patient’s hypoglycemic event (<70mg/dL) was in average, less than one (<1) during this period.

Subgroup analyses (355 patients) revealed substantial GV improvement among non-Insulin T2D patients.

The GV was reduced by 14% and 18% from baseline through 3 and 6 months, respectively (SD of 52.8, 50.7 vs.61.7).

T2D Users of Dario Digital Diabetes Management System Experience an Increase of in-range Glucose Levels Linked to App Engagement

Relative Increase of 10 % In-range linked to App engagement

A retrospective data evaluation study was performed on the Dario TM cloud database.

A population of active Type 2 Diabetic

(T2D) users (>15 measurements per month on average) was evaluated.

The study assessed the ratio of in-range blood glucose readings

(70-140 mg/dL) as a function of App engagement level for 6 months as recorded in the database compared to first 30 days as a starting

point of analysis.

A population of active Type 2 Diabetic (T2D) users (>15 measurements per month on average) was evaluated.

The study assessed the ratio of in-range blood glucose readings (70-140 mg/dL) as a function of App engagement level for 6 months as recorded in the database compared to first 30 days as a starting point of analysis.

A population of 4917 T2D non-insulin users measuring more than 15 times per month on average during 6 months in a row was evaluated.

The ratio of in-range (70-140 mg/dL) readings was increased following 3 months in correlation to the level of tagging meal reference/carbs/physical

activity occurrences (4.0%, 9.1% and 11.9% for tagging 0-1, 1-2 and >2 times per day on average, respectively) and sustained

for 6 months (3.1%, 7.0% and 12.2%, respectively).

In subgroup analysis focusing on users entering their meal reference, high correlation

was observed following 3 months with an increase of in-range measurements in 4.6%, 8.4% and 12.0% for 0-1, 1-2 and >2 meal reference

tagging per day on average, respectively, and maintained stability over 6 months period (3.2%, 7.4%, and 12.5%, respectively).

Reduction of Blood Glucose

Average Less than 140mg/dL in People with Type2 Diabetes Using Dario Digital Diabetes Management System

30-40% of T2D Dario

users experienced Reduction of Blood Glucose Average below 140 mg/dL

The ratio of in-range (70-140 mg/dL) readings was increased following 3 months in correlation to the level of tagging meal reference/carbs/physical activity occurrences (4.0%, 9.1% and 11.9% for tagging 0-1, 1-2 and >2 times per day on average, respectively) and sustained for 6 months (3.1%, 7.0% and 12.2%, respectively).

In subgroup analysis focusing on users entering their meal reference, high correlation was observed following 3 months with an increase of in-range measurements in 4.6%, 8.4% and 12.0% for 0-1, 1-2 and >2 meal reference tagging per day on average, respectively, and maintained stability over 6 months period (3.2%, 7.4%, and 12.5%, respectively).

Reduction of Blood Glucose Average Less than 140mg/dL in People with Type2 Diabetes Using Dario Digital Diabetes Management System

30-40% of T2D Dario users experienced Reduction of Blood Glucose Average below 140 mg/dL

A retrospective data evaluation study was performed on the Dario TM cloud database.

A population of

active T2D users that continuously measured for 6 months was evaluated.

The study assessed their BG avg and estimated A1C (eA1C)

values based on blood glucose readings as recorded in the database.

Values were calculated in periods of 3 and 6 months and compared

to their first 30 days as a starting point analysis.

A group of 1248 Dario BGMS T2D active users (1.98 measurements per day on average during 6 months in a row) with

BG avg >140mg/dL (eA1C>6.5) was evaluated.100% reduced their BG avg along 6 months on average.

A group of 31% (387)

achieved BG avg of <140 mg/dL (eA1C<6.5) following 3 months showing 19% reduction on average from baseline (132.38±13.36

vs.162.79±25.41 mg/dL and eA1C 6.24±0.46 vs 7.3±0.88) and sustained their glycemic control during a 6 months

period (131.57±13.86 mg/dL and eA1C 6.21±0.48).

Subgroup analyses

of 568 non-insulin users revealed that 40% (226) achieved a BG avg <140 mg/dL following 3 months (131.95±13.21 vs.161.67±24.18

mg/dL and eA1C 6.22±0.46 vs 7.26±0.84) and sustained for 6 months period (131.03±13.70 mg/dL and eA1C 6.19±0.47).

A population of active T2D users that continuously measured for 6 months was evaluated.

The study assessed their BG avg and estimated A1C (eA1C) values based on blood glucose readings as recorded in the database.

Values were calculated in periods of 3 and 6 months and compared to their first 30 days as a starting point analysis.

A group of 1248 Dario BGMS T2D active users (1.98 measurements per day on average during 6 months in a row) with BG avg >140mg/dL (eA1C>6.5) was evaluated.100% reduced their BG avg along 6 months on average.

A group of 31% (387) achieved BG avg of <140 mg/dL (eA1C<6.5) following 3 months showing 19% reduction on average from baseline (132.38±13.36 vs.162.79±25.41 mg/dL and eA1C 6.24±0.46 vs 7.3±0.88) and sustained their glycemic control during a 6 months period (131.57±13.86 mg/dL and eA1C 6.21±0.48).

Subgroup analyses of 568 non-insulin users revealed that 40% (226) achieved a BG avg <140 mg/dL following 3 months (131.95±13.21 vs.161.67±24.18 mg/dL and eA1C 6.22±0.46 vs 7.26±0.84) and sustained for 6 months period

(131.03±13.70 mg/dL and eA1C 6.19±0.47).

Along the 6 months period, hypo events (<50mg/dL) per user per month on average remained stable.

In August 2019

another study was presented at the AADE 2019 in Atlanta.

The study evaluated the “Impact of Digital Intervention on In-range

Glucose Levels in Users with Diabetes.”

The study results showed 6% improvement in average blood glucose levels over 3 months

intervention program for a group of 162 users.

A 39% increase in the in-range measurements was observed in a subgroup of 101 patients

who started with average blood glucose levels of over 140mg/dL.

In February 2020,

we presented an additional clinical study at the Advanced Technologies & Treatments for Diabetes (“ATTD”)

conference in Madrid, Spain.

The presented data shows the Dario digital therapeutics platform successfully assists insulin dependent

patients with diabetes in reducing hypoglycemic events.

Decrease in Hypoglycemia Events Over Two Years

in Patients Monitoring with Dario’s Digital Diabetes Management System

In August 2019 another study was presented at the AADE 2019 in Atlanta.

The study evaluated the “Impact of Digital Intervention on In-range Glucose Levels in Users with Diabetes.” The study results showed 6% improvement in average blood glucose levels over 3 months intervention program for a group of 162 users.

A 39% increase in the in-range measurements was observed in a subgroup of 101 patients who started with average blood glucose levels of over 140mg/dL.

In February 2020, we presented an additional clinical study at the Advanced Technologies & Treatments for Diabetes (“ATTD”) conference in Madrid, Spain.

The presented data shows the Dario digital therapeutics platform successfully assists insulin dependent patients with diabetes in reducing hypoglycemic events.

Decrease in Hypoglycemia Events Over Two Years in Patients Monitoring with Dario’s Digital Diabetes Management System

A retrospective data analysis was performed on the Dario real-world database.

Insulin dependent of users with type 1

or type 2 diabetes population was evaluated for two year of continuous system use.

Average numbers of level 1 hypoglycemia (<70mg/dL)

and level 2 hypoglycemia (<54 mg/dL) events were calculated monthly and compared to baseline (first month).

For 1481 type 1 and type 2 insulin dependent users, average of level 1 hypoglycemia events and level 2 were reduced

by 24% and by 17% after 6 months and by 50% and 57% after 2 years vs.

Insulin dependent of users with type 1 or type 2 diabetes population was evaluated for two year of continuous system use.

Average numbers of level 1 hypoglycemia (<70mg/dL) and level 2 hypoglycemia (<54 mg/dL) events were calculated monthly and compared to baseline (first month).

For 1481 type 1 and type 2 insulin dependent users, average of level 1 hypoglycemia events and level 2 were reduced by 24% and by 17% after 6 months and by 50% and 57% after 2 years vs.

baseline respectively.

Users with type 1 diabetes (N=363)

reduced level 1 hypoglycemia events by 50% and Level 2 by 55% after 2 years.

