Greetings, and welcome to the DarioHealth First Quarter 2018 Earnings Conference Call. Hosting the call today are Erez Raphael, Chief Executive Officer and Zvi Ben-David, Chief Financial Officer. Before I turn the call over to management, I’d like to remind everyone that this conference call may contain projections or other forward-looking statements regarding future events or the future performance of the Company. DarioHealth does not assume any obligation to update that information. Actual events or results may differ materially from those projected as a result of changing market trends, reduced demand, and the competitive nature of DarioHealth's industry, as well as other risks identified in the documents filed by the Company with the Securities and Exchange Commission. In addition, certain non-GAAP financial measures will be discussed during this call. These non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the Company's current performance. Management believes the presentation of these non-GAAP financial measures is useful to investors understanding and assessment of the Company's ongoing core operations and prospects for the future. And with that, I'd now like to introduce Erez Raphael, Chief Executive Officer of DarioHealth. Mr. Raphael?

Hi, thank you. Good morning everyone, and thanks for joining us and for the interest at DarioHealth. I am going to review shortly the results of Q1 and then give more strategic overview on how we’re moving forward. First of all, I am very happy for the 13th time in a row we are presenting a growth in our quarterly sales. This quarter ended up with the sales that was 74% higher year-over-year comparing to Q1 2017. There is sequential growth is 11.3%, overall we feel that we are moving forward with our strategy and therefore the forecast that we gave the market to grow in 2018 in between 60% to 80% is something that we feel that we are on track and this is something that we expect to achieve as we see our business evolving at the moment. From a financial standpoint, we also improved our overall gross profit year-over-year and represented 31.4 versus 10.5 a year ago and the gross profit we achieved $552,000 which is an improvement of 420% over Q1 2017. So, all-in-all this quarter continued to improvement and clearly what we feel is a true player in the digital health space. For more strategic and growth strategy standpoint, I feel that in this quarter we also managed to keep building the various building blocks that helps us meet the 2018 target and to build also strong foundation into 2019 and I am going to talk about three main areas, our ability to build the global digital health platform, the market access that we keep achieving, and also the multiple growth strategy that we have. So, from a global digital health platform we added few more building blocks throughout cloud platform, the Dario Engage. As we collect more users and as we have more capabilities…

Thank you, Erez. On the call this morning, I will review DarioHealth’s first quarter of 2018 financial results. Revenue for the first quarter was $1.76 million, an increase of 74% compared to the first quarter of 2017, and then an 11% sequential increase over the first quarter of 2017. This increase was primarily a result of continued growth in the United States as well as initial sales in Germany and product sales to distributors in the UK. Gross profit reached $552,000 in the first quarter of 2018, an increase of $446,000 compared to the first quarter of 2017. This represents a gross profit of 31.4% in the quarter. This improvement is a result of increasing quantities sold and higher average selling prices. Operating loss in the quarter decreased by $1.3 million to $2.9 million compared to a loss of $4.2 million in the first quarter of 2017. This decrease in operating loss was mainly due to the improvement in the gross profit and a decrease in operating expenses due to a reduction in share based compensation. Net loss attributable to holders of common stock decreased by $2.5 million to $2.9 million in the first quarter of 2018, as compared to $4.5 million in the first quarter of 2017. Before we open the call to questions I would like to reiterate our initial outlook for 2018. For the full year we anticipate revenues to be between $8.3 million to $9.3 million, a 17% year-over-year increase at the midpoint of our outlook range. I will turn the call back over to Erez for some concluding remarks. Erez?

