Exhibit 99.1 SENSEONICS HOLDINGS, INC. REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS GERMANTOWN, MD, May 13, 2024 —Senseonics Holdings, Inc. (NYSE American: SENS), a medical technology company focused on the development and manufacturing of long-term, implantable continuous glucose monitoring (CGM) systems for people with diabetes, today reported financial results for the quarter ended March 31, 2024. Recent Highlights & Accomplishments: "It has been a very productive start to the year for Senseonics as we c ...

Senseonics Holdings, Inc. (NYSE:SENS) Q4 2023 Earnings Conference Call February 29, 2024 4:30 PM ET Company Participants Trip Taylor - IR Tim Goodnow - President and CEO Rick Sullivan - CFO Mukul Jain - COO Conference Call Participants Marie Thibault - BTIG Vernon Bernardino - H.C. Wainwright Operator Good evening and welcome to the Senseonics Fourth Quarter and Full Year 2023 Earnings Release and Conference Call. All participants will be in listen-only mode. After today's presentation there will be an oppo ...

PART I This part details the company's business operations, significant risks, regulatory compliance, and corporate information [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Senseonics Holdings, Inc. is a medical technology company specializing in long-term implantable continuous glucose monitoring (CGM) systems, primarily Eversense. The company focuses on product development and manufacturing, while its partner, Ascensia Diabetes Care Holdings AG, handles global commercialization, sales, marketing, and customer support. Recent developments include FDA approval and CE mark for the 180-day Eversense E3 system, expanded Medicare coverage, and ongoing pivotal studies for a 365-day sensor. The company's strategy emphasizes increasing market awareness, expanding the inserter network, and securing favorable reimbursement - Senseonics is a medical technology company focused on developing and manufacturing long-term implantable glucose monitoring products, with Eversense E3 CGM system designed for up to six months of continuous glucose measurement[19](index=19&type=chunk) - The company's commercialization strategy relies on an exclusive agreement with Ascensia Diabetes Care Holdings AG for worldwide distribution, with Senseonics responsible for product development and manufacturing, and Ascensia for sales, marketing, and customer support[22](index=22&type=chunk)[41](index=41&type=chunk) - Key recent developments include FDA approval of the 180-day Eversense E3 CGM system in February 2022 and its subsequent commercialization in the U.S. and EEA, as well as expanded Medicare coverage for Eversense E3 to include all insulin users and non-insulin users with problematic hypoglycemia, effective February 25, 2024[23](index=23&type=chunk)[26](index=26&type=chunk) - The ENHANCE pivotal study for a 365-day Eversense system has completed adult enrollment and data analysis, with an FDA submission expected soon for a new product targeting 365-day duration and once-per-week calibration[20](index=20&type=chunk)[54](index=54&type=chunk) [Overview](index=4&type=section&id=Overview) This section provides a general introduction to the company's business and products [Significant Recent Developments](index=5&type=section&id=Significant%20Recent%20Developments) This section highlights key recent achievements and milestones for the company [Background](index=5&type=section&id=Background) This section provides historical context and foundational information about the company [Commercial Strategy](index=6&type=section&id=Commercial%20Strategy) This section outlines the company's approach to market its products and achieve sales growth [Collaboration and Commercialization Agreement with Ascensia Diabetes Care Holdings AG](index=7&type=section&id=Collaboration%20and%20Commercialization%20Agreement%20with%20Ascensia%20Diabetes%20Care%20Holdings%20AG) This section details the strategic partnership for global product commercialization [Clinical Development and Regulatory Pathway](index=7&type=section&id=Clinical%20Development%20and%20Regulatory%20Pathway) This section describes the clinical trials and regulatory processes for product approvals [Overview](index=7&type=section&id=Overview) This section provides a general summary of the clinical development and regulatory process [United States Pivotal Trials](index=8&type=section&id=United%20States%20Pivotal%20Trials) This section details the key clinical trials conducted in the United States for product approval [PRECISE II Trial](index=8&type=section&id=PRECISE%20II%20Trial) This section describes the PRECISE II clinical trial [PROMISE Trial](index=8&type=section&id=PROMISE%20Trial) This section describes the PROMISE clinical trial [ENHANCE Trial](index=9&type=section&id=ENHANCE%20Trial) This section describes the ENHANCE clinical trial [Our Technology](index=9&type=section&id=Our%20Technology) This section describes the core technological components of the company's products [Sensor](index=10&type=section&id=Sensor) This section details the design and function of the glucose sensor [Smart Transmitter](index=10&type=section&id=Smart%20Transmitter) This section describes the features and capabilities of the smart transmitter [Mobile App](index=10&type=section&id=Mobile%20App) This section outlines the functionality of the accompanying mobile application [Future Product Development](index=11&type=section&id=Future%20Product%20Development) This section discusses ongoing and planned initiatives for new product innovation and enhancements [Sales and Marketing](index=11&type=section&id=Sales%20and%20Marketing) This section describes the strategies and activities for promoting and selling products [Reimbursement](index=12&type=section&id=Reimbursement) This section addresses the coverage and payment policies for the company's products [Coverage in the United States](index=12&type=section&id=Coverage%20in%20the%20United%20States) This section details product reimbursement policies within the United States [Coverage Outside the United States](index=12&type=section&id=Coverage%20Outside%20the%20United%20States) This section details product reimbursement policies in international markets [Manufacturing and Quality Assurance](index=13&type=section&id=Manufacturing%20and%20Quality%20Assurance) This section describes the production processes and quality control measures for products [Competition](index=13&type=section&id=Competition) This section analyzes the competitive landscape and key rivals in the market [Intellectual Property](index=14&type=section&id=Intellectual%20Property) This section outlines the company's strategies for protecting its proprietary technologies and innovations [Patents](index=14&type=section&id=Patents) This section details the company's patent portfolio [Trademarks](index=15&type=section&id=Trademarks) This section details the company's registered trademarks [Trade Secrets](index=15&type=section&id=Trade%20Secrets) This section describes the company's protection of confidential business information [Government Regulation](index=15&type=section&id=Government%20Regulation) This section describes the extensive regulatory framework governing the company's operations and products [Regulation by the FDA](index=15&type=section&id=Regulation%20by%20the%20FDA) This section details the regulatory oversight by the U.S. Food and Drug Administration [International Regulation](index=16&type=section&id=International%20Regulation) This section describes regulatory requirements in markets outside the United States [Other Regulatory Requirements](index=19&type=section&id=Other%20Regulatory%20Requirements) This section covers additional regulatory obligations beyond core product approvals [Health Insurance Portability and Accountability Act of 1996 and Other Foreign and State Laws and Regulations Affecting the Transmission, Security and Privacy of Personal Information](index=20&type=section&id=Health%20Insurance%20Portability%20and%20Accountability%20Act%20of%201996%20and%20Other%20Foreign%20and%20State%20Laws%20and%20Regulations%20Affecting%20the%20Transmission%2C%20Security%20and%20Privacy%20of%20Personal%20Information) This section addresses laws governing the privacy and security of health and personal information [Fraud and Abuse Laws](index=20&type=section&id=Fraud%20and%20Abuse%20Laws) This section discusses regulations designed to prevent healthcare fraud and abuse [Federal Anti-Kickback and Self-Referral Laws](index=21&type=section&id=Federal%20Anti-Kickback%20and%20Self-Referral%20Laws) This section details federal laws prohibiting kickbacks and self-referrals in healthcare [Federal False Claims Act & HIPAA](index=22&type=section&id=Federal%20False%20Claims%20Act%20%26%20HIPAA) This section covers federal laws related to false claims and health information privacy [Civil Monetary Penalties Law](index=22&type=section&id=Civil%20Monetary%20Penalties%20Law) This section describes laws imposing civil monetary penalties for certain healthcare offenses [State Fraud and Abuse Provisions](index=22&type=section&id=State%20Fraud%20and%20Abuse%20Provisions) This section outlines state-level regulations addressing fraud and abuse [Physician Payments Sunshine Act](index=23&type=section&id=Physician%20Payments%20Sunshine%20Act) This section details the law requiring disclosure of payments to physicians and teaching hospitals [Healthcare and Regulatory Reform](index=23&type=section&id=Healthcare%20and%20Regulatory%20Reform) This section discusses the impact of broader healthcare and regulatory changes [Brexit and the Regulatory Framework in the United Kingdom](index=24&type=section&id=Brexit%20and%20the%20Regulatory%20Framework%20in%20the%20United%20Kingdom) This section addresses the implications of Brexit on the UK regulatory environment [U.S. Foreign Corrupt Practices Act](index=24&type=section&id=U.S.%20Foreign%20Corrupt%20Practices%20Act) This section covers the U.S. law prohibiting bribery of foreign officials [UK Bribery Act and other anti-corruption laws](index=25&type=section&id=UK%20Bribery%20Act%20and%20other%20anti-corruption%20laws) This section discusses anti-corruption legislation, including the UK Bribery Act [Environmental Health and Safety Regulations](index=25&type=section&id=Environmental%20Health%20and%20Safety%20Regulations) This section outlines compliance with environmental, health, and safety standards [Employees and Human Capital Resources](index=25&type=section&id=Employees%20and%20Human%20Capital%20Resources) This section describes the company's workforce, culture, and human resource management [Culture](index=25&type=section&id=Culture) This section describes the company's organizational culture and values [Employee Health & Wellbeing](index=26&type=section&id=Employee%20Health%20%26%20Wellbeing) This section details initiatives supporting employee health and wellness [Organizational Development](index=26&type=section&id=Organizational%20Development) This section discusses strategies for enhancing organizational effectiveness and growth [Diversity, Equity, and Inclusion](index=26&type=section&id=Diversity%2C%20Equity%2C%20and%20Inclusion) This section outlines the company's commitment to diversity, equity, and inclusion initiatives [Total Rewards](index=26&type=section&id=Total%20Rewards) This section describes the comprehensive compensation and benefits programs for employees [Corporate Information](index=27&type=section&id=Corporate%20Information) This section provides general information about the company's corporate structure and details [Available Information](index=27&type=section&id=Available%20Information) This section specifies where public information about the company can be accessed [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous risks, including significant operating losses since inception and uncertainty about future profitability. Its success heavily relies on the commercialization agreement with Ascensia, which carries risks if performance is unsatisfactory. The highly competitive CGM market, lengthy and expensive product development, and extensive governmental regulations (FDA, international) pose substantial challenges. Financial risks include the need for significant sales to achieve profitability, potential fluctuations in operating results, and substantial debt obligations. Operational risks encompass reliance on third-party manufacturers and suppliers, potential product defects, and the need to continuously innovate. Data privacy and security, including the use of AI, are also growing concerns, alongside the volatility of the company's common stock and potential dilution from convertible securities - The company has incurred significant net losses since inception, with a net loss of **$60.4 million in 2023** and an accumulated deficit of **$869.3 million** as of December 31, 2023, and does not expect to be profitable for at least the next several years[167](index=167&type=chunk)[168](index=168&type=chunk) - Future revenue is substantially dependent on the success of the Commercialization Agreement with Ascensia; unsatisfactory performance by Ascensia could adversely affect commercialization efforts and financial results[169](index=169&type=chunk)[171](index=171&type=chunk) - The CGM market is highly competitive, with major players like Dexcom, Medtronic, and Abbott, who possess greater financial resources, established market presence, and advanced technologies (e.g., factory calibration, iCGM indications)[179](index=179&type=chunk)[213](index=213&type=chunk)[216](index=216&type=chunk) - The company faces risks related to its reliance on third-party manufacturers and suppliers, including potential quality defects, inability to secure components, production capacity issues, and disruptions to facilities[191](index=191&type=chunk)[196](index=196&type=chunk)[198](index=198&type=chunk) - Extensive governmental regulations (FDA, international) govern product development, manufacturing, marketing, and sales, with non-compliance potentially leading to fines, recalls, and suspension of marketing authorizations[19](index=19&type=chunk)[92](index=92&type=chunk)[97](index=97&type=chunk)[101](index=101&type=chunk)[115](index=115&type=chunk) - The company's stock price has been highly volatile, influenced by factors such as analyst coverage, clinical trial results, financing activities, regulatory approvals, and broader market conditions[170](index=170&type=chunk)[354](index=354&type=chunk)[356](index=356&type=chunk) [Summary of Risks Affecting Our Business](index=28&type=section&id=Summary%20of%20Risks%20Affecting%20Our%20Business) This section provides a high-level overview of the principal risks impacting the company's operations [Risks Relating to our Business and our Industry](index=29&type=section&id=Risks%20Relating%20to%20our%20Business%20and%20our%20Industry) This section details specific risks inherent to the company's business model and the broader industry [Risks Related to our Financial Results and Need for Financing](index=43&type=section&id=Risks%20Related%20to%20our%20Financial%20Results%20and%20Need%20for%20Financing) This section outlines financial risks, including profitability, liquidity, and capital requirements [Risks Related to Development of our Products](index=45&type=section&id=Risks%20Related%20to%20Development%20of%20our%20Products) This section addresses challenges and uncertainties associated with product research and development [Risks Related to Employee Matters and Managing our Growth](index=46&type=section&id=Risks%20Related%20to%20Employee%20Matters%20and%20Managing%20our%20Growth) This section covers risks associated with human capital, organizational growth, and management [Risks Related to our Intellectual Property](index=48&type=section&id=Risks%20Related%20to%20our%20Intellectual%20Property) This section discusses potential threats to the company's patents, trademarks, and trade secrets [Risks Related to our Legal and Regulatory Environment](index=52&type=section&id=Risks%20Related%20to%20our%20Legal%20and%20Regulatory%20Environment) This section addresses compliance risks, potential litigation, and the impact of evolving regulations [Risks Related to our Common Stock](index=63&type=section&id=Risks%20Related%20to%20our%20Common%20Stock) This section outlines factors that could affect the trading price and liquidity of the company's stock [Item 1B. Unresolved Staff Comments](index=68&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - No unresolved staff comments were reported[386](index=386&type=chunk) [Item 1C. Cybersecurity](index=68&type=section&id=Item%201C.