Moreover, a 40% reduction in high blood glucose readings

was observed as well after 2 years.

In November 2020,

we presented additional clinical study data at the Virtual Diabetes Technology Society (DTS) meeting.

The presented data indicated

the potential for a digital diabetes management solution to effect and sustain glycemic control improvements and demonstrated long

term reduction of blood glucose average (eA1c) and glycemic variability in type 2 diabetes over two years.

The system assists users

through a variety of mechanisms including behavior modification in diabetes self-management and in long-term routines for self-care.

Users with type 1 diabetes (N=363) reduced level 1 hypoglycemia events by 50% and Level 2 by 55% after 2 years.

Moreover, a 40% reduction in high blood glucose readings was observed as well after 2 years.

In November 2020, we presented additional clinical study data at the Virtual Diabetes Technology Society (DTS) meeting.

The presented data indicated the potential for a digital diabetes management solution to effect and sustain glycemic control improvements and demonstrated long term reduction of blood glucose average (eA1c) and glycemic variability in type 2 diabetes over two years.

The system assists users through a variety of mechanisms including behavior modification in diabetes self-management and in long-term routines for self-care.

The Effect of a Digital Therapeutic Platform on Glycemic Control in Adults above Age 65 with Type 2 Diabetes.

Reduction of 13% blood glucose average in age group ≥65 (N=298) at six months by 13% sustained for 12 months.

Reduction of 38.1% in high readings ratio (>250 mg/dL) in the ≥65 age group at six months and by 41.5% at 12 months.

A retrospective study of high-risk users (BG avg >180 mg/dL equivalent to e A1c 8.0) 2 with type 2 diabetes that measured their

blood glucose using the Dario®

platform database over two consecutive years was performed.

The minimum engagement level for

inclusion was at least two blood glucose measurements per day on average taken in Month 1 and Month 24.

Actual blood glucose readings

were taken by the Dario meter and loaded into the cloud database.

These were evaluated for the blood glucose average (BGavg), estimated

A1c (eA1c)values and glycemic variability (by Standard Deviation;

Reduction of 13% blood glucose average in age group ≥65 (N=298) at six months by 13% sustained for 12 months.

Reduction of 38.1% in high readings ratio (>250 mg/dL) in the ≥65 age group at six months and by 41.5% at 12 months.

A retrospective study of high-risk users (BG avg >180 mg/dL equivalent to e A1c 8.0) 2 with type 2 diabetes that measured their blood glucose using the Dario® platform database over two consecutive years was performed.

The minimum engagement level for inclusion was at least two blood glucose measurements per day on average taken in Month 1 and Month 24.

Actual blood glucose readings were taken by the Dario meter and loaded into the cloud database.

These were evaluated for the blood glucose average (BGavg), estimated A1c (eA1c)values and glycemic variability (by Standard Deviation;

SD) following 24 months compared to the first month (baseline).

368 high-risk, T2D active and engaged users for at least consecutive 2 years were identified and assessed for their risk-level

and insulin usage.

A group of 148 T2D, non-Insulin users that started with a blood glucose average (BG avg) >180 mg/dl (equivalent

to eA1c>8.0) consistently reduced their BG avg by 18% on average and sustained these values (179±45 vs.

219±56

368 high-risk, T2D active and engaged users for at least consecutive 2 years were identified and assessed for their risk-level and insulin usage.

A group of 148 T2D, non-Insulin users that started with a blood glucose average (BG avg) >180 mg/dl (equivalent to eA1c>8.0) consistently reduced their BG avg by 18% on average and sustained these values (179±45 vs.

219±56 mg/dL) following 2 years on the Dario platform.

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Substantial reductions were observed for higher risk groups (insulin and non-insulin treated).

The subset that started with average

BG levels > 212 mg/dL (eA1c >9.0) and average BG levels >240 mg/dL (eA1c>10) reduced their average BG by 22.5% and

25.7% respectively on average over two years.

The subset that started with average BG levels > 212 mg/dL (eA1c >9.0) and average BG levels >240 mg/dL (eA1c>10) reduced their average BG by 22.5% and 25.7% respectively on average over two years.

The equivalent reductions in eA1c were 1.95% and 2.42%

In August 2020, we

presented an additional clinical study at the Virtual Association of Diabetes Care & Education Specialists (ADCES) conference.

In August 2020, we presented an additional clinical study at the Virtual Association of Diabetes Care & Education Specialists (ADCES) conference.

The presented observational study data demonstrated better glycemic and blood pressure control.

Patients using an integrated chronic

disease management digital platform have the potential to improve user activation which may assist to better manage their blood

glucose and blood pressure levels and sustain behavioral change.

Patients using an integrated chronic disease management digital platform have the potential to improve user activation which may assist to better manage their blood glucose and blood pressure levels and sustain behavioral change.

Impact of Digital Management on Clinical Outcome in Patients with Chronic Conditions:

Hypertension.

Diabetes and Hypertension.

Hypertension:

Increase in normal level % measurements from 6% to 12% while hypertension stage

2 measurements decreased from 53% to 45%.

70% of the users (243 out of 345) improved their blood pressure levels by 8.4 mmHg Systolic

and 6.2 mmHg on average.

Increase in normal level % measurements from 6% to 12% while hypertension stage 2 measurements decreased from 53% to 45%.

70% of the users (243 out of 345) improved their blood pressure levels by 8.4 mmHg Systolic and 6.2 mmHg on average.

Glucose levels:

A reduction of 33% in

high readings (>250 mg/dL) and 67% in severe events (>400 mg/dL) was observed over six months .

A reduction of 33% in high readings (>250 mg/dL) and 67% in severe events (>400 mg/dL) was observed over six months .

A retrospective data evaluation study was performed on the Dario TM cloud database.

A population of active

users that measured both blood pressure and blood glucose for at least 3 months was observed.

Blood pressure and blood glucose

levels were evaluated.

A population of active users that measured both blood pressure and blood glucose for at least 3 months was observed.

Blood pressure and blood glucose levels were evaluated.

First month measuring on Dario platform was used as study baseline.

Clinical outcomes examined were blood

pressure values, percentage of blood pressure categories, average blood glucose (BGavg) and high blood glucose readings (>250

mg/dL, >400 mg/dL) ratios.

A group of 345 active users started at baseline with Hypertension stage 1, 2 or hypertensive crisis levels and measured

following 3 months was evaluated.

Clinical outcomes examined were blood pressure values, percentage of blood pressure categories, average blood glucose (BGavg) and high blood glucose readings (>250 mg/dL, >400 mg/dL) ratios.

A group of 345 active users started at baseline with Hypertension stage 1, 2 or hypertensive crisis levels and measured following 3 months was evaluated.

● Blood pressure:

o Normal levels increased from 6% to 12% and percentage of users with hypertension stage 2 decreased

from 53% to 45%

o 70% of the users (243 out of 345) improved their blood pressure levels in 8.4 mmHg Systolic and

6.2 mmHg on average (Systolic 134.2±12 vs.142.6±14;

Diastolic 89.9 ±11 vs.83.7 ±8.7)

o Normal levels increased from 6% to 12% and percentage of users with hypertension stage 2 decreased from 53% to 45%

o 70% of the users (243 out of 345) improved their blood pressure levels in 8.4 mmHg Systolic and 6.2 mmHg on average (Systolic 134.2±12 vs.142.6±14;

Diastolic 89.9 ±11 vs.83.7 ±8.7)

● Blood Glucose:

o A group of 345 users measured with Dario their blood glucose in addition to blood pressure, 89%

are type 2 and pre-diabetes - average age is 60.4.

o For the group of 345 users a reduction of 33% (5.4% vs.8.0%) in high readings ratio (>250 mg/dL)

and 67% (0.3%vs.0.9%) in severe events ratio (>400 mg/dL) was observed following six months on average.

A subset of 114 users

with diabetes in higher risk started with BG average >160 mg/dL improved their average blood glucose by 14% (207±47 vs.177±50

mg/dL) following six months.