Thank you, Zvi. So as you can see, we continue to build positive momentum. We are creating a culture of growth and I am very happy that the team here at Dario in both Israel and the United States are working extremely hard in order to take the company forward and to continue the growth. Actually I think that the fact that we are keeping moving towards the goal 60% to 80% year-over-year is exciting and hopefully with the expansion of the B2B, we’ll be able to look into 2019/2020 and see the number goes higher. I feel that at the point when we will reach to $10 million run rate itself this is something that we’ll be another significant milestone for the company. And with that regards we also expanded our office in the United States and we continue to expand it actually the last fundraise that we did help us invest into the B2B market in a much bigger way. So we’re going to hire more people into United States and this is something that is published on our website and all over we are focusing mainly on stakeholders that will help us accelerate the sales and the account management in the United States. So this is something that we are working intensively now in order to leverage on the opportunity. Usually when talking about health companies and medical devices, we see a lot of barriers that related to regulation and so on and after this quarter by getting another clearance from the FDA, I feel that we don't have this barrier, so I am very positive that we can push everything forward in a very intensive way. There were recently some discussions about the fact that the company is American. DarioHealth population is corporate in Delaware, and we also have a team here in Israel. So we have a lot of exposure into the Israeli market. So the company is considering being listed also in Tel Aviv Stock Exchange. We don’t have a decision to do that and this is something that we are checking. We feel that there a lot of investors in Israel that want to be the part of the story and sometimes it's easier for them to buy in a local stock exchange. So we don't have a complete decision yet, but this is something that we are looking into. Other than that, the overall improvement of the customer value and the number of users is something that helps us see beyond. I believe that when this company will get to somewhere around 200,000 to 250,000 users that we are paying it will generate revenue of around $100 million for this company. So, a year we couldn’t look that far. Today as we see tens of thousands of users on the platform, we see this milestone still far but something this is very doable. With that, I would like to open the call for questions. Operator?

[Operator Instructions] Our first question comes from Steve Wardell with Chardan Capital Markets. Please state your question.

So can you give us a little more summary and color about your go-to market strategy in the U.S. and Europe? So, just a little more overview of direct to consumer and also the status of going through partners? What's the current status and color and also the direction you're moving in for go-to-market in the U.S. and Europe.

Yes, absolutely. So at the moment just to remind the investors we are selling in few major countries. The biggest one is the United States, then we have Australia, Canada, U.K., Germany, and Italy. These are the market that we are selling at the moment and we have to major coaches. One of them we are calling it B2C or direct to consumer. It might be in a digital way and it might be also in a more and less digital way what we are coaching consumers, they are creating the demand and then we are shipping them product and it might be that we are charging for the disposables when it comes to the rest of the world or it might be that we are charging for what we are call subscription or membership, which is something that include also a digital product and or coaching. The majority of the service so for around 85% was done in a direct-to-consumer and when we are looking on the overall service that we are generating it's more like 75% comes from the U.S. and 25% more or less comes from the rest of the world. After we did the last deal and after we started a more intensive investment into our U.S. Office, we started to do more B2B a business to business and here we have a few coaches, a few potential clients number one is the self insured employers market, and number two is the providers market. In both of them we are either working directly or in indirect way. So the moment we are working with few distributors so those that already have an open channel with employers in the United States later on this quarter will probably disclose the specific deals but we have a very big…

And so it looks like you came in for the first quarter a little higher up on the topline than expected. Where do you think this came from primarily, did this come from U.S. direct-to-consumer sales or from some other place?

Yes, it's mainly the U.S. and it's also the evolvement of the business to be more membership oriented. As we move forward we are figuring out and when we are doing direct-to-consumer, how we can do it in the most effective way. Obviously a user that is buying a subscription versus a user that is buying the device for one time, it's a different output, it’s a different revenue per user. And long the time we are learning better and better how to sell to users that are on subscription, users that are more committed and so on. So we managed to connect our digital platform with the campaigns and the traffic that we are buying to be more and more effective. So, as we move forward the percentage of the user acquisition that they are buying the membership and the subscription becomes higher and higher. And this is what guarantee the better engagement and also better lifetime value. So, all these numbers are improving quarter-by-quarter and this is one of the good surprises that we have.

[Operator Instructions] Our next question comes from Mark Lanier with Pegasus Capital. Please state your question.

Congratulate you and the team on the first quarter, those are impressive numbers. My question has to do with the fact that you've made clear that the United States has a number of priorities. I'm curious over the next 12 to 18 months which is the country that offers the most accessible opportunities after the United States?