%20Cybersecurity) The company has implemented various information security processes to identify, assess, and manage cybersecurity risks to its critical systems and data. This includes monitoring threats, conducting vulnerability assessments, and maintaining technical, physical, and organizational security measures. Cybersecurity risk management is integrated into the company's overall risk management, with oversight from the board's audit committee and active involvement from the executive team and head of IT - The company maintains information security processes to identify, assess, and manage cybersecurity threats to its Information Systems and Data, utilizing methods like manual/automated tools, threat environment scans, external audits, and vulnerability assessments[387](index=387&type=chunk)[388](index=388&type=chunk) - Implemented security measures include incident detection and response, disaster recovery, data encryption, network security controls, access controls, vendor risk management, employee training, penetration testing, and cybersecurity insurance[389](index=389&type=chunk) - Cybersecurity risk management is integrated into the company's overall risk management, with the board of directors' audit committee overseeing the processes and the executive team, along with the head of IT, responsible for implementation and incident response[390](index=390&type=chunk)[394](index=394&type=chunk)[395](index=395&type=chunk)[396](index=396&type=chunk)[397](index=397&type=chunk)[398](index=398&type=chunk) [Risk management and strategy](index=68&type=section&id=Risk%20management%20and%20strategy) This section outlines the company's approach to identifying, assessing, and mitigating cybersecurity risks [Governance](index=69&type=section&id=Governance) This section describes the oversight structure for cybersecurity risk management within the company [Item 2. Properties](index=69&type=section&id=Item%202.%20Properties) The company's principal offices are located in Germantown, Maryland, occupying approximately 33,000 square feet under a lease expiring in 2033. An additional 30,500 square feet of office space, decommissioned in 2021, had its lease expire in 2023. The company believes its current facilities are adequate and plans to expand as needed - The company's principal offices are in Germantown, Maryland, with approximately **33,000 square feet** of research and office space under a lease expiring in **2033**[399](index=399&type=chunk) - An additional **30,500 square feet** of office space, decommissioned in 2021, had its non-cancellable operating sub-lease agreement expire in **2023**[399](index=399&type=chunk) [Item 3. Legal Proceedings](index=70&type=section&id=Item%203.%20Legal%20Proceedings) The company was subject to a civil complaint alleging False Claims Act violations related to marketing practices for its Eversense CGM system. The District Court dismissed the complaint, and this decision was affirmed by the Fifth Circuit on February 28, 2024. Currently, the company is not a party to any other material legal proceedings - A civil complaint alleging False Claims Act violations regarding Eversense CGM system marketing practices was dismissed by the District Court on March 30, 2023, and this dismissal was affirmed by the Fifth Circuit on February 28, 2024[401](index=401&type=chunk) - The company is not currently involved in any other material legal proceedings, nor is it aware of any pending or threatened legal actions that could significantly impact its business, operating results, or financial condition[402](index=402&type=chunk) [Item 4. Mine Safety Disclosures](index=70&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - The company is not subject to mine safety disclosures[403](index=403&type=chunk) PART II This part provides financial market information, management's discussion and analysis, audited financial statements, and disclosures on internal controls [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=70&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock is listed on the NYSE American under the symbol "SENS." As of February 23, 2024, there were 530,668,435 shares of common stock outstanding held by 168 record holders. The company has never declared or paid cash dividends and intends to retain future earnings for business operations and expansion, with current debt agreements further restricting dividend payments - The company's common stock is traded on the NYSE American under the symbol "**SENS**"[405](index=405&type=chunk) - As of February 23, 2024, there were **530,668,435 shares** of common stock outstanding, held by **168 record holders**[5](index=5&type=chunk)[406](index=406&type=chunk) - The company has never paid cash dividends and plans to retain all future earnings for business operations and expansion; current debt agreements also restrict dividend payments[367](index=367&type=chunk)[405](index=405&type=chunk) [Market Information for Common Stock](index=70&type=section&id=Market%20Information%20for%20Common%20Stock) This section provides details on the trading market for the company's common stock [Dividend Policy](index=70&type=section&id=Dividend%20Policy) This section outlines the company's approach to dividend payments to shareholders [Stockholders](index=70&type=section&id=Stockholders) This section provides information regarding the company's shareholders [Recent Sales of Unregistered Securities](index=70&type=section&id=Recent%20Sales%20of%20Unregistered%20Securities) This section details any recent issuances of securities not registered under the Securities Act [Item 6. [Reserved]](index=71&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=71&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of Senseonics' financial condition and operational results, highlighting its focus on implantable CGM systems like Eversense E3. The company reported a significant increase in total revenue for 2023, driven by commercial activities and a full year of E3 sales, despite a decrease in gross margin due to sales channel mix and increased manufacturing costs. Research and development expenses rose due to investments in next-generation technologies and clinical studies. The company undertook several financing transactions in 2023 to strengthen its balance sheet, including a new term loan facility and warrant issuances. Cash flow analysis shows increased cash used in operations but a net increase in cash and cash equivalents due to investing and financing activities Consolidated Statements of Operations and Comprehensive (Loss) Income (in thousands) | | 2023 | 2022 | Period Change | | :--- | :--- | :--- | :--- | | **Total revenue** | **$22,390** | **$16,389** | **$6,001** | | Cost of sales | 19,299 | 13,663 | 5,636 | | **Gross profit** | **$3,091** | **$2,726** | **$365** | | Research and development expenses | 48,752 | 39,719 | 9,033 | | Selling, general and administrative expenses | 29,942 | 31,634 | (1,692) | | **Operating loss** | **($75,603)** | **($68,627)** | **($6,976)** | | Total other income, net | 15,211 | 210,746 | (195,535) | | **Net (Loss) Income** | **($60,392)** | **$142,119** | **($202,511)** | - Total revenue increased by **$6.0 million (36.6%)** to **$22.4 million** in 2023 from **$16.4 million** in 2022, primarily due to increased commercial activities, new patients, and a full year of Eversense E3 revenue, partially offset by lower international sales[443](index=443&type=chunk) - Gross profit increased by **$0.4 million** to **$3.1 million** in 2023, but gross margin decreased from **16.6%** in 2022 to **13.8%** in 2023, mainly due to sales channel mix and higher raw material prices impacting contract manufacturing costs[444](index=444&type=chunk) - Research and development expenses increased by **$9.1 million** to **$48.8 million** in 2023, driven by investments in next-generation technologies, clinical studies, and an expanded R&D workforce[445](index=445&type=chunk)[447](index=447&type=chunk) - The company completed several financing transactions in 2023, including a **$25.0 million** initial term loan (with an additional **$10.0 million** funded in January 2024), issuance of pre-funded warrants for **$15.0 million**, and exchanges of 2025 Notes for cash and common stock, to strengthen its balance sheet[451](index=451&type=chunk)[452](index=452&type=chunk)[453](index=453&type=chunk)[455](index=455&type=chunk) Summary of Cash Flows (in thousands) | | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($70,163) | ($66,312) | | Net cash provided by investing activities | $89,713 | $26,882 | | Net cash provided by financing activities | $20,366 | $41,762 | | Net increase in cash and cash equivalents | $39,916 | $2,332 | [Overview](index=71&type=section&id=Overview) This section provides a general introduction to the company's financial performance and outlook [Critical Accounting Estimates](index=74&type=section&id=Critical%20Accounting%20Estimates) This section discusses accounting policies that require significant judgment and estimation [Revenue](index=74&type=section&id=Revenue) This section details the critical accounting estimates related to revenue recognition [Derivative Financial Instruments](index=75&type=section&id=Derivative%20Financial%20Instruments) This section discusses critical accounting estimates for derivative financial instruments [Results of Operations](index=76&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance over specified periods [Comparison of the Years Ended December 31, 2023 and 2022](index=76&type=section&id=Comparison%20of%20the%20Years%20Ended%20December%2031%2C%202023%20and%202022) This section compares the financial results for the fiscal years 2023 and 2022 [Components of Results of Operations](index=76&type=section&id=Components%20of%20Results%20of%20Operations) This section breaks down the individual elements contributing to the company's operating results [Total revenue](index=76&type=section&id=Total%20revenue) This section analyzes the company's total revenue streams [Cost of sales and gross profit](index=76&type=section&id=Cost%20of%20sales%20and%20gross%20profit) This section examines the cost of goods sold and resulting gross profit [Research and development expenses](index=76&type=section&id=Research%20and%20development%20expenses) This section details expenditures on research and development activities [Selling, general and administrative expenses](index=77&type=section&id=Selling%2C%20general%20and%20administrative%20expenses) This section analyzes expenses related to sales, marketing, and general corporate administration [Total other income, net](index=77&type=section&id=Total%20other%20income%2C%20net) This section covers non-operating income and expenses [Liquidity and Capital Resources](index=77&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations [Warrants](index=79&type=section&id=Warrants) This section discusses the company's outstanding warrants [Indebtedness](index=80&type=section&id=Indebtedness) This section details the company's debt obligations and financing arrangements [Loan and Security Agreement](index=80&type=section&id=Loan%20and%20Security%20Agreement) This section describes the terms of the company's loan and security agreement [PPP Loan](index=80&type=section&id=PPP%20Loan) This section provides information on the Paycheck Protection Program loan [Convertible Notes](index=80&type=section&id=Convertible%20Notes) This section details the company's convertible debt instruments [Funding Requirements and Outlook](index=80&type=section&id=Funding%20Requirements%20and%20Outlook) This section discusses future capital needs and the company's financial projections [Cash Flows](index=81&type=section&id=Cash%20Flows) This section analyzes the sources and uses of cash from operating, investing, and financing activities [Net cash used in operating activities](index=81&type=section&id=Net%20cash%20used%20in%20operating%20activities) This section details cash flows generated or used by the company's core business operations [Net cash provided by investing activities](index=81&type=section&id=Net%20cash%20provided%20by%20investing%20activities) This section describes cash flows related to the purchase or sale of assets [Net cash provided by financing activities](index=81&type=section&id=Net%20cash%20provided%20by%20financing%20activities) This section outlines cash flows from debt, equity, and dividend transactions [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are interest rate risk and foreign currency risk. Interest rate risk is minimal due to short-term maturities of cash equivalents and fixed interest rates on notes payable. Foreign currency risk arises from Euro-denominated international sales, but transaction gains and losses have not been material, and the company does not currently use hedging transactions - The company's primary market risk is interest rate sensitivity, but due to short-term maturities of cash equivalents and fixed interest rates on notes payable, an immediate **100 basis point** change in interest rates would not materially affect the fair value of cash equivalents[487](index=487&type=chunk) - Foreign currency risk stems from Euro-denominated international sales, where currency fluctuations can impact U.S. dollar revenue. However, foreign currency transaction gains and losses have not been material, and the company does not currently engage in hedging[488](index=488&type=chunk) [Interest Rate Risk](index=82&type=section&id=Interest%20Rate%20Risk) This section assesses the company's exposure to fluctuations in interest rates [Foreign Currency Risk](index=82&type=section&id=Foreign%20Currency%20Risk) This section evaluates the company's exposure to changes in foreign exchange rates [Item 8. Financial Statements and Supplementary Data](index=83&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for Senseonics Holdings, Inc. and its subsidiary for the years ended December 31, 2023, and 2022. It includes the Independent Registered Public Accounting Firm's report, consolidated balance sheets, statements of operations and comprehensive loss, statements of changes in stockholders' equity, and statements of cash flows. Detailed notes to the financial statements provide critical accounting estimates, revenue recognition policies, information on marketable securities, inventory, debt, equity, stock-based compensation, income taxes, related party transactions, fair value measurements, litigation, and subsequent events - KPMG LLP provided an unqualified opinion on the consolidated financial statements for the years ended December 31, 2023 and 2022, stating they present fairly, in all material respects, the financial position, results of operations, and cash flows in conformity with U.S. GAAP[492](index=492&type=chunk) Consolidated Balance Sheets (in thousands) | | December 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total assets** | **$138,220** | **$177,673** | | Total current liabilities | $17,257 | $31,471 | | Long-term debt and notes payables, net | $41,195 | $56,383 | | Derivative liabilities | $102 | $52,050 | | Other liabilities | $6,214 | $2,689 | | **Total liabilities** | **$64,768** | **$142,593** | | Total temporary equity | $37,656 | $37,656 | | **Total stockholders' equity (deficit)** | **$35,796** | **($2,576)** | Consolidated Statements of Operations and Comprehensive (Loss) Income (in thousands) | | 2023 | 2022 | | :--- | :--- | :--- | | Total revenue | $22,390 | $16,389 | | Gross profit | $3,091 | $2,726 | | Operating loss | ($75,603) | ($68,627) | | Total other income, net | $15,211 | $210,746 | | Net (Loss) Income | ($60,392) | $142,119 | | Total comprehensive (loss) income | ($59,725) | $141,653 | | Basic net (loss) income per common share | ($0.11) | $0.30 | | Diluted net loss per common share | ($0.11) | ($0.11) | Consolidated Statements of Cash Flows (in thousands) | | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($70,163) | ($66,312) | | Net cash provided by investing activities | $89,713 | $26,882 | | Net cash provided by financing activities | $20,366 | $41,762 | | Net increase in cash and cash equivalents | $39,916 | $2,332 | | Cash and cash equivalents, at ending of period | $75,709 | $35,793 | - The company's accumulated deficit reached **$869.3 million** as of December 31, 2023, reflecting substantial operating losses since inception, primarily from R&D and commercial launch activities[514](index=514&type=chunk) - As of December 31, 2023, the company had **$109.5 million** in cash, cash equivalents, and marketable securities, and management believes existing resources will meet anticipated operating needs for at least the next twelve months[450](index=450&type=chunk)[514](index=514&type=chunk)[524](index=524&type=chunk) [Report of KPMG LLP, Auditor ID:185, Independent Registered Public Accounting Firm](index=84&type=section&id=Report%20of%20KPMG%20LLP%2C%20Auditor%20ID%3A185%2C%20Independent%20Registered%20Public%20Accounting%20Firm) This section contains the independent auditor's report on the company's financial statements [Consolidated Balance Sheets as of December 31, 2023 and 2022](index=85&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20December%2031%2C%202023%20and%202022) This section presents the company's financial position at the end of 2023 and 2022 [Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022](index=86&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20for%20the%20years%20ended%20December%2031%2C%202023%20and%202022) This section presents the company's financial performance for the fiscal years 2023 and 2022 [Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2023 and 2022](index=87&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20for%20the%20years%20ended%20December%2031%2C%202023%20and%202022) This section details changes in the company's equity accounts for 2023 and 2022 [Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022](index=88&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20years%20ended%20December%2031%2C%202023%20and%202022) This section presents the company's cash inflows and outflows for the fiscal years 2023 and 2022 [Notes to Consolidated Financial Statements](index=89&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the financial statements [1. Organization](index=89&type=section&id=1.