In June 2020, we presented

two clinical studies at the ADA Virtual conference.

o A group of 345 users measured with Dario their blood glucose in addition to blood pressure, 89% are type 2 and pre-diabetes - average age is 60.4.

o For the group of 345 users a reduction of 33% (5.4% vs.8.0%) in high readings ratio (>250 mg/dL) and 67% (0.3%vs.0.9%) in severe events ratio (>400 mg/dL) was observed following six months on average.

A subset of 114 users with diabetes in higher risk started with BG average >160 mg/dL improved their average blood glucose by 14% (207±47 vs.177±50 mg/dL) following six months.

In June 2020, we presented two clinical studies at the ADA Virtual conference.

The presented data from these studies showed:

The use of a digital diabetes platform resulted in a large population are consistent with previous

studies and show the potential to promote behavior modification in users with T2D.

The study demonstrated that digital management

platforms may assist user to better control their blood glucose levels and sustain behavioral change.

This observational data presented

an improvement in high glycemia readings ratios, and an increase in prediabetes fasting blood glucose levels sustained over one

The additional study confirmed the potential of digital diabetes solutions to sustain glycemic

achievements in users with type 2 diabetes over two years.

The system may assist the users to experience an actual behavior modification

in their diabetes self-management as well as in their long-term routine for self-care.

Users with type 2 diabetes using a digital platform experienced

sustained improvement in blood glucose levels.

A retrospective data evaluation (Q1:2018-2019) was performed on the Dario ®

A population of active

users (18 measurements per month with the Dario ®

System on average) with T2D, non-Insulin treated was evaluated

over a full year.

High blood glucose readings (180-400 mg/dL, >250 mg/dL), fasting readings (<126 mg/dL) and post-meal readings

(<180mg/dL) ratios were assessed in their first month of use until the 12 th month.

For 9,200 users with T2D, non-Insulin users, the average ratio of high glycemia events (180-400 mg/dL) from entire set of measurements

was reduced by 26% (18.62% vs.

● The use of a digital diabetes platform resulted in a large population are consistent with previous studies and show the potential to promote behavior modification in users with T2D.

The study demonstrated that digital management platforms may assist user to better control their blood glucose levels and sustain behavioral change.

This observational data presented an improvement in high glycemia readings ratios, and an increase in prediabetes fasting blood glucose levels sustained over one year.

● The additional study confirmed the potential of digital diabetes solutions to sustain glycemic achievements in users with type 2 diabetes over two years.

The system may assist the users to experience an actual behavior modification in their diabetes self-management as well as in their long-term routine for self-care.

Users with type 2 diabetes using a digital platform experienced sustained improvement in blood glucose levels.

A retrospective data evaluation (Q1:2018-2019) was performed on the Dario ® data base.

A population of active users (18 measurements per month with the Dario ® System on average) with T2D, non-Insulin treated was evaluated over a full year.

High blood glucose readings (180-400 mg/dL, >250 mg/dL), fasting readings (<126 mg/dL) and post-meal readings (<180mg/dL) ratios were assessed in their first month of use until the 12 th month.

For 9,200 users with T2D, non-Insulin users, the average ratio of high glycemia events (180-400 mg/dL) from entire set of measurements was reduced by 26% (18.62% vs.

23.43%) while readings of >250mg/dL were reduced by 33% (4.65% vs.

6.93%) over a year.

measurements analysis revealed an increase of 16% in ratios of readings <126 mg/dL per entire set of fasting measurements (40.59%

Fasting measurements analysis revealed an increase of 16% in ratios of readings <126 mg/dL per entire set of fasting measurements (40.59% vs.

34.92%) on average.

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70.42%) on average over a year.

Estimated A1C Reduction in High-Risk Patients over Two

Years of Using a Digital Diabetes Management Platform

A retrospective data evaluation study was performed on high-risk users with type 2 diabetes that measured their blood glucose using

platform database for two consecutive years.

The study assessed BGavg, estimated A1c (eA1c) values and

glycemic variability following 24 months compared to the first month (baseline).

Estimated A1C Reduction in High-Risk Patients over Two Years of Using a Digital Diabetes Management Platform

A retrospective data evaluation study was performed on high-risk users with type 2 diabetes that measured their blood glucose using Dario ® platform database for two consecutive years.

The study assessed BGavg, estimated A1c (eA1c) values and glycemic variability following 24 months compared to the first month (baseline).

A group of 148 high-risk users with type 2 diabetes, non-Insulin treated was evaluated.

Their BGavg was of >180mg/dL (eA1c>8.0)

for users taking &sim;

2 blood glucose measurements per day in the

first month and in the 24 th month on average.

Their BGavg was consistently reduced by 18% and sustained (179±45

219±56 mg/dL) and eA1c was reduced by 1.5 percentage points (9.26±1.3 vs.

7.86±1.8).

Glycemic variability

was reduced by 20% (SD:

Their BGavg was of >180mg/dL (eA1c>8.0) for users taking ∼ 2 blood glucose measurements per day in the first month and in the 24 th month on average.

Their BGavg was consistently reduced by 18% and sustained (179±45 vs.

219±56 mg/dL) and eA1c was reduced by 1.5 percentage points (9.26±1.3 vs.

Glycemic variability was reduced by 20% (SD:

56) at the end of 2 years.

Additional analysis of 220 users with type 2 diabetes,147 started with

eA1c >9.0% and 73 started with eA1c >10%, revealed substantial eA1c reduction of 2.0 percentage points (10.31 ±

8.36 ±

1.2%) and 2.4 percentage points (11.15 ±

8.73% ±

Additional analysis of 220 users with type 2 diabetes,147 started with eA1c >9.0% and 73 started with eA1c >10%, revealed substantial eA1c reduction of 2.0 percentage points (10.31 ± 1.8% vs.

8.36 ± 1.2%) and 2.4 percentage points (11.15 ± 1.2% vs.

8.73% ± 2.1%) from baseline after 2 years, respectively.

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74, respectively).

The potential benefit of implementing a real-time digital diabetes intervention journey to recognize episodes of high blood glucose measurement clusters and assist patients in improving self-management and clinical outcomes.

A retrospective data evaluation study was performed on a population of 3,609 users who experienced a cluster event of frequent high blood glucose levels above 250 mg/dL (>=4 times in 4 different days along 7 days) and measured with Dario at least one month before and after the event during 2021.

A group of 1,084 users was assigned to a Test group who experienced a digital intervention flow with personalized messages via various channels.

The remaining 2,525 users were assigned to a Control group.

The clinical outcome examined was the monthly average of high blood glucose readings ratio calculated as the number of blood glucose measurements >250 mg/dL per total number of measurements in a month.

This was measured during the event month and in the following month.

T-test was used to compare the changes in high readings ratio in the Test group and Control group in the following month versus event month.

A significant difference of 19% vs.

control group (N=3,609), 18% for the group with type 2 (N=2307) and 42% for the group with type 2 non-insulin, in the reduction in average monthly ratio of high readings (above 250 mg/dL) per total blood glucose measurements in the following month.

The results indicate personalized communications are effectively influencing positive lifestyle behavior change

A group of 454 users experienced the cluster event in a 6-month period before the digital journey was activated and after.

A significant difference was observed after the digital journey versus before the digital journey in the following month's change in high readings ratio (-8% vs.

P-value <0.03)

Product updates to digital platforms that guide on healthy eating and help users understand their glucose readings in context may assist users in improving the management of their diabetes.

A retrospective data evaluation study was performed on Dario TM members during the time before and after product modification.

Digital engagement and clinical outcomes were measured on first to six months per each period to examine if habit formation was achieved.

A group of total 9794 users who had enrolled in a membership for 6 months or longer was evaluated.

The ratio of measurements logged with context (fasting, pre-meal, post-meal, bedtime) was increased significantly by 56% in the first month following product modification on average (51.3%.

32.8%) (P<0.001).

Differences in the level of digital engagement remained stable over a 6 months period.

The average number of days between measurements, i.e.

“recency” decreased by 21% on average (2.71 vs.

Average ratios of high readings (180-400 mg/dL) were reduced by 12% on average over six months.

Digital diabetes platform has the potential to enhance self-care behaviors across socioeconomic statuses and among different language speakers.

A retrospective data evaluation study was performed on the Dario TM data base.

A population (“high-risk users”) of all users with type 2 diabetes activated during 2017-2020 who took measurements with Dario in the first 2 months and who started with an average blood glucose above 180 mg/dL was evaluated.