Yes, so number one is the state as we said and you said the next three markets that we see as a very good - the next priority is Canada. And just to remind you we have a potential very big deal with healthcare providers in Canada. So this is something that makes this market very attractive for us. It's also easier to manage it by the team that is managing North America. So this is something that is under the control of the head of commercialization that we hired in North America. So he's focusing on these two markets. So Canada goes right, very, very close to the states. It's also relatively a very profitable market. So we feel very comfortable operating there. The next three markets are the U.K., Australia and also Germany. So in the U.K. recently the NHS made it very clear that it's going to be one of the top priorities the diabetes management. They do want to invest into more digital capabilities. We don't really have a huge interest to get into markets that are mainly into the test strip market. We want to get into those that know to appreciate and also to pay for full solution that including membership, digitalization and coaching and so on. We feel that the next market after Canada is going to be U.K., then Australia and then Germany. So this is the priority that we have at the moment. From a general standpoint, we have to choose you know the exact number, I think that it's like 75% U.S. and North America versus 25% the rest of the world in terms of investment that we are doing. We are getting a lot of partners that want to launch the product you know you can name it from Pakistan to India to Iran to wherever that we decided to be very, very, very focused on these numbers. So I don't think that we're going to get into additional market this year. Brazil and China is also two big markets that can both add solution. But again given the amount of money that we have in our bank account and given the fact that we want to focus and be successful, we are not going to launch into other markets this year. We're going to get the numbers from this market and we're going to build the foundation in a way that we can continue and in terms of goals also in 2019 in these markets. So that's the current strategy.

Could you also just talk generically about some of your new hires in the United States, where are they coming from? Where is the focus? That would be helpful. Thank you.

So this is one of the press releases that we put like recently then we had hires not just in the United States but also in Israel was a very strong VP of Marketing that understand very well user engagement. We feel that one of the things that we bring to the market and to the healthcare market is about direct communication with users in a digital way. And I'm not sure how many products are out there that users are saying we love it, okay, medical device phase, no one loves medical device. But in our case they love the product. So after we have learned this market for a while, we understood and we know that there is a big, big, big difference between medical devices to digital health. It's a different concept and it's a different mentality and it's a different way of thinking. It's much more user centric, it's much more data oriented. And this is why when we were thinking about hiring in the United States, we wanted people that are coming from improved experience into the digital health. This is why we hired JC Muyl. I think that we have a press release form like two or three weeks ago. So JC is coming with a complete experience from the digital health ward. He speaks our language and after post this a few months where we will checking whether it's the right match between the organization to JC, we figured out that he is in line with the D&A in the culture of our company and also with the other whole objective. He also have his own relationship with the potential partners in the United States and he is also worked already with few of the people that are a part of the company.…

[Operator Instructions] Our next question comes from Jeff Silver with BCIA. Please state your question.

So Erez and Zvi congratulations on the really great progress that you're making. I have a question which maybe you can answer maybe not it's sort of a qualitative question and that is that, if I look at Dario versus Livongo there are many, many distinct differences in the product that really speak to the areas advantage I think over the longer and certain other companies in the market. One and perhaps the most significant is that you know with Dario you can extend every smartphone to be a mobile device, whereas with Livongo you need to dedicate a cellular device to basically the user has to carry two devices. And the fact that you can do this with a smartphone that obviously puts you directly in the space of the smartphone manufacturers. Let's just take Apple for instance. And again I don’t know if you can answer this but it would seem to me that you must be getting to the point now where you are appearing on the radar screen of companies like Apple, especially given the technology which basically allows - it allows the user to use their smartphones. Can you talk a little bit is there anything that you can say about your profile in the cellular mobile device world and whether or not you are seeing more interest or more receptivity from these manufacturers to your device technology service and really ecosystem?

So I want to talk about two general things okay that relate to your question. Number one you mentioned one of the competitors and I just want to make sure that investors do understand the difference from a product standpoint between us to some of our competitors who mentioned one of them now but I think that it also a client to other competitors. At the end of the day Dario is having great hardware product but this is just part of the product. We also have a great application but we have another very big asset that we are developing on our cloud which is AI supported and I am talking about the overall automation. We are calling it marketing automation and clinical automation. At the end of the day we believe that if we want to get to a tooling an engaging product, we need to be - to have the best user experience and I think that when it comes to chronic condition and specifically diabetes, engagement is a buzzword that is being used in the digital help and this is the tool - the tool in the holy grail in the diabetes market. And I think that given the numbers that we have in terms of number of users and in terms of the activeness of the users and the overall retention of the users, we are today in a situation that Dario user is looking into an application, into our application somewhere between 60 to 90 days every quarter okay, sorry minutes every quarter 60 to 90 minutes every quarter. And if you are taking into account the average time that the patient will see a doctor is going to be somewhere between 10 to 15 minutes a quarter. So I think that we created…

Ladies and gentleman, there appears to be no additional request for questions at this time. I will turn it back to management for closing remarks. Thank you.

Okay. So thanks everyone for joining us today. Have a good rest of the day. Thanks.