%20Organization) This section describes the company's legal structure and business operations [2. Liquidity and Capital Resources](index=89&type=section&id=2.%20Liquidity%20and%20Capital%20Resources) This section details the company's financial liquidity and available capital [3. Summary of Significant Accounting Policies](index=91&type=section&id=3.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the key accounting principles and methods used in preparing financial statements [Basis of Presentation](index=91&type=section&id=Basis%20of%20Presentation) This section describes the foundational principles for presenting the financial statements [Use of Estimates](index=91&type=section&id=Use%20of%20Estimates) This section explains the role of management's estimates in financial reporting [Cash and Cash Equivalents and Concentration of Credit Risk](index=92&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Concentration%20of%20Credit%20Risk) This section details cash, cash equivalents, and credit risk concentrations [Marketable Securities](index=92&type=section&id=Marketable%20Securities) This section describes the accounting for marketable securities [Inventory and Obsolescence](index=92&type=section&id=Inventory%20and%20Obsolescence) This section details the accounting policies for inventory and obsolescence [Accounts Receivable](index=92&type=section&id=Accounts%20Receivable) This section describes the accounting for accounts receivable [Property and Equipment, net](index=93&type=section&id=Property%20and%20Equipment%2C%20net) This section details the accounting for property and equipment [Leases](index=93&type=section&id=Leases) This section describes the accounting for lease arrangements [Impairment of Long-lived Assets](index=93&type=section&id=Impairment%20of%20Long-lived%20Assets) This section details the accounting policy for impairment of long-lived assets [Derivative Financial Instruments](index=93&type=section&id=Derivative%20Financial%20Instruments) This section describes the accounting for derivative financial instruments [Product Warranty Obligations](index=94&type=section&id=Product%20Warranty%20Obligations) This section details the accounting for product warranty liabilities [Revenue Recognition](index=94&type=section&id=Revenue%20Recognition) This section outlines the company's policies for recognizing revenue [Cost of Sales](index=95&type=section&id=Cost%20of%20Sales) This section describes the accounting for the cost of goods sold [Research and Development Expenses](index=95&type=section&id=Research%20and%20Development%20Expenses) This section details the accounting for research and development expenditures [Selling, General and Administrative Expenses](index=95&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) This section describes the accounting for selling, general, and administrative costs [Stock-Based Compensation](index=95&type=section&id=Stock-Based%20Compensation) This section details the accounting for stock-based compensation plans [Income Taxes](index=96&type=section&id=Income%20Taxes) This section describes the accounting for income taxes [Fair Value of Financial Instruments](index=96&type=section&id=Fair%20Value%20of%20Financial%20Instruments) This section details the fair value measurement of financial instruments [Recent Accounting Pronouncements](index=96&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the impact of newly issued accounting standards [4. Revenue Recognition](index=97&type=section&id=4.%20Revenue%20Recognition) This section provides detailed information on the company's revenue recognition policies [Revenues by geographic region](index=97&type=section&id=Revenues%20by%20geographic%20region) This section breaks down revenue generated from different geographical areas [Contract Assets](index=97&type=section&id=Contract%20Assets) This section describes the company's contract assets [Concentration of Revenues and Customers](index=97&type=section&id=Concentration%20of%20Revenues%20and%20Customers) This section identifies significant concentrations in revenue and customer base [5. Net Income (Loss) per Share](index=97&type=section&id=5.%20Net%20Income%20(Loss)%20per%20Share) This section details the calculation of basic and diluted net income or loss per share [6. Marketable Securities](index=99&type=section&id=6.%20Marketable%20Securities) This section provides detailed information on the company's marketable securities [7. Inventory, net](index=99&type=section&id=7.%20Inventory%2C%20net) This section details the company's inventory balances and related accounting [8. Prepaid expenses and other current assets](index=100&type=section&id=8.%20Prepaid%20expenses%20and%20other%20current%20assets) This section details the company's prepaid expenses and other current assets [9. Property and Equipment, net](index=100&type=section&id=9.%20Property%20and%20Equipment%2C%20net) This section provides detailed information on the company's property and equipment [10. Accrued Expenses and Other Current Liabilities](index=101&type=section&id=10.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This section details the company's accrued expenses and other current liabilities [11. Leases](index=101&type=section&id=11.%20Leases) This section provides detailed information on the company's lease obligations [12. 401(k) Plan](index=102&type=section&id=12.%20401(k)%20Plan) This section describes the company's 401(k) retirement plan [13. Notes Payable, Preferred Stock and Stock Purchase Warrants](index=102&type=section&id=13.%20Notes%20Payable%2C%20Preferred%20Stock%20and%20Stock%20Purchase%20Warrants) This section details the company's debt instruments, preferred stock, and warrants [Term Loans](index=102&type=section&id=Term%20Loans) This section describes the company's term loan agreements [Loan and Security Agreement](index=102&type=section&id=Loan%20and%20Security%20Agreement) This section details the terms of the company's loan and security agreement [PPP Loan](index=104&type=section&id=PPP%20Loan) This section provides information on the Paycheck Protection Program loan [Convertible Preferred Stock and Warrants](index=104&type=section&id=Convertible%20Preferred%20Stock%20and%20Warrants) This section details the company's convertible preferred stock and associated warrants [Equity Line Agreement](index=104&type=section&id=Equity%20Line%20Agreement) This section describes the company's equity line agreement [Securities Purchase Agreement](index=105&type=section&id=Securities%20Purchase%20Agreement) This section details the terms of the securities purchase agreement [Convertible Notes](index=105&type=section&id=Convertible%20Notes) This section provides detailed information on the company's convertible notes [PHC Notes](index=105&type=section&id=PHC%20Notes) This section describes the PHC convertible notes [2025 Notes](index=107&type=section&id=2025%20Notes) This section details the convertible notes due in 2025 [2023 Notes](index=109&type=section&id=2023%20Notes) This section describes the convertible notes due in 2023 [14. Stockholders' Deficit](index=110&type=section&id=14.%20Stockholders%27%20Deficit) This section details the components of the company's stockholders' deficit [Common Stock](index=110&type=section&id=Common%20Stock) This section provides information on the company's common stock [Preferred Stock](index=111&type=section&id=Preferred%20Stock) This section provides information on the company's preferred stock [Voting Rights](index=111&type=section&id=Voting%20Rights) This section describes the voting rights associated with the company's shares [Dividends](index=111&type=section&id=Dividends) This section outlines the company's dividend policy and history [Conversion Rights](index=111&type=section&id=Conversion%20Rights) This section details the conversion rights of certain securities [Stock Purchase Warrants](index=111&type=section&id=Stock%20Purchase%20Warrants) This section provides information on the company's stock purchase warrants [15. Stock-Based Compensation](index=112&type=section&id=15.%20Stock-Based%20Compensation) This section details the accounting for stock-based compensation plans and awards [2015 Plan](index=112&type=section&id=2015%20Plan) This section describes the company's 2015 stock incentive plan [Inducement Plan](index=112&type=section&id=Inducement%20Plan) This section details the company's inducement equity plan [Commercial Equity Plan](index=112&type=section&id=Commercial%20Equity%20Plan) This section describes the company's commercial equity plan [2016 Employee Stock Purchase Plan](index=113&type=section&id=2016%20Employee%20Stock%20Purchase%20Plan) This section details the company's 2016 employee stock purchase plan [1997 Plan](index=113&type=section&id=1997%20Plan) This section describes the company's 1997 stock incentive plan [Stock Options](index=113&type=section&id=Stock%20Options) This section provides information on the company's stock option awards [Restricted Stock Units](index=115&type=section&id=Restricted%20Stock%20Units) This section details the company's restricted stock unit awards [16. Income Taxes](index=117&type=section&id=16.%20Income%20Taxes) This section provides detailed information on the company's income tax position [17. Related Party Transactions](index=118&type=section&id=17.%20Related%20Party%20Transactions) This section details transactions between the company and its related parties [18. Fair Value Measurements](index=119&type=section&id=18.%20Fair%20Value%20Measurements) This section provides information on the fair value of financial instruments [19. Litigation](index=121&type=section&id=19.%20Litigation) This section details any ongoing or pending legal disputes involving the company [20. Subsequent Events](index=121&type=section&id=20.%20Subsequent%20Events) This section describes significant events occurring after the balance sheet date [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=122&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with accountants on accounting or financial disclosure matters - No changes in or disagreements with accountants on accounting and financial disclosure were reported[699](index=699&type=chunk) [Item 9A. Controls and Procedures](index=122&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of December 31, 2023, concluding they were effective at a reasonable assurance level. No material changes in internal control over financial reporting were identified during the quarter, and management concluded that internal control over financial reporting was effective as of December 31, 2023 - As of December 31, 2023, the company's disclosure controls and procedures were evaluated and deemed **effective** at the reasonable assurance level by management, including the CEO and CFO[699](index=699&type=chunk) - No material changes in internal control over financial reporting were identified during the quarter ended December 31, 2023[700](index=700&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2023, based on the COSO framework[701](index=701&type=chunk) [Item 9B. Other Information](index=123&type=section&id=Item%209B.%20Other%20Information) During the fiscal quarter ended December 31, 2023, no officers or directors adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No officers or directors adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended December 31, 2023[704](index=704&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=123&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - The company is not subject to disclosures regarding foreign jurisdictions that prevent inspections[705](index=705&type=chunk) PART III This part incorporates by reference information on corporate governance, executive compensation, security ownership, and auditor fees [Item 10. Directors, Executive Officers and Corporate Governance](index=123&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding the company's directors, executive officers, and corporate governance, including Section 16(a) beneficial ownership reporting compliance, is incorporated by reference from the 2024 Proxy Statement - Information on directors, executive officers, corporate governance, and Section 16(a) beneficial ownership reporting compliance is incorporated by reference from the 2024 Proxy Statement[708](index=708&type=chunk) [Item 11. Executive Compensation](index=123&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive and non-employee director compensation is incorporated by reference from the 2024 Proxy Statement - Information on executive compensation and non-employee director compensation is incorporated by reference from the 2024 Proxy Statement[708](index=708&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=123&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Details regarding security ownership of certain beneficial owners and management, along with securities authorized for issuance under equity compensation plans, are incorporated by reference from the 2024 Proxy Statement - Information on security ownership of certain beneficial owners and management, and securities authorized for issuance under equity compensation plans, is incorporated by reference from the 2024 Proxy Statement[709](index=709&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=123&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2024 Proxy Statement - Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2024 Proxy Statement[709](index=709&type=chunk) [Item 14. Principal Accountant Fees and Services](index=123&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the 2024 Proxy Statement - Information on principal accountant fees and services is incorporated by reference from the 2024 Proxy Statement[710](index=710&type=chunk) PART IV This part lists financial statement schedules and exhibits, and includes the required corporate signatures for the report [Item 15. Exhibit and Financial Statement Schedules](index=124&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed as part of the Annual Report on Form 10-K. It indicates that consolidated financial statements are presented in Part II, Item 8, and all financial schedules have been omitted as the information is either presented in the financial statements/notes or is not applicable. A comprehensive list of exhibits, including corporate documents, agreements, and certifications, is provided - Consolidated Financial Statements are listed in Part II, Item 8 of this Annual Report on Form 10-K[712](index=712&type=chunk) - All financial schedules are omitted because the required information is presented in the consolidated financial statements or notes, or is not applicable[713](index=713&type=chunk) - A comprehensive list of exhibits, including corporate documents, agreements, and certifications, is filed as part of this Annual Report or incorporated by reference[714](index=714&type=chunk) [Item 16. Form 10-K Summary](index=127&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - The company is not providing a Form 10-K Summary[719](index=719&type=chunk) [Signatures](index=128&type=section&id=Signatures) This section contains the required signatures for the Annual Report on Form 10-K, including those of the President and Chief Executive Officer, Chief Financial Officer, and members of the Board of Directors, affirming their authorization and compliance with the Securities Exchange Act of 1934 - The Annual Report on Form 10-K is duly signed by the President and Chief Executive Officer, Chief Financial Officer, and members of the Board of Directors, as required by Section 13 or 15(d) of the Securities Exchange Act of 1934[722](index=722&type=chunk)[724](index=724&type=chunk)[725](index=725&type=chunk)[726](index=726&type=chunk)

Exhibit 99.1 GERMANTOWN, MD, February 29, 2024 —Senseonics Holdings, Inc. (NYSE American: SENS), a medical technology company focused on the development and manufacturing of long-term, implantable continuous glucose monitoring (CGM) systems for people with diabetes, today reported financial results for the quarter and full year ended December 31, 2023. SENSEONICS HOLDINGS, INC. REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS Recent Highlights & Accomplishments: "2023 was a successful year across ...

Senseonics Holdings, Inc. (NYSE:SENS) Q3 2023 Earnings Call Transcript November 9, 2023 4:30 PM ET Company Participants Trip Taylor - IR Tim Goodnow - President and CEO Rick Sullivan - CFO Mukul Jain - COO Conference Call Participants Marie Thibault - BTIG Jayson Bedford - Raymond James Operator Good day and welcome to the Senseonics Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note today's event is being recorded. I would now like ...