The ratios assessed were target range (70-180 mg/dL) and high blood glucose (>180 mg/dL) readings over a year.

Socioeconomic status was matched by applying zip code data to census.gov data.

For 11,101 users, the average ratio of target range readings (70-180 mg/dL) was significantly increased from 28.4% to 54.8% (P<0.001).

Average high events ratio (>180 mg/dL) was significantly reduced from 71.3% to 44.4% over a full year usage (P<0.001).

The change appeared in the earliest months and was maintained over a year.

Average number of days between measurements, i.e., “recency” was 3.3 days.

A subset of Spanish language app users (N=169) was also evaluated, and comparable trends were observed.

Matching Census.gov data on study population showed that 20% of users resided in low income zip codes, 70% in middle and 10% in upper income zip codes.

The benefit of implementing a digital diabetes interaction platform to durably improve self-management among users who had not recently measured their blood glucose.

A retrospective study was performed on a population of 246 Dario active members who had not measured blood glucose for a 7-day period.

127 of these users were randomly assigned to a Test group and experienced a digital intervention flow, and the remaining 119 users were assigned to a Control group.

Digital engagement levels were observed following 60 days in both groups.

Differences between Test group and Control group were observed.

In the Test group, the percent of users who measured blood glucose was significantly higher (P<0.001):

14% in first 30 days and 22% in 30-60 days;

average number of measurements was 6% higher in the first 30 days and 17% in 30-60 days;

number of interactions (e.g.

logging fasting glucose) with the digital platform was 10% higher in first 30 days and 15% in 30-60 days.

Difference in average days between measurements, defined as “recency” was 30% lower in the test group.

The potential benefit of a digital diabetes management platform in the self-management required from insulin treated users, incorporating its use on a daily base, and sustaining behavioral change.

A retrospective study was performed on a population of 285 active Dario users (85% with type 2) under insulin therapy, that measured with Dario for at least three months and logged basal insulin usage.

The group included 112 users whose starting average blood glucose >180 mg/dL.

Among this group the average age was 55.

The group also included 173 users whose starting average blood glucose was <180 mg/dL with average age 59.

First month measuring on platform was used as study baseline.

In the sub-group of 112 users the average amount of basal insulin increased by six units after three months (45 vs.39).

Their fasting blood glucose was significantly reduced (9%) after three months (186±40.6 vs.

204±42.7) without change in hypoglycemia events ratio (<70 mg/dL) on average, and 15% of the users reduced their fasting average to <126 mg/dL.

However, in the sub-group of 173 users, basal insulin usage and fasting glucose levels remained stable following three months.

Government Regulation

The principal markets

that we have initially targeted for Dario are the United States, Canada, the European Union, Australia, and New Zealand.

following is an overview of the regulatory regimes in these jurisdictions.

United States Regulation

In the United States,

devices are subject to varying levels of regulatory control, the most comprehensive of which requires that a clinical evaluation

is conducted before a device receives clearance for commercial distribution.

Under Section 201(h) of the Food,

Drug, and Cosmetic Act, a medical device is an article, which, among other things, is intended for use in the diagnosis of disease

or other conditions, or in the cure, mitigation, treatment or prevention of disease, in man or other animals.

Blood Glucose Monitoring System is classified as a medical device and subject to regulation by numerous agencies and legislative

bodies, including the FDA and its foreign counterparts.

FDA regulations govern product design and development, pre-clinical

and clinical testing, manufacturing, labeling, storage, pre-market clearance or approval, advertising and promotion, and sales

and distribution.

The principal markets that we have initially targeted for Dario are the United States, Canada, the European Union, Australia, and New Zealand.

The following is an overview of the regulatory regimes in these jurisdictions.

United States Regulation Generally

In the United States, devices are subject to varying levels of regulatory control, the most comprehensive of which requires that a clinical evaluation is conducted before a device receives clearance for commercial distribution.

Under Section 201(h) of the Food, Drug, and Cosmetic Act, a medical device is an article, which, among other things, is intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment or prevention of disease, in man or other animals.

The Dario Blood Glucose Monitoring System is classified as a medical device and subject to regulation by numerous agencies and legislative bodies, including the FDA and its foreign counterparts.

FDA regulations govern product design and development, pre-clinical and clinical testing, manufacturing, labeling, storage, pre-market clearance or approval, advertising and promotion, and sales and distribution.

Specifically, the FDA classifies medical devices into one of three classes.

Class I devices

are relatively simple and can be manufactured and distributed with general controls.

Class II devices are somewhat

more complex and require greater scrutiny.

Class I devices are relatively simple and can be manufactured and distributed with general controls.

Class II devices are somewhat more complex and require greater scrutiny.

Class III devices are new and frequently help sustain life.

Unless an exemption

applies, each medical device commercially distributed in the United States will require a 510(k) clearance, 510(k)+ “de-novo”

clearance, or pre-market approval (or PMA) from the FDA.

510(k) Clearance

After a device receives 510(k) clearance, any modification that could significantly affect

its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance

or could even require a premarket application approval.

The FDA requires each manufacturer to make this determination

in the first instance, but the FDA can review any such decision.

If the FDA disagrees with the determination, the agency

may retroactively require the manufacturer to seek 510(k) clearance or premarket application approval.

also can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or premarket

application approval is obtained.

Novo Classification .

If the FDA denies 510(k) clearance of a device because it is novel and an

adequate predicate device does not exist, the “de novo classification”

procedure can be invoked based upon a reasonable

assurance that the device is safe and effective for its intended use.

This procedure approximates the level of scrutiny

in the 510(k) process but may add several months to the clearance process.

If the FDA grants the request, the device is permitted

to enter commercial distribution in the same manner as if 510(k) clearance had been granted.

Application Approval Process .

After approval of a premarket application, a new premarket application or

premarket application supplement is required in the event of a modification to the device, its labeling or its manufacturing process.

premarket application approval pathway is much more costly, lengthy and uncertain.

It generally takes from one to three

years or longer.

European and Non-European

Regulation Generally

Sales of medical devices

outside the United States are subject to foreign regulatory requirements that vary widely from country to country.

These laws and

regulations range from simple product registration requirements in some countries to complex clearance and production controls

As a result, the processes and time periods required to obtain foreign marketing clearance may be longer

or shorter than those necessary to obtain FDA clearance.

The commercialization

of medical devices in Europe is regulated by the European Union.

The European Union presently requires that all medical products

bore the CE mark, an international symbol of adherence to quality assurance standards and demonstrated clinical effectiveness.

with the Medical Device Directive (MDD) or the Active Implantable Medical Device Directive (AIMD) or the In Vitro Diagnostic Medical

Device Directive (IVDD) as audited by a notified body and certified by a recognized European Competent Authority, permits the manufacturer

to affix the CE mark on its products.

In September 2013,

we obtained ISO 13485 certification for our quality management system and CE Mark certification to market Dario, and

in May 2015 Dario was cleared to fulfill the criteria according to EN ISO 15197:2013 The granting of the CE Mark allows Dario to

be marketed and sold in 32 countries across Europe as well as in certain other countries worldwide.

On November 21, 2014,

MDSS, our European Authorized Representative, completed the registration of the Dario Blood Glucose Monitoring System with the

German Authority as required by Article 10 of Directive 98/79/EC on in vitro diagnostic medical devices.

We commenced an initial

soft launch of the product in Europe in 2014, created initial demand for the product and established brand awareness and marketing

techniques to reach our target market with a goal to continue expansion to new markets and territories.

We achieved regulatory

clearance to market Dario in other countries that do not rely on the CE Mark.

To date, the non-CE Mark jurisdictions which we have

begun to market Dario include the United States, New Zealand, Canada, and Australia.

To the extent that

we seek to market our product in other non-CE Mark countries in the future, we will be required to comply with the applicable regulatory

requirements in each such country.

Unless an exemption applies, each medical device commercially distributed in the United States will require a 510(k) clearance, 510(k)+ “de-novo” clearance, or pre-market approval (or PMA) from the FDA.

510(k) Clearance Process.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could even require a premarket application approval.

The FDA requires each manufacturer to make this determination in the first instance, but the FDA can review any such decision.

