DarioHealth Corp (DRIO)

[Kev_Sh]

1) From 8/22 8K form, the toxic dilution, the company preserved 4.37M shares for potential issuance. This is pre reverse split shares. Following the exchange, the company has 75.16M common outstanding shares. Here is the actual verbiage: "The number of Exchange Shares issued to each Buyer was determined pursuant to a formula set forth in the Amendment and Exchange Agreements. Of the aggregate Exchange Shares, 49,660,465 were issued as of August 22, 2014 and the Company has reserved an additional 4,370,485 Exchange Shares for potential future issuance due to contractual limitations on ownership as agreed to with a Buyer. Following the Exchange, the Company has 75.2M shares of Common Stock outstanding."
Now post reverse splits, the numbers come out to be: 0.87M shares for potential issuance and outstanding shares of 15.04M common outstanding shares. Below is the link to the 8/22 form:

http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001144204%2D14%2D052117%2Etxt&FilePath=%5C2014%5C08%5C22%5C&CoName=LABSTYLE+INNOVATIONS+CORP%2E&FormType=8%2DK&RcvdDate=8%2F22%2F2014&pdf=

2) The 60 days obligation not to sell comes from Edery's investment as stated in 9/24 8K form. Here is the link:

http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001144204%2D14%2D057598%2Etxt&FilePath=%5C2014%5C09%5C24%5C&CoName=LABSTYLE+INNOVATIONS+CORP%2E&FormType=8%2DK&RcvdDate=9%2F24%2F2014&pdf=

3) Now, the dilution per 1) has no obligations. This is the dilution that I think we are witnessing during the DRIOD post reverse split days... Per 10/31 424B3 Form, the total outstanding shares post reverse split is 16.02M shares.

If you go back to 1) the outstanding shares were 15.04 and the issuance shares were 0.87M, therefore the total number of shares = 15.04M + 0.87M ~ 16M shares.