Dario

Kurta Law is investigating broker recommendations of Dario stock (NASDAQ: DRIO). Investors should know that these investments came with a high degree of risk and were not suitable for investors who specified a moderate to conservative risk tolerance. Brokers who recommended unsuitable investments may have violated securities rules and regulations, including Regulation Best Interest. The risks associated with this investment are clearly stated in the prospectus, and brokers either knew or should have known that there was a high likelihood of significant investor losses.  

If you believe you have suffered investment losses as a result of broker fraud or misconduct, get in touch with our securities attorneys: (877) 600-0098 or info@kurtalawfirm.com.  

The Dario Stock Offering  

Dario conducted an offering of 1,450,000 shares of common stock on March 31, 2017. According to the prospectus, the price per share was $3.99 per share. As of April 19, 2024, DRIO stock prices had fallen to $1.16.  

Information about the offering appears in the prospectus. The prospectus is the document that offerors use to register their stock offering with the SEC. It also describes the risks, described in greater detail below.  

Risks Associated with Dario Stock  

Brokers either knew or should have known about the following risks associated with stocks of Dario. These risks all made the investment unsuitable for many investors.  

Immediate Dilution  

Dario’s per-share prices were higher than the net tangible book value per share, which meant that at the time of purchase, investors would experience a significant dilution in the value of their shares.  

Use of Net Proceeds  

Dario’s management had flexibility in deciding how to use the net proceeds from this stock offering. Management’s failure to use the funds effectively could have adversely affected the value of the common stock.  

Additional Financing  

At the time of the offering, Dario stated in the prospectus that the company may need to obtain additional financing, and only had enough funds to sustain nine months of operations. Without additional funding, Dario may be forced to cease operations and investors would lose their entire investment.  

Volatile Share Prices  

According to the prospectus, share prices may be volatile, and the market price of Dario’s common stock has fluctuated in the past.  

Aegis Capital Corp. Underwriting   

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm. 

Kurta Law Can Help  

Contact the investment fraud attorneys at Kurta Law for a free case evaluation. Our attorneys have experience winning settlements for investors who lost money as a result of unsuitable investment recommendations. Call (877) 600-0098 or email info@kurtalawfirm.com.