If the FDA disagrees with the determination, the agency may retroactively require the manufacturer to seek 510(k) clearance or premarket application approval.

The FDA also can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or premarket application approval is obtained.

De Novo Classification .

If the FDA denies 510(k) clearance of a device because it is novel and an adequate predicate device does not exist, the “de novo classification” procedure can be invoked based upon a reasonable assurance that the device is safe and effective for its intended use.

This procedure approximates the level of scrutiny in the 510(k) process but may add several months to the clearance process.

If the FDA grants the request, the device is permitted to enter commercial distribution in the same manner as if 510(k) clearance had been granted.

Premarket Application Approval Process .

After approval of a premarket application, a new premarket application or premarket application supplement is required in the event of a modification to the device, its labeling or its manufacturing process.

The premarket application approval pathway is much more costly, lengthy and uncertain.

It generally takes from one to three years or longer.

European and Non-European Regulation Generally

Sales of medical devices outside the United States are subject to foreign regulatory requirements that vary widely from country to country.

These laws and regulations range from simple product registration requirements in some countries to complex clearance and production controls in others.

As a result, the processes and time periods required to obtain foreign marketing clearance may be longer or shorter than those necessary to obtain FDA clearance.

The commercialization of medical devices in Europe is regulated by the European Union.

The European Union presently requires that all medical products bore the CE mark, an international symbol of adherence to quality assurance standards and demonstrated clinical effectiveness.

Compliance with the Medical Device Directive (MDD) or the Active Implantable Medical Device Directive (AIMD) or the In Vitro Diagnostic Medical Device Directive (IVDD) as audited by a notified body and certified by a recognized European Competent Authority, permits the manufacturer to affix the CE mark on its products.

In September 2013, we obtained ISO 13485 certification for our quality management system and CE Mark certification to market Dario, and in May 2015 Dario was cleared to fulfill the criteria according to EN ISO 15197:2013 The granting of the CE Mark allows Dario to be marketed and sold in 32 countries across Europe as well as in certain other countries worldwide.

On November 21, 2014, MDSS, our European Authorized Representative, completed the registration of the Dario Blood Glucose Monitoring System with the German Authority as required by Article 10 of Directive 98/79/EC on in vitro diagnostic medical devices.

We commenced an initial soft launch of the product in Europe in 2014, created initial demand for the product and established brand awareness and marketing techniques to reach our target market with a goal to continue expansion to new markets and territories.

We achieved regulatory clearance to market Dario in other countries that do not rely on the CE Mark.

To date, the non-CE Mark jurisdictions which we have begun to market Dario include the United States, New Zealand, Canada, and Australia.

To the extent that we seek to market our product in other non-CE Mark countries in the future, we will be required to comply with the applicable regulatory requirements in each such country.

Such regulatory requirements vary by country and may be tedious.

result, no assurance can be given that we will be able to satisfy the regulatory requirements to sell our products in any such

As a result, no assurance can be given that we will be able to satisfy the regulatory requirements to sell our products in any such country.

Clinical Studies

Even when a clinical

study has an approved Investigational Device Exemption (IDE) from the FDA under significant risk (SR) determination, has been approved

by an Institutional Review Board (IRB) under non-significant risk (NSR) determination and/or has been approved by local or regional

Ethics Committee, the study is subject to factors beyond a manufacturer’s control, including, but not limited

to the fact that the institutional review board at a given clinical site might not approve the study, might decline to renew approval

which is required annually, or might suspend or terminate the study before the study has been completed.

There is no assurance

that a clinical study at any given site will progress as anticipated;

the interim results of a study may not be satisfactory leading

the sponsor or others to terminate the study, there may be an insufficient number of patients who qualify for the study or who

agree to participate in the study or the investigator at the site may have priorities other than the study.

can be no assurance that the clinical study will provide sufficient evidence to assure regulatory authorities that the product

is safe, effective and performs as intended as a prerequisite for granting market clearance.

See “Clinical Trials”

above for clinical trials performed to date.

Even when a clinical study has an approved Investigational Device Exemption (IDE) from the FDA under significant risk (SR) determination, has been approved by an Institutional Review Board (IRB) under non-significant risk (NSR) determination and/or has been approved by local or regional Ethics Committee, the study is subject to factors beyond a manufacturer’s control, including, but not limited to the fact that the institutional review board at a given clinical site might not approve the study, might decline to renew approval which is required annually, or might suspend or terminate the study before the study has been completed.

There is no assurance that a clinical study at any given site will progress as anticipated;

the interim results of a study may not be satisfactory leading the sponsor or others to terminate the study, there may be an insufficient number of patients who qualify for the study or who agree to participate in the study or the investigator at the site may have priorities other than the study.

Also, there can be no assurance that the clinical study will provide sufficient evidence to assure regulatory authorities that the product is safe, effective and performs as intended as a prerequisite for granting market clearance.

See “Clinical Trials” above for clinical trials performed to date.

Post-Clearance Matters

Even if the FDA or

other non-US regulatory authorities approve or clear a device, they may limit its intended uses in such a way that manufacturing

and distributing the device may not be commercially feasible.

After clearance or approval to market is given, the FDA and foreign

regulatory agencies, upon the occurrence of certain events, are authorized under various circumstances to withdraw the clearance

or approval or require changes to a device, its manufacturing process or its labeling or additional proof that regulatory requirements

have been met.

A manufacturer of a

device approved through the premarket approval application process is not permitted to make changes to the device which

affects its safety or effectiveness without first submitting a supplement application to its premarket approval application

and obtaining FDA clearance for that supplement.

In some instances, the FDA may require a clinical trial to support

a supplement application.

A manufacturer of a device cleared through a 510(k) submission or a 510(k)+ “de-novo”

submission must submit another premarket notification if it intends to make a change or modification in the device that could significantly

affect the safety or effectiveness of the device, such as a significant change or modification in design, material, chemical composition,

energy source or manufacturing process.

Any change in the intended uses of a premarket approval application device

or a 510(k) device requires an approval supplement or cleared premarket notification.

Exported devices are subject

to the regulatory requirements of each country to which the device is exported, as well as certain FDA export requirements.

Even if the FDA or other non-US regulatory authorities approve or clear a device, they may limit its intended uses in such a way that manufacturing and distributing the device may not be commercially feasible.

After clearance or approval to market is given, the FDA and foreign regulatory agencies, upon the occurrence of certain events, are authorized under various circumstances to withdraw the clearance or approval or require changes to a device, its manufacturing process or its labeling or additional proof that regulatory requirements have been met.

A manufacturer of a device approved through the premarket approval application process is not permitted to make changes to the device which affects its safety or effectiveness without first submitting a supplement application to its premarket approval application and obtaining FDA clearance for that supplement.

In some instances, the FDA may require a clinical trial to support a supplement application.

A manufacturer of a device cleared through a 510(k) submission or a 510(k)+ “de-novo” submission must submit another premarket notification if it intends to make a change or modification in the device that could significantly affect the safety or effectiveness of the device, such as a significant change or modification in design, material, chemical composition, energy source or manufacturing process.

Any change in the intended uses of a premarket approval application device or a 510(k) device requires an approval supplement or cleared premarket notification.

Exported devices are subject to the regulatory requirements of each country to which the device is exported, as well as certain FDA export requirements.

Mobile Medical Applications Guidance

On September 23,

2013, the FDA issued final guidance for developers of mobile medical applications, or apps, which are software programs that run

on mobile communication devices and perform the same functions as traditional medical devices.

The guidance outlines

the FDA’s tailored approach to mobile apps.

The FDA plans to exercise enforcement discretion (meaning it will not enforce

requirements under the Federal Food, Drug & Cosmetic Act) for the majority of mobile apps as they pose minimal risk to

The FDA plans to focus its regulatory oversight on a subset of mobile medical apps that present a greater

risk to patients if they do not work as intended.

On September 23, 2013, the FDA issued final guidance for developers of mobile medical applications, or apps, which are software programs that run on mobile communication devices and perform the same functions as traditional

medical devices.

The guidance outlines the FDA’s tailored approach to mobile apps.

The FDA plans to exercise enforcement discretion (meaning it will not enforce requirements under the Federal Food, Drug & Cosmetic Act) for the majority of mobile apps as they pose minimal risk to consumers.