[PART I: Financial Information](index=2&type=section&id=PART%20I%3A%20Financial%20Information) This section provides an overview of the company's financial performance and position, including statements and detailed notes [ITEM 1: Financial Statements](index=3&type=section&id=ITEM%201%3A%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income (loss), statements of changes in stockholders' equity (deficit), and statements of cash flows, along with detailed notes explaining the company's financial position, performance, and accounting policies for the periods ended September 30, 2023, and December 31, 2022 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates **Condensed Consolidated Balance Sheets (in thousands)** | Metric | Sep 30, 2023 (Unaudited) (in thousands) | Dec 31, 2022 (in thousands) | | :-------------------------------- | :------------------------------------- | :-------------------------- | | **Assets** | | | | Cash and cash equivalents | $55,759 | $35,793 | | Short term investments, net | $69,648 | $108,222 | | Total current assets | $146,140 | $161,200 | | Total assets | $154,065 | $177,673 | | **Liabilities** | | | | Total current liabilities | $17,302 | $31,471 | | Long-term debt and notes payables, net | $40,485 | $56,383 | | Derivative liabilities | $245 | $52,050 | | Total liabilities | $64,344 | $142,593 | | **Stockholders' Equity (Deficit)** | | | | Total stockholders' equity (deficit) | $52,065 | $(2,576) | - Total assets decreased from **$177.7 million** at December 31, 2022, to **$154.1 million** at September 30, 2023. Total liabilities decreased significantly from **$142.6 million** to **$64.3 million**, primarily due to a reduction in derivative liabilities and long-term debt. Stockholders' equity shifted from a deficit of **$2.6 million** to a positive **$52.1 million**[8](index=8&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) This section outlines the company's revenues, expenses, and net income or loss over specific reporting periods **Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands)** | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total revenue | $6,097 | $4,622 | $14,360 | $10,818 | | Gross profit | $1,172 | $756 | $2,002 | $2,107 | | Operating loss | $(19,022) | $(17,569) | $(58,599) | $(49,766) | | Total other (expense) income, net | $(5,081) | $(42,822) | $15,397 | $180,324 | | Net (Loss) Income | $(24,103) | $(60,391) | $(43,202) | $130,558 | | Basic net (loss) income per common share | $(0.04) | $(0.13) | $(0.08) | $0.28 | | Diluted net loss per common share | $(0.04) | $(0.13) | $(0.08) | $(0.10) | - For the three months ended September 30, 2023, total revenue increased by **$1.5 million** to **$6.1 million**, and net loss decreased significantly from **$(60.4) million** to **$(24.1) million**, primarily due to a substantial reduction in other expenses, net. For the nine months ended September 30, 2023, total revenue increased to **$14.4 million**, but the company reported a net loss of **$(43.2) million**, a significant shift from the **$130.6 million** net income in the prior year, mainly due to changes in fair value adjustments of options and derivatives[11](index=11&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20%28Deficit%29) This section details changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit **Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (in thousands)** | Metric (in thousands) | Balance, Dec 31, 2022 | Balance, Sep 30, 2023 | | :------------------------------------ | :-------------------- | :-------------------- | | Common Stock (Shares) | 479,637 | 528,176 | | Common Stock (Amount) | $480 | $528 | | Additional Paid-In Capital | $806,488 | $903,665 | | Accumulated Deficit | $(808,866) | $(852,069) | | Total Stockholders' Equity (Deficit) | $(2,576) | $52,065 | - The company's total stockholders' equity shifted from a deficit of **$2.6 million** at December 31, 2022, to a positive **$52.1 million** at September 30, 2023. This improvement was driven by an increase in additional paid-in capital by **$97.2 million**, primarily from the issuance of common stock, warrants, and the exchange of **2025 Notes**, despite an increase in accumulated deficit[14](index=14&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports cash inflows and outflows from operating, investing, and financing activities over specific periods **Unaudited Condensed Consolidated Statements of Cash Flows (in thousands)** | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(55,096) | $(48,925) | | Net cash provided by investing activities | $53,518 | $19,532 | | Net cash provided by financing activities | $21,544 | $31,416 | | Net increase in cash, cash equivalents | $19,966 | $2,023 | | Cash, cash equivalents, at ending of period | $55,759 | $35,484 | - Net cash used in operating activities increased to **$55.1 million** for the nine months ended September 30, 2023, from **$48.9 million** in the prior year. However, net cash provided by investing activities significantly increased to **$53.5 million** (from **$19.5 million**), and net cash provided by financing activities was **$21.5 million** (down from **$31.4 million**), resulting in a net increase in cash and cash equivalents of **$19.9 million**, compared to **$2.0 million** in the prior year[15](index=15&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Organization and Nature of Operations](index=10&type=section&id=1.%20Organization%20and%20Nature%20of%20Operations) This note describes the company's primary business as a medical technology firm focused on continuous glucose monitoring systems - Senseonics Holdings, Inc. is a medical technology company focused on developing and manufacturing long-term, implantable continuous glucose monitoring (CGM) systems to improve diabetes management[17](index=17&type=chunk) [2. Liquidity and Capital Resources](index=10&type=section&id=2.%20Liquidity%20and%20Capital%20Resources) This note discusses the company's financial resources, funding strategies, and ability to meet short-term and long-term obligations - The company has incurred substantial losses and negative cash flows from operations since inception, with an accumulated deficit of **$852.1 million** as of September 30, 2023. Operations have been funded primarily through preferred stock, common stock, warrants, convertible notes, and debt[19](index=19&type=chunk) **Key Liquidity Metrics (in millions)** | Metric | Sep 30, 2023 | | :-------------------------------- | :----------- | | Cash, cash equivalents, and marketable securities | $125.4 | - On September 8, 2023, the company entered into a Loan and Security Agreement for up to **$50.0 million** in senior secured term loans, with an initial **$25.0 million** funded. Additionally, in August 2023, the company exchanged **$30.8 million** of **2025 Notes** for **$7.5 million** cash and **35.1 million** common shares[20](index=20&type=chunk)[21](index=21&type=chunk) - The company also entered into an Equity Distribution Agreement with Goldman Sachs & Co. LLC in August 2023 to sell up to **$106.6 million** of common stock in an 'at the market' offering, with no sales made as of September 30, 2023. The previous **2021 Sales Agreement** with Jefferies LLC was terminated in August 2023, after generating **$7.4 million** in net proceeds from common stock sales in **2023**[22](index=22&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) [3. Summary of Significant Accounting Policies](index=14&type=section&id=3.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and estimation methods used in preparing the financial statements - The unaudited consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information, with certain disclosures condensed or omitted as permitted by SEC rules. The company operates in one segment: glucose monitoring products[30](index=30&type=chunk)[31](index=31&type=chunk) - The company adopted **ASU 2016-13** (Credit Losses) as of January 1, 2023, which did not have a material impact on the financial statements. Management uses estimates for various items, including stock-based compensation, derivative liabilities, and inventory obsolescence[32](index=32&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk) [4. Revenue Recognition](index=16&type=section&id=4.%20Revenue%20Recognition) This note details how and when the company recognizes revenue from its product sales and related agreements - Revenue is generated from sales of the Eversense system and components to Ascensia, third-party distributors, and strategic fulfillment partners. Revenue is recognized when customers obtain control of the product, with some revenue recognized through a consignment program when the product is consumed by a patient[37](index=37&type=chunk)[150](index=150&type=chunk) **Net Revenue by Geographic Region (in thousands)** | Region | Three Months Ended Sep 30, 2023 | % of Total (3M) | Three Months Ended Sep 30, 2022 | % of Total (3M) | | :---------------------- | :------------------------------ | :-------------- | :------------------------------ | :-------------- | | United States | $3,930 | 64.5% | $1,934 | 41.8% | | Outside of the United States | $2,167 | 35.5% | $2,688 | 58.2% | | **Total** | **$6,097** | **100.0%** | **$4,622** | **100.0%** | | Region | Nine Months Ended Sep 30, 2023 | % of Total (9M) | Nine Months Ended Sep 30, 2022 | % of Total (9M) | | :---------------------- | :------------------------------ | :-------------- | :------------------------------ | :-------------- | | United States | $7,885 | 54.9% | $3,908 | 36.1% | | Outside of the United States | $6,475 | 45.1% | $6,910 | 63.9% | | **Total** | **$14,360** | **100.0%** | **$10,818** | **100.0%** | - Ascensia accounted for **93%** and **97%** of total revenue for the three months ended September 30, 2023 and 2022, respectively, and **92%** and **95%** for the nine months ended September 30, 2023 and 2022, respectively, indicating a high concentration of revenue from this single customer[41](index=41&type=chunk)[154](index=154&type=chunk) [5. Net Income (Loss) per Share](index=18&type=section&id=5.%20Net%20Income%20%28Loss%29%20per%20Share) This note presents the calculation of basic and diluted net income or loss per common share for the reporting periods **Net (Loss) Income Per Common Share** | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Basic net (loss) income per common share | $(0.04) | $(0.13) | $(0.08) | $0.28 | | Diluted net loss per common share | $(0.04) | $(0.13) | $(0.08) | $(0.10) | | Basic weighted-average shares outstanding | 592,452,262 | 472,475,747 | 552,703,546 | 464,244,736 | | Diluted weighted-average shares outstanding | 592,452,262 | 472,475,747 | 552,703,546 | 608,345,713 | - Basic and diluted net loss per common share for the three and nine months ended September 30, 2023, were **$(0.04)** and **$(0.08)**, respectively, an improvement from **$(0.13)** for the three months ended September 30, 2022, but a decline from **$0.28** basic net income per share for the nine months ended September 30, 2022. The increase in weighted-average shares outstanding reflects recent equity issuances and warrant exchanges[46](index=46&type=chunk) - In periods of net loss, all potentially dilutive common shares are excluded from diluted EPS calculation as their effect would be anti-dilutive[44](index=44&type=chunk) [6. Marketable Securities](index=20&type=section&id=6.%20Marketable%20Securities) This note provides details on the company's marketable securities, including their fair value and changes over time **Marketable Securities Available for Sale (in thousands)** | Type | Sep 30, 2023 (Estimated Market Value) | Dec 31, 2022 (Estimated Market Value) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Commercial Paper | $26,281 | $41,503 | | Corporate debt securities | $7,920 | $32,142 | | Government and agency securities | $35,447 | $38,570 | | **Total** | **$69,648** | **$120,475** | - The total estimated market value of marketable securities decreased from **$120.5 million** at December 31, 2022, to **$69.6 million** at September 30, 2023. Unrealized losses on available-for-sale securities were not significant and were primarily due to changes in interest rates, not increased credit risk[47](index=47&type=chunk) [7. Inventory, net](index=20&type=section&id=7.%20Inventory%2C%20net) This note details the composition of the company's inventory, including finished goods, work-in-process, and raw materials **Inventory, net (in thousands)** | Category | Sep 30, 2023 | Dec 31, 2022 | | :--------------- | :----------- | :----------- | | Finished goods | $2,440 | $1,697 | | Work-in-process | $5,981 | $4,057 | | Raw materials | $1,305 | $1,552 | | **Total** | **$9,726** | **$7,306** | - Total inventory, net, increased from **$7.3 million** at December 31, 2022, to **$9.7 million** at September 30, 2023, driven by increases in finished goods and work-in-process. The company charged less than **$0.1 million** to cost of sales for inventory obsolescence for the three and nine months ended September 30, 2023, a decrease from **$0.5 million** in the prior year[48](index=48&type=chunk)[49](index=49&type=chunk) [8. Prepaid Expenses and Other Current Assets](index=22&type=section&id=8.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This note outlines the company's prepaid expenses and other current assets, including contract manufacturing and tax credits **Prepaid Expenses and Other Current Assets (in thousands)** | Category | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------------ | :----------- | :----------- | | Contract manufacturing | $4,577 | $4,097 | | Tax credits receivable | $1,793 | $0 | | Insurance | $340 | $1,243 | | Clinical and Preclinical | $180 | $924 | | **Total prepaid expenses and other current assets** | **$7,557** | **$7,428** | - Total prepaid expenses and other current assets remained relatively stable at **$7.6 million** as of September 30, 2023, compared to **$7.4 million** at December 31, 2022. A notable change is the recognition of **$1.8 million** in tax credits receivable (refundable employee retention credits) in **2023**[50](index=50&type=chunk) [9. Accrued Expenses and Other Current Liabilities](index=22&type=section&id=9.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This note details the company's accrued expenses and other current liabilities, categorized by type of service or obligation **Accrued Expenses and Other Current Liabilities (in thousands)** | Category | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------------ | :----------- | :----------- | | Research and development | $4,168 | $3,502 | | Professional and administrative services | $3,947 | $1,053 | | Compensation and benefits | $3,569 | $4,699 | | Contract manufacturing | $1,396 | $2,480 | | Sales and marketing services | $242 | $2,050 | | **Total accrued expenses and other current liabilities** | **$14,633** | **$15,453** | - Total accrued expenses and other current liabilities decreased slightly from **$15.5 million** at December 31, 2022, to **$14.6 million** at September 30, 2023. Significant changes include an increase in professional and administrative services accruals and decreases in compensation and benefits, contract manufacturing, and sales and marketing services accruals[51](index=51&type=chunk) [10. Leases](index=22&type=section&id=10.%20Leases) This note describes the company's lease arrangements, including its corporate headquarters, and related assets and liabilities - The company leases approximately **33,000** square feet for its corporate headquarters. In May 2023, the lease was amended and extended through May 31, 2033, resulting in a **$2.5 million** increase to the Right-of-Use (ROU) asset and a **$3.8 million** increase to the lease liability[52](index=52&type=chunk) **Operating Lease Assets and Liabilities (in thousands)** | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Operating lease ROU assets | $5,261 | $3,032 | | Non-current operating lease liabilities | $6,312 | $2,689 | | **Total operating lease liabilities** | **$6,725** | **$3,414** | - Operating lease expense for the nine months ended September 30, 2023, was **$0.6 million**, up from **$0.5 million** in the prior year[53](index=53&type=chunk) [11. Product Warranty Obligations](index=24&type=section&id=11.%20Product%20Warranty%20Obligations) This note explains the company's product warranty policy and the associated reserve for estimated replacement costs - The company provides a one-year warranty on its smart transmitters and may replace Eversense system components. Estimated replacement costs are recorded as a charge to cost of sales at the time of shipment[55](index=55&type=chunk) **Warranty Reserve (in thousands)** | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Balance at end of the period | $517 | $781 | | Provision for warranties during the period (9M/12M) | $136 | $166 | | Settlements made during the period (9M/12M) | $(400) | $(108) | [12. Notes Payable, Preferred Stock and Stock Purchase Warrants](index=25&type=section&id=12.