Georgi Kamburov

LabStyle Innovations Corp (OTCMKTS:DRIO) Continues Its Impressive Performance

by Georgi Kamburov April 9, 2015

Yesterday the stock of LabStyle Innovations Corp (OTCMKTS:DRIO, DRIO message board) made another jump up the chart adding 14.6% to its price and closing at $0.43. So far the ticker has registered eight consecutive sessions ending in the green. The market also showed increased interest in the company and yesterday’s traded volume of 811 thousand shares surpassed the 30-day average of 69 thousand shares by nearly twelve times. Currently sitting at its highest point for the past several months the stock may be reaching some unstable price ranges and it did show some signs of hesitation dropping down from a high of day of $0.53.

DRIO are the developer of the Dario Diabetes Management Solution, a cloud-based diabetes management solution that includes a blood glucose monitoring device. The Dario product has received marketing clearance in Europe and has been launched in several countries – the UK, Italy, Australia and the Netherlands. It has also been approved for sale in Israel. Investors however are getting excited in anticipation of an U.S. FDA clearance that is expected to happen before the end of the year. Last month the company submitted new positive data to the FDA after successfully completing a 368 User Performance Study.

Things are definitely moving in an encouraging direction but investors shouldn’t forget that they are still dealing with a pennystocks. Let’s start with the last financial report submitted by the company – the annual report for 2014. It was filed on March 24 and revealed that at the end of last year DRIO had:

• $1.45 million cash
• $2 million total current assets
• $1.6 million total current liabilities
• $51 thousand revenues
• $12.8 million net loss

Although the company was able to register its first revenues from the sale of Dario in the fourth quarter of the year the actual amount is quite underwhelming when compared to the massive losses.

During February and March of 2015 the company completed two closings as part of a private placement of shares and as a result boosted their cash position by approximately $2 million. The resulting dilution of the commons stock was significant however and the outstanding shares of the company grew from 16.2 million at the end of December 2014 to nearly 28 million as of March 27.

Even with the newly raised capital the financial state of the company remains shaky. According to DRIO their resources will be enough to keep them going until July 2015 at which point the company might be forced to look for more external sources of funds.

Even if you believe in the potential of DRIO’s products the risks around the stock shouldn’t be underestimated. Take into account the various red flags before putting your hard-earned money on the line. 

Comments 1

1. Guest
April 09, 2015, 07:46AM

Quotes This could get to 0.60PPS till Fri. 10/04 IMO

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