Business Context and Reporting Period
DarioHealth Corp., an emerging growth company incorporated in Delaware, filed this Form 8-K on March 19, 2018, reporting an event that occurred on March 15, 2018. The filing addresses a material error in previously issued financial statements.
Key Financial Metrics
This filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures. The document focuses exclusively on the identification of an accounting error and the subsequent decision to restate prior financial reports.
Material Changes and Restatements
The Audit Committee determined that the Quarterly Reports on Form 10-Q for the quarters ended March 30, 2017, June 30, 2017, and September 30, 2017, should no longer be relied upon. The error involved the re-measurement of certain liability warrants prior to their reclassification from liability to equity in the period ended March 31, 2017. Consequently, the Company will reflect an increased net loss for these prior periods. However, the restatements will not impact the Company's stockholder's equity for the affected periods.
Management Commentary and Outlook
Management and the Audit Committee have discussed the matter with the independent registered public accounting firm, Kost Forer Gabbay & Kasierer (KFGK). The Company intends to file amendments to the relevant Form 10-Q reports as soon as possible to correct the errors and make necessary conforming changes to the Management's Discussion and Analysis sections.
Investor Verification Checklist
- Verify the upcoming amended Form 10-Q filings for the quarters ended March 30, June 30, and September 30, 2017.
- Confirm the specific magnitude of the increased net loss resulting from the warrant re-measurement error.
- Review the revised Management's Discussion and Analysis for the affected periods once filed.
- Monitor for any further disclosures regarding the impact on current period financials or internal controls.