%20Notes%20Payable%2C%20Preferred%20Stock%20and%20Stock%20Purchase%20Warrants) This note details the company's debt instruments, preferred stock, and warrants, including terms and recent transactions - On September 8, 2023, the company entered into a Loan and Security Agreement for up to **$50.0 million** in senior secured term loans, with an initial **$25.0 million** funded. The loans mature on September 1, 2027, bear interest at prime rate plus **1.40%** (or **9.90%**), and are secured by substantially all company assets[57](index=57&type=chunk)[58](index=58&type=chunk)[60](index=60&type=chunk) - In connection with the Tranche **1 Loan**, the company issued warrants to lenders to acquire **832,362** common shares at **$0.6007** per share, recorded in equity as a debt discount[64](index=64&type=chunk) - In March 2023, the company exchanged **$35.0 million** of **PHC Notes** for a pre-funded warrant to purchase **68,525,311** common shares, resulting in a net gain on exchange of **$18.8 million**. Additionally, PHC purchased a pre-funded warrant for **15,425,750** common shares for **$15.0 million**[27](index=27&type=chunk)[29](index=29&type=chunk)[93](index=93&type=chunk) - In August 2023, the company exchanged **$30.8 million** of **2025 Notes** for **$7.5 million** cash and **35.1 million** common shares, resulting in a **$4.6 million** extinguishment loss. Approximately **$20.4 million** of **2025 Notes** remain outstanding[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) **Notes Payable Carrying Amounts (in thousands)** | Note Type | Sep 30, 2023 (Carrying Amount) | Dec 31, 2022 (Carrying Amount) | | :-------------------------- | :----------------------------- | :----------------------------- | | 2025 Notes | $16,605 | $35,918 | | Loan and Security Agreement | $23,880 | $0 | | 2023 Notes | $0 | $15,579 | | PHC Notes | $0 | $20,465 | | **Total** | **$40,485** | **$71,962** | **Interest Expense Related to Notes Payable (in thousands)** | Note Type | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------- | :----------------------------- | :----------------------------- | | 2023 Notes | $189 | $1,640 | | 2025 Notes | $6,770 | $6,104 | | PHC Notes | $2,230 | $6,053 | | Loan and Security Agreement | $199 | $0 | | **Total** | **$9,388** | **$13,803** | [13. Stockholders' Equity (Deficit)](index=38&type=section&id=13.%20Stockholders%27%20Equity%20%28Deficit%29) This note provides an overview of the components of stockholders' equity, including common stock and capital transactions - During the nine months ended September 30, 2023, the company received **$7.4 million** in net proceeds from the sale of **9,944,663** common shares under the **2021 Sales Agreement**, which was terminated in August 2023. A new Equity Distribution Agreement with Goldman Sachs & Co. LLC allows for the sale of up to **$106.6 million** of common stock, with no sales as of September 30, 2023[108](index=108&type=chunk)[109](index=109&type=chunk) [14. Stock-Based Compensation](index=38&type=section&id=14.%20Stock-Based%20Compensation) This note describes the company's equity incentive plans and the accounting for stock-based compensation expenses - The company has several equity incentive plans: the Amended and Restated **2015 Plan** (**28.97 million** shares available), the Inducement Plan (**172,256** shares available), and the **2023 Commercial Equity Plan** (**7.06 million** shares available). The **2016 Employee Stock Purchase Plan (ESPP)** had **17.62 million** shares available, with **222,312** shares purchased in **2023**[111](index=111&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) [15. Fair Value Measurements](index=42&type=section&id=15.%20Fair%20Value%20Measurements) This note details the fair value hierarchy used for financial assets and liabilities, including derivative instruments **Fair Value Hierarchy of Financial Assets and Liabilities (in thousands)** | Category | Sep 30, 2023 (Total) | Dec 31, 2022 (Total) | | :------------------------------------ | :------------------- | :------------------- | | **Assets** | | | | Money market funds | $52,696 | $34,658 | | Commercial paper | $26,281 | $41,503 | | Corporate debt securities | $7,920 | $32,142 | | Government and agency securities | $35,447 | $38,570 | | **Liabilities** | | | | Embedded features of the 2025 Notes | $245 | $7,859 | | Embedded features of the PHC Notes | $0 | $44,191 | | Embedded features of the 2023 Notes | $0 | $20 | - The fair value of embedded features of the **PHC Notes** and **2023 Notes** decreased to **$0** at September 30, 2023, due to their exchange and repayment, respectively. The embedded features of the **2025 Notes** decreased from **$7.9 million** to **$0.2 million**. Level **3** fair value measurements for embedded features use unobservable inputs like stock price volatility, conversion probabilities, and credit spread[121](index=121&type=chunk)[122](index=122&type=chunk) [16. Income Taxes](index=43&type=section&id=16.%20Income%20Taxes) This note explains the company's income tax position, including deferred tax assets and the valuation allowance - The company has not recorded any tax provision or benefit for the nine months ended September 30, 2023 or 2022, due to a full valuation allowance against its net deferred tax assets, as realization of future benefits is not considered more-likely-than-not[123](index=123&type=chunk) [17. Related Party Transactions](index=43&type=section&id=17.%20Related%20Party%20Transactions) This note discloses transactions and balances with related parties, primarily PHC and its subsidiary Ascensia - PHC, a noncontrolling owner with board representation, and its subsidiary Ascensia, are related parties. Revenue from Ascensia was **$13.2 million** for the nine months ended September 30, 2023, up from **$10.3 million** in the prior year. The company also purchases medical supplies from Ascensia[124](index=124&type=chunk) **Related Party Balances (in millions)** | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Amount due from Ascensia | $2.7 | $2.3 | | Amount due to Ascensia | $0.5 | $0.9 | [18. Subsequent Events](index=43&type=section&id=18.%20Subsequent%20Events) This note reports on events occurring after the balance sheet date that may require disclosure or adjustment - The company evaluated subsequent events through the filing date of the Form **10-Q** and found no events requiring recognition or disclosure[126](index=126&type=chunk) [ITEM 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=ITEM%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key business developments, financial performance for the three and nine months ended September 30, 2023, and an assessment of liquidity and capital resources [Overview](index=44&type=section&id=Overview) This section provides a high-level summary of the company's business, product development, and commercialization efforts - Senseonics is a medical technology company developing long-term implantable continuous glucose monitoring (CGM) systems, Eversense, for diabetes management. The Eversense **E3 CGM** system, with a six-month sensor life, received **FDA** approval in February 2022 and **CE** mark in June 2022[129](index=129&type=chunk) - The company is in early commercialization, focusing on driving awareness among intensively managed patients and healthcare providers. Reimbursement is crucial, with approximately **300 million** covered lives in the U.S. through positive insurance payor decisions, including UnitedHealthcare effective July 1, 2023[131](index=131&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk) - The ENHANCE pivotal study for the Eversense **365-day** system completed adult cohort enrollment in **Q3 2023**, with data expected by end of **2023** to support an **FDA** submission in early **2024**. Pediatric patient enrollment began in **Q2 2023**[133](index=133&type=chunk)[143](index=143&type=chunk) [United States Development and Commercialization of Eversense](index=46&type=section&id=United%20States%20Development%20and%20Commercialization%20of%20Eversense) This section details the regulatory approvals and commercialization strategy for Eversense CGM systems in the U.S. market - The **90-day Eversense CGM** system received **FDA PMA** approval in June 2018 and non-adjunctive indication (dosing claim) in June 2019, allowing it to replace fingerstick blood glucose measurements for treatment decisions. The **180-day Eversense E3 CGM** system was **FDA** approved in February 2022[135](index=135&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk)[142](index=142&type=chunk) - In August 2020, the company entered into an exclusive collaboration and commercialization agreement with Ascensia for worldwide distribution of Eversense CGM systems. Ascensia assumed commercial responsibilities for the **90-day Eversense** product in the U.S. during **Q2 2021** and began commercializing Eversense **E3** in **Q2 2022**[141](index=141&type=chunk)[142](index=142&type=chunk) - The Eversense **XL** received **MRI** approval in the **EEA** in April 2020, a first for the **CGM** category, meaning the sensor does not need to be removed during **MRI** scanning[140](index=140&type=chunk) [European Commercialization of Eversense](index=48&type=section&id=European%20Commercialization%20of%20Eversense) This section outlines the regulatory approvals and commercialization efforts for Eversense CGM systems in European markets - The Eversense **XL CGM** system received **CE** mark in September 2017 for up to **180-day** sensor life and began commercialization in Europe in **Q4 2017**. The Eversense **E3 CGM** system received **CE** mark in June 2022, with Ascensia commencing commercialization in European markets in **H2 2022**[144](index=144&type=chunk)[148](index=148&type=chunk) - A distribution agreement with Roche, which covered **EMEA** and other regions, concluded on January 31, 2021, transitioning distribution to Ascensia[145](index=145&type=chunk)[147](index=147&type=chunk) [Financial Overview](index=50&type=section&id=Financial%20Overview) This section summarizes the company's financial performance, including revenue recognition and customer concentration [Revenue](index=50&type=section&id=Revenue) This section explains the sources and recognition policies for the company's product revenue, including variable consideration - Product revenue is generated from sales of the Eversense system to Ascensia, third-party distributors, and strategic fulfillment partners. Revenue is recognized when customers obtain control of the product, or when consumed by a patient under consignment[149](index=149&type=chunk)[150](index=150&type=chunk) - Variable consideration, such as discounts and revenue share (for Ascensia), is included in revenue to the extent that a significant reversal is improbable. Contract assets consist of unbilled receivables related to the Ascensia Commercialization Agreement[151](index=151&type=chunk)[153](index=153&type=chunk) [Concentration of Revenue and Customers](index=50&type=section&id=Concentration%20of%20Revenue%20and%20Customers) This section highlights the company's reliance on key customers for a significant portion of its total revenue - Ascensia remains the primary customer, accounting for **93%** and **97%** of total revenue for the three months ended September 30, 2023 and 2022, respectively, and **92%** and **95%** for the nine months ended September 30, 2023 and 2022, respectively[154](index=154&type=chunk) [Revenue by Geographic Region](index=52&type=section&id=Revenue%20by%20Geographic%20Region) This section breaks down the company's net revenue by geographic region, showing market performance trends **Net Revenue by Geographic Region (in thousands)** | Region | Three Months Ended Sep 30, 2023 | % of Total (3M) | Three Months Ended Sep 30, 2022 | % of Total (3M) | | :---------------------- | :------------------------------ | :-------------- | :------------------------------ | :-------------- | | United States | $3,930 | 64.5% | $1,934 | 41.8% | | Outside of the United States | $2,167 | 35.5% | $2,688 | 58.2% | | **Total** | **$6,097** | **100.0%** | **$4,622** | **100.0%** | | Region | Nine Months Ended Sep 30, 2023 | % of Total (9M) | Nine Months Ended Sep 30, 2022 | % of Total (9M) | | :---------------------- | :------------------------------ | :-------------- | :------------------------------ | :-------------- | | United States | $7,885 | 54.9% | $3,908 | 36.1% | | Outside of the United States | $6,475 | 45.1% | $6,910 | 63.9% | | **Total** | **$14,360** | **100.0%** | **$10,818** | **100.0%** | - U.S. revenue significantly increased its share of total revenue, reaching **64.5%** for the three months and **54.9%** for the nine months ended September 30, 2023, compared to **41.8%** and **36.1%** in the prior year periods, respectively. This indicates a shift towards stronger U.S. market performance[155](index=155&type=chunk) [Results of Operations for the Three Months Ended September 30, 2023 and 2022](index=53&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202023%20and%202022) This section analyzes the company's financial performance for the three-month periods, including revenue, expenses, and net loss **Summary of Operations (Three Months Ended September 30, in thousands)** | Metric | 2023 | 2022 | Period-to-Period Change | | :------------------------------------ | :----- | :----- | :---------------------- | | Total revenue | $6,097 | $4,622 | $1,475 | | Gross profit | $1,172 | $756 | $416 | | Research and development expenses | $12,769 | $10,985 | $1,784 | | Selling, general and administrative expenses | $7,425 | $7,340 | $85 | | Operating loss | $(19,022) | $(17,569) | $(1,453) | | Total other (expense) income, net | $(5,081) | $(42,822) | $37,741 | | Net (Loss) Income | $(24,103) | $(60,391) | $36,288 | - Total revenue increased by **$1.5 million (32%)** to **$6.1 million**, primarily due to higher shipments of Eversense **E3** in the U.S. Gross profit increased by **$0.4 million (55%)** to **$1.2 million**, with gross margin improving from **16.4%** to **19.2%**[158](index=158&type=chunk)[159](index=159&type=chunk) - Research and development expenses increased by **$1.8 million (16%)** to **$12.8 million**, driven by investments in next-generation technologies and personnel costs. Selling, general and administrative expenses remained relatively stable[160](index=160&type=chunk)[161](index=161&type=chunk) - Net loss significantly decreased by **$36.3 million**, from **$(60.4) million** to **$(24.1) million**, primarily due to a **$37.7 million** increase in other income, net, largely from changes in fair value adjustments of options and derivatives[156](index=156&type=chunk)[162](index=162&type=chunk) [Results of Operations for the Nine Months Ended September 30, 2023 and 2022](index=54&type=section&id=Results%20of%20Operations%20for%20the%20Nine%20Months%20Ended%20September%2030%2C%202023%20and%202022) This section analyzes the company's financial performance for the nine-month periods, including revenue, expenses, and net loss **Summary of Operations (Nine Months Ended September 30, in thousands)** | Metric | 2023 | 2022 | Period-to-Period Change | | :------------------------------------ | :----- | :----- | :---------------------- | | Total revenue | $14,360 | $10,818 | $3,542 | | Gross profit | $2,002 | $2,107 | $(105) | | Research and development expenses | $38,003 | $28,088 | $9,915 | | Selling, general and administrative expenses | $22,598 | $23,785 | $(1,187) | | Operating loss | $(58,599) | $(49,766) | $(8,833) | | Total other (expense) income, net | $15,397 | $180,324 | $(164,927) | | Net (Loss) Income | $(43,202) | $130,558 | $(173,760) | - Total revenue increased by **$3.5 million (32.7%)** to **$14.4 million**, driven by higher Eversense **E3** shipments in the U.S. Gross profit decreased by **$0.1 million (5%)** to **$2.0 million**, with gross margin declining from **19.5%** to **13.9%** due to increased revenue share percentage to Ascensia, sales channel mix, and higher manufacturing/logistics costs[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - Research and development expenses increased by **$9.9 million (35.3%)** to **$38.0 million**, primarily due to a **$6.1 million** increase in clinical studies and **$3.8 million** in personnel/support services for next-generation technologies. Selling, general and administrative expenses decreased by **$1.2 million (5%)** due to reduced personnel and other G&A costs[167](index=167&type=chunk)[168](index=168&type=chunk) - The company reported a net loss of **$(43.2) million**, a significant decrease of **$173.8 million** from the **$130.6 million** net income in the prior year. This change was primarily driven by a **$145.7 million** change in fair value of derivatives and a **$41.3 million** change in fair value of options, partially offset by a **$14.2 million** net extinguishment loss on notes exchange[163](index=163&type=chunk)[169](index=169&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to generate and manage cash, detailing funding sources and future requirements [Sources of Liquidity](index=56&type=section&id=Sources%20of%20Liquidity) This section identifies the primary means by which the company obtains cash to fund its operations and investments - The company has incurred substantial losses and cumulative negative cash flows from operations since inception, with an accumulated deficit of **$852.1 million** as of September 30, 2023. Operations have been funded primarily through preferred stock, common stock, warrants, convertible notes, and debt[170](index=170&type=chunk) **Key Liquidity Metrics (in millions)** | Metric | Sep 30, 2023 | | :-------------------------------- | :----------- | | Cash, cash equivalents, and marketable securities | $125.4 | - Recent financing activities include a **$25.0 million** initial term loan from Hercules Capital (part of a **$50.0 million** facility), exchange of **$30.8 million** of **2025 Notes** for cash and common stock, and a new Equity Distribution Agreement with Goldman Sachs & Co. LLC for up to **$106.6 million** in common stock sales[171](index=171&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) - The company also exchanged **$35.0 million** of **PHC Notes** for a pre-funded warrant to purchase **68,525,311** common shares and sold a Purchase Warrant to PHC for **$15.0 million** to maintain beneficial ownership[181](index=181&type=chunk)[182](index=182&type=chunk) [Indebtedness](index=60&type=section&id=Indebtedness) This section details the company's outstanding debt obligations, including term loans and convertible notes - The company's indebtedness includes the Term Loan Facility from Hercules Capital, with an initial **$25.0 million** funded, maturing September 1, 2027. The **PPP Loan** of **$5.8 million** was fully repaid in April 2022[184](index=184&type=chunk)[186](index=186&type=chunk) **Outstanding Convertible Notes (as of Sep 30, 2023)** | Note Type | Coupon | Issuance Date | Aggregate Principal (in millions) | Maturity Date | Initial Conversion Rate per $1,000 Principal Amount | Conversion Price per Share | | :-------------------------- | :----- | :------------ | :-------------------------------- | :------------ | :-------------------------------------------------- | :------------------------- | | 2025 Notes | 5.25% | July 1, 2019 | $20.4 | January 15, 2025 | 757.5758 | $1.32 | - A series of exchange agreements in August 2023 converted **$30.8 million** of **2025 Notes** into cash and common stock[187](index=187&type=chunk) [Funding Requirements and Outlook](index=61&type=section&id=Funding%20Requirements%20and%20Outlook) This section discusses the company's future capital needs and its strategy for securing necessary funding - The company's ability to grow revenues and achieve profitability depends on successful commercialization, adoption of Eversense **CGM** systems, future product development, and regulatory approvals. These activities require significant working capital[188](index=188&type=chunk) - Existing cash, cash equivalents, and future cash flows are expected to be sufficient to meet operating plans into **2025**. The company will continue to monitor its capital structure and may seek additional funding through debt and equity markets[189](index=189&type=chunk) [Cash Flows](index=61&type=section&id=Cash%20Flows) This section provides a summary of cash inflows and outflows from operating, investing, and financing activities **Summary of Cash Flows (Nine Months Ended September 30, in thousands)** | Cash Flow Activity | 2023 | 2022 | | :------------------------------------ | :--------- | :--------- | | Net cash used in operating activities | $(55,096) | $(48,925) | | Net cash provided by investing activities | $53,518 | $19,532 | | Net cash provided by financing activities | $21,544 | $31,416 | | Net increase in cash and cash equivalents | $19,966 | $2,023 | [Net cash used in operating activities](index=61&type=section&id=Net%20cash%20used%20in%20operating%20activities) This section details the cash generated or consumed by the company's core business operations - Net cash used in operating activities increased to **$55.1 million** for the nine months ended September 30, 2023, from **$48.9 million** in the prior year. This was primarily due to a net loss of **$43.2 million** and a **$14.2 million** net loss from the partial exchange of **2025 Notes**, partially offset by non-cash adjustments and stock-based compensation[192](index=192&type=chunk)[194](index=194&type=chunk) [Net cash provided by investing activities](index=63&type=section&id=Net%20cash%20provided%20by%20investing%20activities) This section outlines cash flows related to the purchase and sale of long-term assets and investments - Net cash provided by investing activities significantly increased to **$53.5 million** for the nine months ended September 30, 2023, from **$19.5 million** in the prior year. This was mainly driven by **$122.2 million** in proceeds from the sale and maturity of marketable securities, exceeding **$68.5 million** in purchases[195](index=195&type=chunk)[196](index=196&type=chunk) [Net cash provided by financing activities](index=63&type=section&id=Net%20cash%20provided%20by%20financing%20activities) This section describes cash flows from debt, equity, and dividend transactions with investors and creditors - Net cash provided by financing activities was **$21.5 million** for the nine months ended September 30, 2023, down from **$31.4 million** in the prior year. Key inflows included **$7.4 million** from common stock issuance, **$14.7 million** from **PHC Warrants**, and **$24.5 million** from the **Loan** and **Security Agreement**. Outflows included **$15.7 million** for **2023 Notes** repayment and **$7.5 million** for partial **2025 Notes** repayment[197](index=197&type=chunk)[198](index=198&type=chunk) [Contractual Obligations](index=63&type=section&id=Contractual%20Obligations) This section summarizes the company's commitments under various contracts and agreements - As of September 30, 2023, there were no material changes in contractual obligations and commitments from those disclosed in the Annual Report on Form **10-K** filed on March 16, 2023[199](index=199&type=chunk) [ITEM 3: Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=ITEM%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Senseonics Holdings, Inc. is not required to provide quantitative and qualitative disclosures about market risk in this Quarterly Report on Form 10-Q - The company is exempt from providing quantitative and qualitative disclosures about market risk in this Form **10-Q** due to its status as a 'smaller reporting company'[201](index=201&type=chunk) [ITEM 4: Controls and Procedures](index=64&type=section&id=ITEM%204%3A%20Controls%20and%20Procedures) This section details the management's evaluation of the effectiveness of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting during the quarter ended September 30, 2023 [Evaluation of Disclosure Controls and Procedures](index=64&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section assesses the effectiveness of the company's controls for ensuring timely and accurate financial disclosures - Management, with the assistance of the **CEO** and **CFO**, concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2023[202](index=202&type=chunk) [Changes in Internal Control over Financial Reporting](index=64&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports any material changes to the company's internal controls during the reporting period - There were no changes in internal control over financial reporting during the quarter ended September 30, 2023, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[203](index=203&type=chunk) [PART II: Other Information](index=65&type=section&id=PART%20II%3A%20Other%20Information) This section includes additional disclosures not covered in the financial statements, such as legal matters and risk factors [ITEM 1: Legal Proceedings](index=65&type=section&id=ITEM%201%3A%20Legal%20Proceedings) This section outlines the legal proceedings the company is involved in, specifically detailing a False Claims Act lawsuit and its current status - The company is subject to a civil complaint filed under the federal **False Claims Act** and **Texas Medicaid Fraud Prevention Law**, alleging violations related to marketing practices for its Eversense **CGM** system. The court dismissed the amended complaint in March 2023, and the relator filed an appeal to the **Fifth Circuit**, which is currently awaiting a decision[206](index=206&type=chunk)[207](index=207&type=chunk) [ITEM 1A: Risk Factors](index=65&type=section&id=ITEM%201A%3A%20Risk%20Factors) This section updates the risk factors, specifically addressing the potential dilution and stock price decline resulting from recent exchange agreements involving the company's 2025 Notes - Recent exchange agreements for **$30.8 million** of **2025 Notes**, which resulted in the issuance of **35.1 million** common shares, will cause additional dilution to common stockholders. The immediate resale eligibility of these shares could increase market supply and potentially cause the stock price to decline[209](index=209&type=chunk) [ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=ITEM%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the unregistered sales of equity securities, specifically the issuance of common stock in exchange for 2025 Notes, and confirms the exemption under the Securities Act of 1933 - On August 10, 2023, the company exchanged up to **$30.8 million** in **2025 Notes** for **$7.5 million** cash and **35.1 million** newly issued common shares. These shares were offered and sold under the exemption provided by Section **4(a)(2)** of the **Securities Act of 1933**, as a transaction not involving a public offering[210](index=210&type=chunk)[212](index=212&type=chunk) [ITEM 3: Defaults Upon Senior Securities](index=67&type=section&id=ITEM%203%3A%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - This item is not applicable[213](index=213&type=chunk) [ITEM 4: Mine Safety Disclosures](index=67&type=section&id=ITEM%204%3A%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - This item is not applicable[214](index=214&type=chunk) [ITEM 5: Other Information](index=67&type=section&id=ITEM%205%3A%20Other%20Information) This item is not applicable to the company for the reporting period - This item is not applicable[215](index=215&type=chunk) [ITEM 6: Exhibits](index=67&type=section&id=ITEM%206%3A%20Exhibits) This section lists all exhibits filed or incorporated by reference as part of this Quarterly Report on Form 10-Q, including organizational documents, agreements, and certifications - The exhibits include various corporate documents such as the Amended and Restated Certificate of Incorporation, Bylaws, and Certificates of Designation for preferred stock. Key agreements listed are the Form of Exchange Agreement (August 10, 2023), Loan and Security Agreement (September 8, 2023), and Form of Warrant Agreement[216](index=216&type=chunk)[217](index=217&type=chunk) - Certifications by the Principal Executive Officer and Principal Financial Officer under Sections **302** and **906** of the **Sarbanes-Oxley Act** are also included[217](index=217&type=chunk)[219](index=219&type=chunk) [SIGNATURES](index=69&type=section&id=SIGNATURES) This section contains the required signatures, confirming the due authorization and filing of the report - The report is signed by Rick Sullivan, Chief Financial Officer (Principal Financial Officer), on behalf of Senseonics Holdings, Inc., dated November 9, 2023[223](index=223&type=chunk)[224](index=224&type=chunk)

Financial Data and Key Metrics Changes - In Q2 2023, total revenue was $4.1 million, an 11% increase compared to the prior year period, with U.S. revenue at $1.8 million and international revenue at $2.3 million [7][26] - Operating loss for Q2 2023 was $19.9 million, compared to $17 million in Q2 2022, primarily due to increased R&D investments [29] - Net loss for Q2 2023 was $20.4 million or $0.04 loss per share, compared to a net income of $104.2 million or $0.22 gain per share in Q2 2022 [29] - Gross profit in Q2 2023 was $0.4 million, a decrease from $0.8 million in the prior year period, driven by an increase in revenue share percentage due to Ascensia [37] Business Line Data and Key Metrics Changes - Over 12% of total insertions in Q2 2023 were completed by MPG, more than double the prior quarter, with Eversense insertions in over 30 cities [9] - The dedicated salesforce is planned to increase to 50 professionals, currently at about 45 reps [8] Market Data and Key Metrics Changes - UnitedHealthcare began covering Eversense as of July 1, adding 45 million lives to the coverage population [5][18] - The company is seeing attractive growth in Italy, its second-largest European market, while addressing reimbursement issues in Germany [10] Company Strategy and Development Direction - The company is focused on increasing awareness and access to Eversense through enhanced branding and consumer-facing materials [3] - A pivotal trial for a 365-day sensor is nearing completion, with expectations for positive results to transform diabetes management [24] - The company aims to extend the wear time of Eversense to one year and has submitted for iCGM designation to integrate with insulin delivery devices [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a significant ramp in U.S. growth in the second half of the year, driven by additional sales reps and new coverage from UnitedHealthcare [50] - The company reiterated its full-year 2023 global net revenue guidance to be in the range of $20 million to $24 million, reflecting expected patient growth [42] Other Important Information - Research and development expenses in Q2 2023 were $12.8 million, an increase of $3.5 million compared to the prior year, due to investments in product pipeline and clinical trials [28] - The company entered into exchange agreements to reduce outstanding indebtedness to approximately $20.4 million, providing additional financial flexibility [30][31] Q&A Session Summary Question: Was there any outsized Ascensia destocking domestically? - Management indicated that Ascensia was optimizing their stocking levels as anticipated, and a significant ramp is expected in the second half of the year [49] Question: What gives confidence in the full-year guidance reiteration? - Confidence is based on expected U.S. growth driven by additional sales reps and new coverage from UnitedHealthcare [50] Question: What percent of new users are taking advantage of the patient assistance program? - Less than 50% were utilizing the patient assistance program in the first half of the year, with expectations for a decrease following UnitedHealthcare coverage [57] Question: What is the current mix of inserters between endocrinology and non-endocrinology? - The majority of inserters are still endocrinology, but the non-endocrinology segment is growing rapidly [60] Question: Will the 365-day data be press released? - Management indicated it is not advisable to press release data before it is peer-reviewed and submitted to the FDA [61] Question: What is the impact of GLP-1s on the business? - No impact has been observed to date, and management does not foresee any significant effect on market opportunities in the near term [63]

```markdown [PART I: Financial Information](index=2&type=section&id=PART%20I%3A%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial information [ITEM 1: Financial Statements](index=3&type=section&id=ITEM%201%3A%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the Balance Sheets, Statements of Operations and Comprehensive Income (Loss), Statements of Changes in Stockholders' Equity (Deficit), and Statements of Cash Flows, along with detailed notes explaining the company's financial position, performance, and significant accounting policies for the periods ended June 30, 2023, and December 31, 2022 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2023 (Unaudited) | December 31, 2022 | | :-------------------------------- | :------------------------ | :------------------ | | **Assets** | | | | Cash and cash equivalents | $28,551 | $35,793 | | Short term investments, net | $89,067 | $108,222 | | Total current assets | $138,229 | $161,200 | | Total assets | $153,362 | $177,673 | | **Liabilities and Stockholders' Equity (Deficit)** | | | | Total current liabilities | $15,861 | $31,471 | | Long-term debt and notes payables, net | $39,108 | $56,383 | | Derivative liabilities | $1,792 | $52,050 | | Total liabilities | $63,169 | $142,593 | | Total stockholders' equity (deficit) | $52,537 | $(2,576) | | Total liabilities and stockholders' equity | $153,362 | $177,673 | - **Total assets decreased by** **$24.3 million** from **$177.7 million** at December 31, 2022, to **$153.4 million** at June 30, 2023, **primarily due to** decreases in cash, cash equivalents, and short-term investments[8](index=8&type=chunk) - **Total liabilities significantly decreased by** **$79.4 million** from **$142.6 million** at December 31, 2022, to **$63.2 million** at June 30, 2023, **largely driven by** reductions in derivative liabilities and long-term debt[8](index=8&type=chunk) - **Stockholders' equity shifted from** a deficit of **$(2.6) million** at December 31, 2022, to a **positive equity** of **$52.5 million** at June 30, 2023[8](index=8&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section presents the company's financial performance, including revenue, expenses, and net income or loss Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except per share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $4,126 | $3,714 | $8,263 | $6,196 | | Cost of sales | $3,709 | $2,890 | $7,433 | $4,845 | | Gross profit | $417 | $824 | $830 | $1,351 | | Research and development expenses | $12,830 | $9,299 | $25,235 | $17,103 | | Selling, general and administrative expenses | $7,455 | $8,561 | $15,173 | $16,445 | | Operating loss | $(19,868) | $(17,036) | $(39,578) | $(32,197) | | Total other (expense) income, net | $(555) | $121,267 | $20,479 | $223,146 | | Net (Loss) Income | $(20,423) | $104,231 | $(19,099) | $190,949 | | Basic net (loss) income per common share | $(0.04) | $0.22 | $(0.04) | $0.42 | | Diluted net loss per common share | $(0.04) | $(0.03) | $(0.04) | $(0.06) | - **Total revenue increased by** **$0.4 million** (**11.1%**) for the three months ended June 30, 2023, and by **$2.1 million** (**33.4%**) for the six months ended June 30, 2023, **primarily due to the launch of Eversense E3 outside the United States**[11](index=11&type=chunk)[142](index=142&type=chunk)[149](index=149&type=chunk) - **Gross profit decreased by** **$0.4 million** (**49.4%**) for the three months and **$0.5 million** (**38.6%**) for the six months ended June 30, 2023, with **gross margin falling to 10.1% and 10.0% respectively**, mainly due to increased revenue share percentage to Ascensia, sales channel mix, and higher manufacturing/logistics costs[11](index=11&type=chunk)[143](index=143&type=chunk)[150](index=150&type=chunk) - The company reported a **net loss of** **$(20.4) million** for the three months and **$(19.1) million** for the six months ended June 30, 2023, a **significant decrease** from net income in the prior year periods, **largely due to** changes in fair value adjustments of options and derivatives[11](index=11&type=chunk)[147](index=147&type=chunk)[153](index=153&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20(Deficit)) This section outlines changes in the company's equity, reflecting transactions affecting capital and retained earnings - **Total stockholders' equity (deficit) improved from** **$(2.6) million** at December 31, 2022, to **$52.5 million** at June 30, 2023[13](index=13&type=chunk) - **Key drivers for the change in equity include issuance of common stock** (net of costs) for **$7.4 million**, **issuance of warrants** (net of costs) for **$63.3 million**, and **stock-based compensation expense** of **$4.7 million** for the six months ended June 30, 2023[13](index=13&type=chunk) - The company recorded a **net loss of** **$(19.1) million** for the six months ended June 30, 2023, which **reduced accumulated deficit**[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes cash inflows and outflows from operating, investing, and financing activities Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(37,832) | $(34,341) | | Net cash provided by investing activities | $25,871 | $42,108 | | Net cash provided by financing activities | $4,719 | $4,197 | | Net (decrease) increase in cash and cash equivalents | $(7,242) | $11,964 | | Cash and cash equivalents, at ending of period | $28,551 | $45,425 | - **Net cash used in operating activities increased to** **$(37.8) million** for the six months ended June 30, 2023, from **$(34.3) million** in the prior year, driven by a **net loss** and changes in operating assets and liabilities, partially offset by non-cash adjustments[14](index=14&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - **Net cash provided by investing activities decreased to** **$25.9 million** in 2023 from **$42.1 million** in 2022, **primarily due to a higher volume of marketable securities purchases** in the current period[14](index=14&type=chunk)[179](index=179&type=chunk) - **Net cash provided by financing activities remained relatively stable at** **$4.7 million** in 2023, compared to **$4.2 million** in 2022, with **proceeds from common stock and warrant issuances offsetting debt repayments**[14](index=14&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Organization and Nature of Operations](index=8&type=section&id=1.