The FDA plans to focus its regulatory oversight on a subset of mobile medical apps that present a greater risk to patients if they do not work as intended.

The FDA is focusing its oversight on mobile medical apps that:

are intended to be used as an accessory to a regulated medical device –

for example, an application that allows a health care professional to make a specific diagnosis by viewing a medical image from a picture archiving and communication system (PACS) on a smart mobile device or a mobile tablet;

transform a mobile platform into a regulated medical device –

for example, an application that turns a smart mobile device into an electrocardiography (ECG) machine to detect abnormal heart rhythms or determine if a patient is experiencing a heart attack.

● are intended to be used as an accessory to a regulated medical device – for example, an application that allows a health care professional to make a specific diagnosis by viewing a medical image from a picture archiving and communication system (PACS) on a smart mobile device or a mobile tablet;

● transform a mobile platform into a regulated medical device – for example, an application that turns a smart mobile device into an electrocardiography (ECG) machine to detect abnormal heart rhythms or determine if a patient is experiencing a heart attack.

Ongoing Regulation by FDA

Even after a device

receives clearance or approval and is placed on the market, numerous regulatory requirements apply.

Even after a device receives clearance or approval and is placed on the market, numerous regulatory requirements apply.

These include:

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● quality system regulation, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation, and other quality assurance procedures during all phases of the product life-cycle;

labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label”

uses, and other requirements related to promotional activities;

● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses, and other requirements related to promotional activities;

● medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur;

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● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device.

Failure to comply with

applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

fines, injunctions, civil or criminal penalties, recall or seizure of our current or future products, operating restrictions, partial

suspension or total shutdown of production, refusing our request for 510(k) clearance or PMA approval of new products, rescinding

previously granted 510(k) clearances or withdrawing previously granted PMA approvals.

We may be subject to

announced and unannounced inspections by the FDA, and these inspections may include the manufacturing facilities of our subcontractors.

If, as a result of these inspections, the FDA determines that our or our subcontractor’s equipment, facilities, laboratories

or processes do not comply with applicable FDA regulations and conditions of product clearance, the FDA may seek civil, criminal

or administrative sanctions and/or remedies against us, including the suspension of our manufacturing and selling operations.

Ongoing Regulation

by International Regulators

International sales

of medical devices are subject to foreign government regulations, which may vary substantially from country to country.

In order to maintain

the right to affix the CE Mark to sell medical devices in the European Union, an annual surveillance audit in the company premises

and, if needed, at major subcontractors’

premises needs to be carried out by the notified body.

Additionally,

European Directives dictate the following requirements:

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

fines, injunctions, civil or criminal penalties, recall or seizure of our current or future products, operating restrictions, partial suspension or total shutdown of production, refusing our request for 510(k) clearance or PMA approval of new products, rescinding previously granted 510(k) clearances or withdrawing previously granted PMA approvals.

We may be subject to announced and unannounced inspections by the FDA, and these inspections may include the manufacturing facilities of our subcontractors.

If, as a result of these inspections, the FDA determines that our or our subcontractor’s equipment, facilities, laboratories or processes do not comply with applicable FDA regulations and conditions of product clearance, the FDA may seek civil, criminal or administrative sanctions and/or remedies against us, including the suspension of our manufacturing and selling operations.

Ongoing Regulation by International Regulators

International sales of medical devices are subject to foreign government regulations, which may vary substantially from country to country.

In order to maintain the right to affix the CE Mark to sell medical devices in the European Union, an annual surveillance audit in the company premises and, if needed, at major subcontractors’ premises needs to be carried out by the notified body.

Additionally, European Directives dictate the following requirements:

● Vigilance system, which requires the manufacturer to immediately notify the relevant Competent Authority when a company product has been involved in an incident that led to a death;

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● Post-market surveillance including a documented procedure to review experience gained from devices on the market and to implement any necessary corrective action, commensurate with nature and risks involved with the product.

Failure to comply with

applicable regulatory requirements can result in enforcement action by the regulatory agency, which may include any of the following

fines, injunctions, civil or criminal penalties, recall or seizure of our current or future products, operating restrictions,

partial suspension or total shutdown of production, refusing our request for renewing clearance and/or registration of our products

or granting clearance/registration for new products.

State Licensure

Several states require

that Durable Medical Equipment (“DME”) providers be licensed in order to sell products to patients in that state.

of these states require that DME providers maintain an in-state location.

If these rules are determined to be applicable to

us and if we were found to be noncompliant, we could lose our licensure in that state, which could prohibit us from selling our

current or future products to patients in that state.

Federal Anti-Kickback

and Self-Referral Laws

The Federal Anti-Kickback

Statute prohibits the knowing and willful offer, payment, solicitation or receipt of any form of remuneration in return for, or

to induce the:

Failure to comply with applicable regulatory requirements can result in enforcement action by the regulatory agency, which may include any of the following sanctions:

fines, injunctions, civil or criminal penalties, recall or seizure of our current or future products, operating restrictions, partial suspension or total shutdown of production, refusing our request for renewing clearance and/or registration of our products or granting clearance/registration for new products.

State Licensure Requirements

Several states require that Durable Medical Equipment (“DME”) providers be licensed in order to sell products to patients in that state.

Certain of these states require that DME providers maintain an in-state location.

If these rules are determined to be applicable to us and if we were found to be noncompliant, we could lose our licensure in that state, which could prohibit us from selling our current or future products to patients in that state.

Federal Anti-Kickback and Self-Referral Laws

The Federal Anti-Kickback Statute prohibits the knowing and willful offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce the:

● referral of a person;

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● purchase, lease, or order of, or the arrangement or recommendation of the purchasing, leasing, or ordering of any item or service reimbursable under Medicare, Medicaid or other governmental programs.

To the extent we are

required to comply with these regulations, it is possible that regulatory authorities could allege that we have not complied, which

could subject us to sanction.

Noncompliance with the federal anti-kickback legislation can result in exclusion from

Medicare, Medicaid or other governmental programs, restrictions on our ability to operate in certain jurisdictions, as well as

civil and criminal penalties, any of which could have an adverse effect on our business and results of operations.

Federal law also includes

a provision commonly known as the “Stark Law,”

which prohibits a physician from referring Medicare or Medicaid patients

to an entity providing “designated health services,”

including a company that furnishes durable medical equipment,

in which the physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement.

Violation of the Stark Law could result in denial of payment, disgorgement of reimbursements received under a noncompliant arrangement,

civil penalties, and exclusion from Medicare, Medicaid or other governmental programs.

Federal False Claims

The Federal False Claims

Act provides, in part, that the federal government may bring a lawsuit against any person whom it believes has knowingly presented,

or caused to be presented, a false or fraudulent request for payment from the federal government, or who has made a false statement

or used a false record to get a claim approved.

In addition, amendments in 1986 to the Federal False Claims Act have

made it easier for private parties to bring “qui tam”

whistleblower lawsuits against companies.

include fines ranging from $5,500 to $11,000 for each false claim, plus three times the number of damages that the federal government

sustained because of the act of that person.

Civil Monetary Penalties

The Federal Civil Monetary

Penalties Law prohibits the offering or transferring of remuneration to a Medicare or Medicaid beneficiary that the person knows

or should know likely to influence the beneficiary’s selection of a particular supplier of Medicare or Medicaid payable items

Noncompliance can result in civil money penalties of up to $10,000 for each wrongful act, assessment of three times

the amount claimed for each item or service and exclusion from the Federal healthcare programs.

To the extent we are required to comply with these regulations, it is possible that regulatory authorities could allege that we have not complied, which could subject us to sanction.

Noncompliance with the federal anti-kickback legislation can result in exclusion from Medicare, Medicaid or other governmental programs, restrictions on our ability to operate in certain jurisdictions, as well as civil and criminal penalties, any of which could have an adverse effect on our business and results of operations.

Federal law also includes a provision commonly known as the “Stark Law,” which prohibits a physician from referring Medicare or Medicaid patients to an entity providing “designated health services,” including a company that furnishes durable medical equipment, in which the physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement.

Violation of the Stark Law could result in denial of payment, disgorgement of reimbursements received under a noncompliant arrangement, civil penalties, and exclusion from Medicare, Medicaid or other governmental programs.