%20Organization%20and%20Nature%20of%20Operations) This section describes the company's business, its primary activities, and its organizational structure - **Senseonics Holdings, Inc. is a medical technology company focused on developing and manufacturing long-term, implantable continuous glucose monitoring (CGM) systems for diabetes management**[15](index=15&type=chunk) [2. Liquidity and Capital Resources](index=8&type=section&id=2.%20Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet short-term and long-term obligations and its sources of funding - The Company has **incurred substantial losses and cumulative negative cash flows from operations** since its inception and **expects additional losses in the near future**[17](index=17&type=chunk) - As of June 30, 2023, the Company had **cash, cash equivalents, and marketable securities totaling** **$125.1 million**[17](index=17&type=chunk) - **Subsequent to June 30, 2023, the Company entered into exchange agreements for up to $30.8 million of 2025 Notes for cash and common stock, and a new 'at the market' offering program with Goldman Sachs for up to $106.6 million in common stock**[18](index=18&type=chunk)[19](index=19&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [3. Summary of Significant Accounting Policies](index=12&type=section&id=3.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the key accounting principles and methods used in preparing the financial statements - The **unaudited consolidated financial statements are prepared in accordance with U.S. GAAP** for interim financial information, with certain disclosures condensed or omitted as permitted by SEC rules[28](index=28&type=chunk) - The Company operates and manages its business as a **single segment: glucose monitoring products**[29](index=29&type=chunk) - The adoption of ASU 2016-13 (Credit Losses) as of January 1, 2023, **did not have a material impact** on the consolidated financial statements[30](index=30&type=chunk) [4. Revenue Recognition](index=14&type=section&id=4.%20Revenue%20Recognition) This section details how and when the company recognizes revenue from its various sales channels and products - **Revenue is generated from sales** of the Eversense system and components to Ascensia, third-party distributors, and strategic fulfillment partners, **recognized when customers obtain control** of the product[34](index=34&type=chunk) Revenue by Geographic Region (in thousands) | Geographic Region | Three Months Ended June 30, 2023 | % of Total (3M 2023) | Six Months Ended June 30, 2023 | % of Total (6M 2023) | | :------------------ | :------------------------------- | :------------------- | :----------------------------- | :------------------- | | United States | $1,793 | 43.5% | $3,955 | 47.9% | | Outside of the US | $2,333 | 56.5% | $4,308 | 52.1% | | **Total** | **$4,126** | **100.0%** | **$8,263** | **100.0%** | | | Three Months Ended June 30, 2022 | % of Total (3M 2022) | Six Months Ended June 30, 2022 | % of Total (6M 2022) | | United States | $1,207 | 32.5% | $1,974 | 31.9% | | Outside of the US | $2,507 | 67.5% | $4,222 | 68.1% | | **Total** | **$3,714** | **100.0%** | **$6,196** | **100.0%** | - Ascensia **accounted for** **89%** and **91%** of total revenue for the three and six months ended June 30, 2023, respectively, indicating **high customer concentration**[37](index=37&type=chunk) [5. Net Income (Loss) per Share](index=15&type=section&id=5.%20Net%20Income%20(Loss)%20per%20Share) This section presents the calculation and impact of net income or loss on a per-share basis for common stockholders - **Basic net loss per common share was** **$(0.04)** for both the three and six months ended June 30, 2023[11](index=11&type=chunk)[42](index=42&type=chunk) - **Diluted net loss per common share was also** **$(0.04)** for both periods ended June 30, 2023, as **all potentially dilutive common shares were excluded due to the net loss making their effect anti-dilutive**[11](index=11&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk) - The calculation of basic EPS for June 30, 2023, **included 83,951,061 shares from the Exchange Warrant and Purchase Warrant held by PHC, treated as outstanding due to their 'penny warrant' nature**[38](index=38&type=chunk) [6. Marketable Securities](index=17&type=section&id=6.%20Marketable%20Securities) This section provides details on the company's short-term investments, including their composition and fair value Marketable Securities Available for Sale (in thousands) | Type | June 30, 2023 (Estimated Market Value) | December 31, 2022 (Estimated Market Value) | | :-------------------------- | :------------------------------------- | :--------------------------------------- | | Commercial Paper | $43,242 | $41,503 | | Corporate debt securities | $11,836 | $32,142 | | Asset backed securities | $7,453 | $8,260 | | Government and agency securities | $33,989 | $38,570 | | **Total** | **$96,520** | **$120,475** | - **Total marketable securities decreased** from **$120.5 million** at December 31, 2022, to **$96.5 million** at June 30, 2023[43](index=43&type=chunk) - **Unrealized losses on available-for-sale securities** at June 30, 2023, were **not significant and primarily attributed to changes in interest rates, not increased credit risk**[43](index=43&type=chunk) [7. Inventory, net](index=18&type=section&id=7.%20Inventory%2C%20net) This section details the composition and valuation of the company's inventory, including finished goods and raw materials Inventory, net (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :--------------- | :------------ | :---------------- | | Finished goods | $2,379 | $1,697 | | Work-in-process | $5,408 | $4,057 | | Raw materials | $1,407 | $1,552 | | **Total** | **$9,194** | **$7,306** | - **Total inventory, net, increased by** **$1.9 million** from **$7.3 million** at December 31, 2022, to **$9.2 million** at June 30, 2023, primarily in finished goods and work-in-process[45](index=45&type=chunk) - The Company **charged less than $0.1 million to cost of sales for inventory obsolescence** for the three and six months ended June 30, 2023, a decrease from **$0.6 million** in the prior year period[45](index=45&type=chunk) [8. Prepaid Expenses and Other Current Assets](index=18&type=section&id=8.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This section outlines the company's short-term assets that represent future economic benefits Prepaid Expenses and Other Current Assets (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :-------------------------------- | :------------ | :---------------- | | Contract manufacturing | $4,026 | $4,097 | | Tax credits receivable | $1,793 | — | | Insurance | $625 | $1,243 | | Unsettled stock issuance proceeds | $369 | — | | Clinical and Preclinical | $255 | $924 | | Interest receivable | $241 | $336 | | Rent and utilities | $150 | $132 | | Accounting and Audit | $48 | $270 | | Other | $235 | $426 | | **Total** | **$7,742** | **$7,428** | - **Total prepaid expenses and other current assets increased by** **$0.3 million** to **$7.7 million** at June 30, 2023, **primarily due to the recognition of $1.8 million in refundable employee retention tax credits**[46](index=46&type=chunk)[47](index=47&type=chunk) [9. Accrued Expenses and Other Current Liabilities](index=18&type=section&id=9.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This section details the company's short-term obligations for expenses incurred but not yet paid Accrued Expenses and Other Current Liabilities (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :-------------------------------- | :------------ | :---------------- | | Research and development | $5,367 | $3,502 | | Compensation and benefits | $2,558 | $4,699 | | Professional and administration services | $2,381 | $1,053 | | Contract manufacturing | $2,105 | $2,480 | | Interest on notes payable | $1,232 | $2,050 | | Product warranty and replacement obligations | $494 | $781 | | Operating lease | $483 | $725 | | Sales and marketing services | $266 | $149 | | Other | — | $14 | | **Total** | **$14,886** | **$15,453** | - **Total accrued expenses and other current liabilities decreased by** **$0.6 million** to **$14.9 million** at June 30, 2023, **primarily due to decreases in compensation and benefits and interest on notes payable, partially offset by an increase in research and development accruals**[48](index=48&type=chunk) [10. Leases](index=19&type=section&id=10.%20Leases) This section describes the company's lease agreements, including right-of-use assets and lease liabilities - The Company **amended its operating lease for corporate headquarters** in May 2023, **extending the term through May 31, 2033, and increasing the ROU asset by $2.5 million and lease liability by $3.8 million**[49](index=49&type=chunk) Operating Lease Assets and Liabilities (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :-------------------------- | :------------ | :---------------- | | Operating lease ROU assets | $5,340 | $3,032 | | Tenant improvement allowance receivable | $1,312 | — | | Current operating lease liabilities | $483 | $725 | | Non-current operating lease liabilities | $6,408 | $2,689 | | **Total operating lease liabilities** | **$6,891** | **$3,414** | - **Operating lease expense for the six months ended June 30, 2023, was $0.4 million, an increase from $0.3 million in the prior year**[50](index=50&type=chunk) [11. Product Warranty Obligations](index=20&type=section&id=11.%20Product%20Warranty%20Obligations) This section details the company's liabilities related to product warranties and replacement commitments - The Company **provides a one-year warranty on smart transmitters and may replace non-functioning Eversense system components**[51](index=51&type=chunk) Change in Estimated Warranty Liabilities (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :-------------------------------- | :------------ | :---------------- | | Balance at beginning of the period | $781 | $723 | | Provision for warranties during the period | $62 | $166 | | Settlements made during the period | $(349) | $(108) | | **Balance at end of the period** | **$494** | **$781** | - The **warranty reserve decreased** from **$0.8 million** at December 31, 2022, to **$0.5 million** at June 30, 2023, **primarily due to settlements made during the period**[52](index=52&type=chunk) [12. Notes Payable, Preferred Stock and Stock Purchase Warrants](index=20&type=section&id=12.%20Notes%20Payable%2C%20Preferred%20Stock%20and%20Stock%20Purchase%20Warrants) This section provides details on the company's debt instruments, preferred stock, and outstanding warrants [Term Loans](index=20&type=section&id=Term%20Loans) This section details the company's term loan obligations and their repayment status - The **PPP Loan of $5.8 million, received in April 2020, was fully repaid in April 2022**[53](index=53&type=chunk)[54](index=54&type=chunk) [Convertible Preferred Stock and Warrants](index=20&type=section&id=Convertible%20Preferred%20Stock%20and%20Warrants) This section describes the company's convertible preferred stock and equity warrants, including their issuance and impact - **Energy Capital exercised its right to purchase $12.0 million of Series B Preferred Stock in November 2022, with the excess of purchase price and fair value of the option ($37.6 million) recorded as additional paid-in-capital**[23](index=23&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - In March 2023, the Company **issued a Purchase Warrant to PHC for 15,425,750 common shares, generating $15.0 million in gross proceeds, classified as equity**[25](index=25&type=chunk)[27](index=27&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) - Also in March 2023, **PHC exchanged its $35.0 million PHC Notes for an Exchange Warrant to purchase 68,525,311 common shares, resulting in a net gain on exchange of $18.8 million**[24](index=24&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[78](index=78&type=chunk) [Convertible Notes](index=24&type=section&id=Convertible%20Notes) This section details the company's convertible debt instruments, their terms, and related financial impacts - The **PHC Notes, with an aggregate principal of $35.0 million, were exchanged for an Exchange Warrant in March 2023, extinguishing the debt and resulting in an $18.8 million net gain on exchange**[24](index=24&type=chunk)[76](index=76&type=chunk)[78](index=78&type=chunk) - The **2025 Notes had an aggregate principal of $51.2 million outstanding as of June 30, 2023, with an embedded conversion option classified as a derivative liability**[80](index=80&type=chunk)[87](index=87&type=chunk) - The **2023 Notes, with an aggregate principal of $15.7 million, were fully repaid on January 31, 2023, resulting in an extinguishment gain of $0.02 million**[86](index=86&type=chunk)[87](index=87&type=chunk) Interest Expense Related to Notes Payable (in thousands) | Note Type | Six Months Ended June 30, 2023 (Total Interest Expense) | Six Months Ended June 30, 2022 (Total Interest Expense) | | :---------- | :-------------------------------------- | :-------------------------------------- | | 2023 Notes | $189 | $1,085 | | 2025 Notes | $4,543 | $3,999 | | PHC Notes | $2,230 | $3,914 | | PPP Loan | — | $6 | | **Total** | **$6,962** | **$9,005** | [13. Stockholders' Equity (Deficit)](index=29&type=section&id=13.%20Stockholders%27%20Equity%20(Deficit)) This section outlines the components of stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit - During the six months ended June 30, 2023, the Company **received $7.4 million in net proceeds from the sale of 9,944,663 common shares under the 2021 Sales Agreement with Jefferies**[89](index=89&type=chunk) [14. Stock-Based Compensation](index=29&type=section&id=14.%20Stock-Based%20Compensation) This section details the company's equity incentive plans and the accounting for stock-based compensation expenses - As of June 30, 2023, **28,775,002 shares remained available for grant under the Amended and Restated 2015 Equity Incentive Plan**[91](index=91&type=chunk) - The Company **adopted the 2023 Commercial Equity Plan, reserving 10,000,000 shares for non-employees, including Ascensia employees, with 7,475,000 shares remaining available as of June 30, 2023**[93](index=93&type=chunk) - The **2016 Employee Stock Purchase Plan (ESPP) had 17,760,078 shares available for issuance as of June 30, 2023, with 86,816 shares purchased during the six months ended June 30, 2023**[94](index=94&type=chunk) [15. Fair Value Measurements](index=33&type=section&id=15.%20Fair%20Value%20Measurements) This section describes the valuation methods and hierarchy used for financial assets and liabilities measured at fair value Fair Value Hierarchy of Financial Assets and Liabilities (in thousands) | Category | June 30, 2023 (Total) | December 31, 2022 (Total) | | :-------------------------------- | :-------------------- | :---------------------- | | **Assets** | | | | Money market funds | $25,007 | $34,658 | | Commercial paper | $43,242 | $41,503 | | Corporate debt securities | $11,836 | $32,142 | | Asset backed securities | $7,453 | $8,260 | | Government and agency securities | $33,989 | $38,570 | | **Liabilities** | | | | Embedded features of the 2025 Notes | $1,792 | $7,859 | | Embedded features of the 2023 Notes | — | $20 | | Embedded features of the PHC Notes | — | $44,191 | - **Level 3 liabilities, primarily embedded features of convertible notes, decreased significantly from $52.1 million at December 31, 2022, to $1.8 million at June 30, 2023, mainly due to gains on changes in fair value of PHC Notes and 2025 Notes embedded features**[100](index=100&type=chunk) [16. Income Taxes](index=34&type=section&id=16.%20Income%20Taxes) This section outlines the company's income tax position, including deferred tax assets and liabilities, and valuation allowances - The Company has **not recorded any tax provision or benefit** for the six months ended June 30, 2023 or 2022[102](index=102&type=chunk) - A **full valuation allowance has been provided for net deferred tax assets, as realization of future benefits is not considered more-likely-than-not**[102](index=102&type=chunk) [17. Related Party Transactions](index=34&type=section&id=17.%20Related%20Party%20Transactions) This section discloses transactions and relationships with parties that have the ability to influence the company's operations - **PHC has a noncontrolling ownership interest and board representation in the Company, and Ascensia (PHC's parent company) is a related party**[103](index=103&type=chunk) - **Revenue from Ascensia was $7.5 million for the six months ended June 30, 2023, compared to $5.7 million in the prior year**[103](index=103&type=chunk) - **Amounts due from Ascensia were $3.0 million at June 30, 2023, and amounts due to Ascensia were $0.6 million**[104](index=104&type=chunk) [18. Subsequent Events](index=34&type=section&id=18.%20Subsequent%20Events) This section reports significant events that occurred after the balance sheet date but before the financial statements were issued - On August 10, 2023, the Company **entered into exchange agreements to exchange up to $30.8 million of 2025 Notes for $7.5 million cash and newly issued common stock, expected to close around September 5, 2023**[106](index=106&type=chunk)[107](index=107&type=chunk) - The Company **terminated its 'at the market' offering program with Jefferies on August 7, 2023, with $106.6 million remaining available**[108](index=108&type=chunk) - A **new 'at the market' offering program was established with Goldman Sachs on August 10, 2023, for up to $106.6 million in common stock, pending SEC registration statement effectiveness**[109](index=109&type=chunk)[110](index=110&type=chunk) [ITEM 2: Management Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=ITEM%202%3A%20Management%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, including an overview of its business, product development and commercialization efforts, detailed analysis of revenue, cost of sales, operating expenses, and other income/expense for the three and six months ended June 30, 2023 and 2022, and a discussion of liquidity and capital resources [Overview](index=37&type=section&id=Overview) This section provides a general description of the company's business, products, and strategic initiatives - **Senseonics is a medical technology company focused on long-term implantable continuous glucose monitoring (CGM) systems, including Eversense, Eversense XL, and Eversense E3, offering up to six months of glucose monitoring**[114](index=114&type=chunk) - The **Eversense E3 CGM system received FDA approval in February 2022 and CE mark in June 2022, with commercialization by Ascensia in the US and Europe**[114](index=114&type=chunk)[127](index=127&type=chunk)[132](index=132&type=chunk) - The **ENHANCE pivotal study for the Eversense 365-day system completed enrollment in Q3 2022, with data expected in H2 2023, and pediatric patient enrollment began in Q2 2023**[118](index=118&type=chunk)[128](index=128&type=chunk) - The Company has **achieved approximately 300 million covered lives in the United States through positive insurance payor coverage decisions, including UnitedHealthcare effective July 1, 2023**[117](index=117&type=chunk) [United States Development and Commercialization of Eversense](index=39&type=section&id=United%20States%20Development%20and%20Commercialization%20of%20Eversense) This section details the development and commercialization efforts for the Eversense system in the United States - The **90-day Eversense CGM system received FDA PMA approval in June 2018 and non-adjunctive indication (dosing claim) approval in June 2019, allowing it to replace fingerstick blood glucose measurements**[120](index=120&type=chunk)[122](index=122&type=chunk) - The **180-day extended life Eversense E3 CGM system was approved by the FDA in February 2022 and commercialized by Ascensia in the US during Q2 2022**[114](index=114&type=chunk)[127](index=127&type=chunk) - The **ENHANCE clinical study, evaluating the Eversense 365 System, completed enrollment in September 2022 and began enrolling pediatric patients in Q2 2023**[128](index=128&type=chunk) [European Commercialization of Eversense](index=41&type=section&id=European%20Commercialization%20of%20Eversense) This section outlines the commercialization strategy and progress for the Eversense system in European markets - The **Eversense XL, with a 180-day sensor life, received CE mark in September 2017 and began commercialization in Europe in Q4 2017**[129](index=129&type=chunk) - The **Eversense E3 CGM system received CE mark in June 2022, with Ascensia commencing commercialization in European markets in the second half of 2022**[132](index=132&type=chunk) - The **Company's distribution agreement with Roche concluded on January 31, 2021, transitioning distribution to Ascensia**[130](index=130&type=chunk) [Financial Overview](index=43&type=section&id=Financial%20Overview) This section provides a summary of the company's financial performance and key financial metrics - **Revenue is primarily generated from sales of Eversense systems to Ascensia and other distributors, recognized upon transfer of control, with variable consideration like revenue share treated as an addition to revenue**[133](index=133&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk) - **Ascensia remains the primary customer, contributing 89% and 91% of total revenue for the three and six months ended June 30, 2023, respectively**[138](index=138&type=chunk) Revenue by Geographic Region (in thousands) | Geographic Region | Three Months Ended June 30, 2023 | % of Total (3M 2023) | Six Months Ended June 30, 2023 | % of Total (6M 2023) | | :------------------ | :------------------------------- | :------------------- | :----------------------------- | :------------------- | | United States | $1,793 | 43.5% | $3,955 | 47.9% | | Outside of the US | $2,333 | 56.5% | $4,308 | 52.1% | | **Total** | **$4,126** | **100.0%** | **$8,263** | **100.0%** | | | Three Months Ended June 30, 2022 | % of Total (3M 2022) | Six Months Ended June 30, 2022 | % of Total (6M 2022) | | United States | $1,207 | 32.5% | $1,974 | 31.9% | | Outside of the US | $2,507 | 67.5% | $4,222 | 68.1% | | **Total** | **$3,714** | **100.0%** | **$6,196** | **100.0%** | [Results of Operations for the Three Months Ended June 30, 2023 and 2022](index=45&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202023%20and%202022) This section analyzes the company's financial results for the three-month periods ended June 30, 2023 and 2022 Key Financial Results (Three Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Period-to-Period Change | | :--------------------------------------- | :----- | :----- | :---------------------- | | Total revenue | $4,126 | $3,714 | $412 | | Gross profit | $417 | $824 | $(407) | | Research and development expenses | $12,830 | $9,299 | $3,531 | | Selling, general and administrative expenses | $7,455 | $8,561 | $(1,106) | | Operating loss | $(19,868) | $(17,036) | $(2,832) | | Total other income (expense), net | $(555) | $121,267 | $(121,822) | | Net (Loss) Income | $(20,423) | $104,231 | $(124,654) | - **Total revenue increased by** **$0.4 million**, **primarily driven by the launch of Eversense E3 outside the United States**[142](index=142&type=chunk) - **Gross profit decreased by** **$0.4 million**, with **gross margin falling from 22.2% to 10.1%**, due to increased revenue share to Ascensia, sales channel mix, and higher manufacturing/logistics costs[143](index=143&type=chunk) - **Research and development expenses increased by** **$3.5 million**, mainly due to **investments in next-generation technologies and clinical studies activities**[144](index=144&type=chunk) - **Selling, general and administrative expenses decreased by $1.1 million, primarily from reduced personnel spend and insurance premiums**[145](index=145&type=chunk)[146](index=146&type=chunk) - **Net loss was $(20.4) million, a significant decrease from net income of $104.2 million in the prior year, largely due to a $121.8 million decrease in total other income (expense), net, driven by changes in fair value adjustments of options and derivatives**[140](index=140&type=chunk)[147](index=147&type=chunk) [Results of Operations for the Six Months Ended June 30, 2023 and 2022](index=47&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202023%20and%202022) This section analyzes the company's financial results for the six-month periods ended June 30, 2023 and 2022 Key Financial Results (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | Period-to-Period Change | | :--------------------------------------- | :----- | :----- | :---------------------- | | Total revenue | $8,263 | $6,196 | $2,067 | | Gross profit | $830 | $1,351 | $(521) | | Research and development expenses | $25,235 | $17,103 | $8,132 | | Selling, general and administrative expenses | $15,173 | $16,445 | $(1,272) | | Operating loss | $(39,578) | $(32,197) | $(7,381) | | Total other (expense) income, net | $20,479 | $223,146 | $(202,667) | | Net (Loss) Income | $(19,099) | $190,949 | $(210,048) | - **Total revenue increased by** **$2.1 million**, **primarily due to the launch of Eversense E3 outside the United States**[149](index=149&type=chunk) - **Gross profit decreased by** **$0.5 million**, with **gross margin falling from 21.8% to 10.0%**, due to increased revenue share to Ascensia, sales channel mix, and higher manufacturing/logistics costs[150](index=150&type=chunk) - **Research and development expenses increased by** **$8.1 million**, driven by **investments in next-generation technologies, clinical studies, and personnel costs**[151](index=151&type=chunk) - **Selling, general and administrative expenses decreased by $1.3 million, mainly due to reductions in personnel costs, recruiting, and other general and administrative expenses**[152](index=152&type=chunk) - **Net loss was $(19.1) million, a significant decrease from net income of $190.9 million in the prior year, largely due to a $202.7 million decrease in total other income (expense), net, primarily from changes in fair value of derivatives and options, partially offset by a net gain on extinguishment of PHC notes**[148](index=148&type=chunk)[153](index=153&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, funding sources, and ability to meet its financial obligations - The Company has **historically incurred substantial losses and negative operating cash flows, funding operations through equity, warrants, convertible notes, and debt**[154](index=154&type=chunk) - As of June 30, 2023, **cash, cash equivalents, and marketable securities totaled $125.1 million**[154](index=154&type=chunk) - **Subsequent to the quarter, the Company initiated an exchange of up to $30.8 million of 2025 Notes for cash and common stock, and established a new 'at the market' offering program with Goldman Sachs for up to $106.6 million**[155](index=155&type=chunk)[158](index=158&type=chunk) - **Management believes existing cash, cash equivalents, and future operations cash flows will be sufficient to meet operating plans into 2025**[172](index=172&type=chunk) Summary of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2023 | 2022 | | :-------------------------------- | :------- | :------- | | Net cash used in operating activities | $(37,832) | $(34,341) | | Net cash provided by investing activities | $25,871 | $42,108 | | Net cash provided by financing activities | $4,719 | $4,197 | | Net (decrease) increase in cash and cash equivalents | $(7,242) | $11,964 | [ITEM 3: Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=ITEM%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Senseonics Holdings, Inc. is not required to provide quantitative and qualitative disclosures about market risk in this Quarterly Report on Form 10-Q - The Company is **exempt from providing detailed market risk disclosures due to its status as a 'smaller reporting company'**[183](index=183&type=chunk) [ITEM 4: Controls and Procedures](index=56&type=section&id=ITEM%204%3A%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting during the quarter ended June 30, 2023 [Evaluation of Disclosure Controls and Procedures](index=56&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section assesses the effectiveness of the company's disclosure controls and procedures - Management, with the assistance of the CEO and CFO, concluded that the Company's **disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2023**[184](index=184&type=chunk) [Changes in Internal Control over Financial Reporting](index=58&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting - There were **no changes in internal control over financial reporting during the quarter ended June 30, 2023, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting**[186](index=186&type=chunk) [PART II: Other Information](index=59&type=section&id=PART%20II%3A%20Other%20Information) This section provides additional information not covered in the financial statements [ITEM 1: Legal Proceedings](index=59&type=section&id=ITEM%201%3A%20Legal%20Proceedings) This section outlines the Company's involvement in legal proceedings, including a specific civil complaint under the federal False Claims Act, and generally states that the Company does not expect ordinary course matters to have a material adverse effect - The Company is **currently involved in an appeal to the United States Court of Appeals for the Fifth Circuit regarding a civil complaint alleging False Claims Act violations related to marketing practices, which was previously dismissed by the district court**[190](index=190&type=chunk) - **Management believes that the final outcome of ordinary course litigation and claims will not have a material adverse effect on the business**[189](index=189&type=chunk) [ITEM 1A: Risk Factors](index=59&type=section&id=ITEM%201A%3A%20Risk%20Factors) This section highlights specific risks that could adversely affect the Company's financial condition and stock price, particularly focusing on the potential dilution and market impact from recent exchange agreements involving the 2025 Notes - The **recent exchange agreements for 2025 Notes will result in additional dilution to common stockholders, as the number of shares issued will exceed those currently underlying the exchanged notes**[192](index=192&type=chunk) - The **immediate resale eligibility of newly issued shares could increase market supply and potentially cause the Company's stock price to decline**[192](index=192&type=chunk) - If the total amount of 2025 Notes repurchased is less than anticipated due to stock price declines, the Company may **not fully realize the expected benefits, including debt reduction and elimination of restrictive covenants**[192](index=192&type=chunk) [ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=ITEM%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for this quarterly report [ITEM 3: Defaults Upon Senior Securities](index=59&type=section&id=ITEM%203%3A%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for this quarterly report [ITEM 4: Mine Safety Disclosures](index=59&type=section&id=ITEM%204%3A%20Mine%20Safety%20Disclosures) This item is not applicable for this quarterly report [ITEM 5: Other Information](index=61&type=section&id=ITEM%205%3A%20Other%20Information) This section provides additional disclosures regarding significant events occurring after the reporting period, specifically detailing the 2025 Notes Exchange Agreements and the new 'at the market' offering program - On August 10, 2023, the Company **entered into exchange agreements to exchange up to $30.8 million in 2025 Notes for $7.5 million cash and newly issued common stock, with the number of shares determined by a 15-day volume-weighted average price, capped at 10% of outstanding common stock**[196](index=196&type=chunk) - The Company **terminated its previous 'at the market' offering program with Jefferies on August 7, 2023, with approximately $106.6 million remaining available**[199](index=199&type=chunk) - A **new 'at the market' offering program was established with Goldman Sachs on August 10, 2023, allowing the issuance and sale of common stock for up to $106.6 million, pending SEC registration statement effectiveness**[200](index=200&type=chunk)[201](index=201&type=chunk) [ITEM 6: Exhibits](index=62&type=section&id=ITEM%206%3A%20Exhibits) This section lists all exhibits filed or incorporated by reference as part of this Quarterly Report on Form 10-Q, including corporate governance documents, certifications, and XBRL data files - The **exhibits include corporate documents (e.g., Certificate of Incorporation, Bylaws), the Form of Exchange Agreement dated August 10, 2023, and certifications under the Sarbanes-Oxley Act**[202](index=202&type=chunk)[203](index=203&type=chunk) [SIGNATURES](index=63&type=section&id=SIGNATURES) This section contains the required signatures, certifying the filing of the Quarterly Report on Form 10-Q on behalf of Senseonics Holdings, Inc. by its Chief Financial Officer - The **report was signed by Rick Sullivan, Chief Financial Officer, on August 10, 2023**[207](index=207&type=chunk) ```

Senseonics Holdings, Inc. (NYSE:SENS) Q2 2023 Earnings Conference Call May 9, 2023 4:30 PM ET Company Participants Philip Taylor - IR Tim Goodnow - President and CEO Rick Sullivan - CFO Mukul Jain - COO Conference Call Participants Sam Eiber - BTIG Colin Clark - Stifel Operator Good day, and welcome to the Senseonics First Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Op ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number: 001-37717 Table of Contents Senseonics Holdings, Inc. (Exact name of registrant as specified in its charter) Delaware ...