Federal False Claims Act

The Federal False Claims Act provides, in part, that the federal government may bring a lawsuit against any person whom it believes has knowingly presented, or caused to be presented, a false or fraudulent request for payment from the federal government, or who has made a false statement or used a false record to get a claim approved.

amendments in 1986 to the Federal False Claims Act have made it easier for private parties to bring “qui tam” whistleblower lawsuits against companies.

Penalties include fines ranging from $5,500 to $11,000 for each false claim, plus three times the number of damages that the federal government sustained because of the act of that person.

Civil Monetary Penalties Law

The Federal Civil Monetary Penalties Law prohibits the offering or transferring of remuneration to a Medicare or Medicaid beneficiary that the person knows or should know likely to influence the beneficiary’s selection of a particular supplier of Medicare or Medicaid payable items or services.

Noncompliance can result in civil money penalties of up to $10,000 for each wrongful act, assessment of three times the amount claimed for each item or service and exclusion from the Federal healthcare programs.

State Fraud and Abuse Provisions

Many states have also

adopted some form of anti-kickback and anti-referral laws and false claims acts.

A determination of liability under such laws could

result in fines and penalties and restrictions on our ability to operate in these jurisdictions.

Administrative Simplification

of the Health Insurance Portability and Accountability Act of 1996

The Health Insurance

Portability and Accountability Act of 1996, or HIPAA, mandated the adoption of standards for the exchange of electronic health

information in an effort to encourage overall administrative simplification and enhance the effectiveness and efficiency of the

healthcare industry.

Many states have also adopted some form of anti-kickback and anti-referral laws and false claims acts.

A determination of liability under such laws could result in fines and penalties and restrictions on our ability to operate in these jurisdictions.

Administrative Simplification of the Health Insurance Portability and Accountability Act of 1996

The Health Insurance Portability and Accountability Act of 1996, or HIPAA, mandated the adoption of standards for the exchange of electronic health information in an effort to encourage overall administrative simplification and enhance the effectiveness and efficiency of the healthcare industry.

Ensuring the privacy and security of patient information is one of the key factors driving the legislation.

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Patent applications

On May 8, 2011,

certain of our founders filed a Patent Cooperation Treaty (PCT) Application No.

PCT/IL2011/000369, titled “Fluids Testing

Apparatus and Methods of Use.”

This PCT claimed priority from two preceding U.S.

provisional applications filed

by our founders, with the earliest priority date being May 9, 2010.

The PCT application was transferred to us by our founders

on October 27, 2011.

This application covers

the novel blood glucose measurement device, comprising the glucose meter;

and an adaptor that connects the glucose meter to a smart-phone

to receive power supply and data display, storage, and analysis.

A PCT search report and written opinion on patentability

that we received from World Intellectual Property Organization (known as WIPO) that included only two “Y”

and one additional non-relevant reference.

Corresponding national applications of our PCT were filed in the U.S., Europe,

Japan, China, Australia and Israel.

On May 1, 2014,

we announced the receipt of a U.S.

Notice of Allowance for a key patent relating to how the Dario Blood Glucose Monitoring System

draws power from and transmits data to a smartphone via the audio jack port.

On May 8, 2011, certain of our founders filed a Patent Cooperation Treaty (PCT) Application No.

PCT/IL2011/000369, titled “Fluids Testing Apparatus and Methods of Use.” This PCT claimed priority from two preceding U.S.

provisional applications filed by our founders, with the earliest priority date being May 9, 2010.

The PCT application was transferred to us by our founders on October 27, 2011.

This application covers the novel blood glucose measurement device, comprising the glucose meter;

and an adaptor that connects the glucose meter to a smart-phone to receive power supply and data display, storage, and analysis.

A PCT search report and written opinion on patentability that we received from World Intellectual Property Organization (known as WIPO) that included only two “Y” citations and one additional non-relevant reference.

Corresponding national applications of our PCT were filed in the U.S., Europe, Japan, China, Australia and Israel.

On May 1, 2014, we announced the receipt of a U.S.

Notice of Allowance for a key patent relating to how the Dario Blood Glucose Monitoring System draws power from and transmits data to a smartphone via the audio jack port.

This patent was issued as U.S.

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8,797,180 to include testing of other bodily fluids through an audio jack connection.

We believe these early patents represent critical intellectual

property recognition and a significant initial validation of our intellectual property efforts.

Further, a corresponding European

patent was granted to us in May 2016, as European patent No.

We believe these early patents represent critical intellectual property recognition and a significant initial validation of our intellectual property efforts.

Further, a corresponding European patent was granted to us in May 2016, as European patent No.

2569622 for testing of fluids through an audio jack connection.

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9,257,038, which is a further Continuation application connected to the U.S.

8,797,180, this new patent

enhanced the way the Dario Blood Glucose Monitoring System communicates with the end user’s smartphone devices.

In November 11,

9,832,301 titled “Systems and methods for adjusting power levels on a monitoring device”

This patent enhances the way the Dario Blood Glucose Monitoring System communicates with users’

smartphone devices.

8,797,180, this new patent enhanced the way the Dario Blood Glucose Monitoring System communicates with the end user’s smartphone devices.

In November 11, 2017, U.S.

9,832,301 titled “Systems and methods for adjusting power levels on a monitoring device” was granted.

This patent enhances the way the Dario Blood Glucose Monitoring System communicates with users’ smartphone devices.

This family includes a corresponding pending application in China.

Additionally, we recently

received U.S.

10,445,072 that enables optical communication between the Dario Blood Glucose Monitoring System and

the end user’s smartphone devices.

Additional patent applications

are in the process of being discussed and developed, and we believe that we have a rich potential pipeline of future technologies

that we intend to develop.

For example, we are

further seeking to develop and protect new intellectual property around future generations of our hardware and software with the

goal of achieving enhanced functionality, user interface, data usability, cyber protection, and artificial intelligence enhancement.

Design patents and

patent applications on the Dario Blood Glucose Monitoring System

To further protect

our market distinction and branding for the Dario Blood Glucose Monitoring System, three U.S.

Design Applications have been filed

and granted covering the glucose meter, the cartridge, and connection dongle.

At least some of these applications were granted

and registered in the United States, as well as Brazil, Canada, China, Europe, and Hong Kong.

Additionally, we recently received U.S.

10,445,072 that enables optical communication between the Dario Blood Glucose Monitoring System and the end user’s smartphone devices.

Additional patent applications are in the process of being discussed and developed, and we believe that we have a rich potential pipeline of future technologies that we intend to develop.

For example, we are further seeking to develop and protect new intellectual property around future generations of our hardware and software with the goal of achieving enhanced functionality, user interface, data usability, cyber protection, and artificial intelligence enhancement.

In 2021, we acquired Upright and acquired the following patents which were added to our portfolio:

“BODY MOVEMENT FEEDBACK SYSTEM AND METHOD”, Patent App# 15/749,335 which is in National Phase (USPTO).

The application was published Aug.

In addition, a patent on PCT rout #PCT/IL2021/050739 was filed on June 17, 2021 titled “Posture detection device and system.”

In early 2022, we acquired Physimax and acquired the following patent – US 10,709,374 B2 titled “System and Method for Assessment of Musculoskeletal Profile of a Target Individual.”

Design patents and patent applications on the Dario Blood Glucose Monitoring System

To further protect our market distinction and branding for the Dario Blood Glucose Monitoring System, three U.S.

Design Applications have been filed and granted covering the glucose meter, the cartridge, and connection dongle.

At least some of these applications were granted and registered in the United States, as well as Brazil, Canada, China, Europe, and Hong Kong.

Trademark applications

We have also filed

several families of trademark applications covering the “Dario”

name (wordmark), the Dario name and logo (logo), the

Dario logo alone (logo), the DARIO-LITE wordmark, the LABSTYLE INNOVATIONS wordmark, the DARIOHEALTH wordmark, and the DARIOHEALTH

In particular, the “Dario”

wordmark is registered as a trademark in the Australia, Canada, China,

Costa Rica, United States, Israel, China, Canada, Hong Kong, South Africa, Japan, Costa Rica, Europe, Israel, Japan,

Korea, Mexico, New Zealand, Panama, Russia, South Africa, and the USA.

The “DARIOHEALTH”

wordmark is registered as

a trademark in the United States, Canada, China and India.

We have also filed several families of trademark applications covering the “Dario” name (wordmark), the Dario name and logo (logo), the Dario logo alone (logo), the DARIO-LITE wordmark, the LABSTYLE INNOVATIONS wordmark, the DARIOHEALTH wordmark, and the DARIOHEALTH logo.

In particular, the “Dario” wordmark is registered as a trademark in the Australia, Canada, China, Costa Rica, United States, Israel, China, Canada, Hong Kong, South Africa, Japan, Costa Rica, Europe, Israel, Japan, Korea, Mexico, New Zealand, Panama, Russia, South Africa, and the USA.

The “DARIOHEALTH” wordmark is registered as a trademark in the United States, Canada, China and India.

Upright also added the following trademarks to our list:

UPRIGHT, UPRIGHT GO – registered in the US, AU and EM, and UPRIGHT DASHBOARD, UPRIGHT DESKTOP, UPRIGHT GO 2, UPRIGHT PRO, UPRIGHT POSTURE IS WITHING REACH – registered in the US.

Utility Models

We have been granted

Utility Models for our core invention in Japan and Germany.

Other intangible

As the number of Dario

users grows, an ever-growing amount of data is being collected from diabetic patients, including their blood sugar levels, meal

compositions, routines, physical exercise (intensity and duration) as well as many other factors, and lately also blood pressure

data, which are all useful for creating meaningful correlations between these factors and insulin use.

We expect that

this database will be highly valuable and may be capitalized in many ways.

The accumulation of this type of know-how and related

algorithms are protected as trade secrets using specialized confidentiality protocols.

In recent years, a

number of digitally supported solutions have emerged to manage diabetes and other chronic conditions.

Competitors are developing

new technologies rapidly and, in some cases, are also expanding to manage other chronic conditions.

In this crowded field, our

success is predicated on our flexibility to adapt to evolving customer requirements in digital health and superior execution in

engagement, retention and clinical outcomes in a manner that delivers clear return on investment in required time-horizons and

in complex, highly regulated business environments.

We expect new entrants in the field and the emergence of novel technologies,

as well as competition from larger technology platform players such as Amazon, Apple and Google.

Dario’s competitors vary

by intervention (devices, applications, coaching and analytics), by channel (health plan, pharma, provider, employer) and by condition

(including, for example, diabetes, MSK, HTN, and others).

Certain of our competitors offer this integrated approach in varying

degrees, including, among others, Hinge Health, Inc., Livongo Health Inc.

(acquired by Teladoc Health Inc.), Omada Health, Inc.,

Vida Health, Inc., Virta Health Corp., Informed Data Systems Inc.

(OneDrop), Glooko, Inc., and OnDuo LLC.

that our competitors are comparatively disadvantaged along several axes:

● Our competitors offer point solutions for a single condition (which model is unattractive to enterprise

customers needing to manage multiple vendor relationships);

● Our competitors fail to share member-level data or granular reporting with partners, which prevents

these partners from leveraging their own assets to support care;

● Competitor applications have limited or minimal levels of personalization, where communications

(or “nudge”) from the application may be somewhat personalized, but actual user experiences are heavily templated,

and not personalized or dynamic;

● Competitor applications are supported only by short term outcome data, as compared to our studies

which cover a 2-year period and offer 7 years of direct-to-consumer data;

● Failure of any one of our competitors to successfully engage and retain a substantial portion of

the base population, as none has the direct-to-consumer experience or data required, resulting in frustrated customers who cannot

realize promised cost savings;

● Customers of our competitors suffer an inadequate user experience, as evidenced by few app store

reviews and low scores in Apple, Google and Amazon stores;

● Our competitors offer medical device-oriented approaches with delayed product update cadences,

rather than our more agile, software-driven approaches that push out new products every few weeks;

● Our competitors have slowed their improvements in the area of clinical metrics (including, for

example, blood pressure, HbA1c, and pain), which decreases the solution’s return on investment;

● Our competitors often utilize cumbersome form factors and alternative connected devices, which

are not easily portable or that otherwise require significant user effort for connectivity.

By contrast, our diabetes solution,

for example, utilizes lancets, strips and a dongle held in a lipstick-sized device that physically connects to a user’s phone

and doesn’t require independent charging.

As another example, our MSK device is small and easily attaches to body parts for

convenient and easy use;

● Our competitors’

applications experience limited interoperability and connectivity, such

that they are unable to integrate with third party devices, electronic health records or partnered solutions;

We have been granted Utility Models for our core invention in Japan and Germany.

Other intangible assets

As the number of Dario users grows, an ever-growing amount of data is being collected from diabetic patients, including their blood sugar levels, meal compositions, routines, physical exercise (intensity and duration) as well as many other factors, and lately also blood pressure data, which are all useful for creating meaningful correlations between these factors and insulin use.

We expect that this database will be highly valuable and may be capitalized in many ways.

The accumulation of this type of know-how and related algorithms are protected as trade secrets using specialized confidentiality protocols.

In recent years, a number of digitally supported solutions have emerged to manage diabetes and other chronic conditions.

Competitors are developing new technologies rapidly and, in some cases, are also expanding to manage other chronic conditions.

In this crowded field, our success is predicated on our flexibility to adapt to evolving customer requirements in digital health and superior execution in engagement, retention and clinical outcomes in a manner that delivers clear return on investment in required time-horizons and in complex, highly regulated business environments.

We expect new entrants in the field and the emergence of novel technologies, as well as competition from larger technology platform players such as Amazon, Apple and Google.

Dario’s competitors vary by intervention (devices, applications, coaching and analytics), by channel (health plan, pharma, provider, employer) and by condition (including, for example, diabetes, MSK, HTN, behavioral health and others).

Certain of our competitors offer this integrated approach in varying degrees, including, among others, Hinge Health, Inc., Livongo Health Inc.

(acquired by Teladoc Health Inc.), Omada Health, Inc., Vida Health, Inc.and.

Virta Health Corp.

We believe that our competitors are comparatively disadvantaged along several axes:

● Our competitors offer point solutions for a single condition (which model is unattractive to enterprise customers needing to manage multiple vendor relationships and who recognize that conditions frequently overlap in the same individual);

● Our competitors fail to share member-level data or granular reporting with partners, which prevents these partners from leveraging their own assets to support care;

● Competitor applications have limited or minimal levels of personalization, where communications (or “nudge”) from the application may be somewhat personalized, but actual user experiences are heavily templated, and not personalized or dynamic;

● Competitor applications are supported only by short term outcome data, as compared to our studies which cover a 2-year period and offer 7 years of direct-to-consumer data;

● Failure of any one of our competitors to successfully engage and retain a substantial portion of the base population, as few have the direct-to-consumer experience or data required, resulting in frustrated customers who cannot realize promised cost savings;

● Customers of our competitors suffer an inadequate user experience, as evidenced by few app store reviews and low scores in Apple, Google and Amazon stores;

● Our competitors offer medical device-oriented approaches with delayed product update cadences, rather than our more agile, software-driven approaches that push out new products every few weeks;

● Our competitors have slowed their improvements in the area of clinical metrics (including, for example, blood pressure, HbA1c, and pain), which decreases the solution’s return on investment;

● Our competitors often utilize cumbersome form factors and alternative connected devices, which are not easily portable or that otherwise require significant user effort for connectivity.

By contrast, our diabetes solution, for example, utilizes lancets, strips and a dongle held in a lipstick-sized device that physically connects to a user’s phone and doesn’t require independent charging.

As another example, our MSK device is small and easily attaches to body parts for convenient and easy use;

● Our competitors’ applications experience limited interoperability and connectivity, such that they are unable to integrate with third party devices, electronic health records or partnered solutions;

● Our competitors have higher costs;

our solutions are priced 30-50% lower than current comparable

in-market solutions.

As of March 1, 2021,

we had 127 full-time employees and 12 part-time employees.

our solutions are priced 30-50% lower than current comparable in-market solutions.

As of March 10, 2022, we had 200 full-time employees and 14 part-time employees.

We have employment agreements with our five executive officers.

“Management –

Employment Agreements.”

See “Management – Employment Agreements.”

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What changed 10-K

Item 1. Business