Any statements in this presentation about future expectations, plans and prospects for Senseonics and its business, including statements regarding managements plans, objectives and goals for future operations (including preliminary targets for future financial performance and cash projections of Senseonics Holdings, Inc.), statements about the commercial launch of Eversense® E3, statements regarding increasing patient access, adoption and market share and the future growth of the CGM market, statement regar ...

Product Overview - The Eversense CGM system includes versions with a lifespan of 90 days, 180 days (Eversense E3), and is designed for continuous glucose monitoring, significantly longer than non-implantable systems which last 7 to 14 days[18]. - The Eversense CGM system became the first CGM technology reimbursed through the Part B Medical Services benefit for Medicare beneficiaries in November 2019[28]. - The Eversense CGM system is sold in two kits: the disposable Eversense Sensor Pack and the durable Eversense Smart Transmitter Pack[34]. - The Eversense E3 CGM system was commercialized in all EEA markets during Q3 and Q4 of 2022 following CE mark approval[22]. - The Eversense XL CGM system received CE mark in September 2017 and began commercialization in the U.S. in Q2 2022 after FDA PMA approval for Eversense E3[40]. - The mobile app provides real-time glucose readings and alerts, enhancing user experience and management of diabetes[57]. - The Eversense system offers advantages such as exceptional accuracy, longest sensor duration of up to six months, and continuous glucose monitoring capabilities[53]. Regulatory Approvals and Compliance - The FDA approved the Eversense E3 CGM system for marketing in the U.S. in February 2022, with commercialization beginning in the second quarter of 2022[22]. - The Eversense System is classified as a Class III medical device and requires pre-market approval (PMA) from the FDA[88]. - The company is subject to extensive regulation by the FDA, including compliance with quality system regulations and post-market surveillance requirements[90][91]. - Medical devices must comply with the General Safety and Performance Requirements (GSPRs) to obtain the CE mark, which is essential for marketing in the EEA[95]. - The Medical Device Regulation (MDR) entered into application on May 26, 2021, replacing previous directives and establishing new compliance requirements for medical devices[94]. - The FDA mandates Post Approval Studies and tracking systems for products, enforcing compliance through periodic inspections and market surveillance[99]. - Non-compliance with regulatory requirements can lead to severe penalties, including fines, product recalls, and potential criminal prosecution[102]. Market and Competition - The market for CGM systems is competitive, with significant players including Dexcom, Medtronic, and Abbott, all of which have received FDA approval for their systems[72]. - The company faces potential competition from various sources, including companies developing real-time intermittent sensing devices and non-invasive CGM systems[75]. - Competition in the CGM market is intense, with established players like Dexcom and Abbott having significant advantages, including FDA approvals and established market presence[178]. - The company anticipates increased competition from companies integrating CGM with insulin pumps, which could impact market share[179]. - The company operates in a highly competitive market for diabetes monitoring devices, facing risks from technological breakthroughs by competitors[144]. Financial Performance and Projections - The company incurred total net income (loss) of $142.1 million, ($302.5) million, and ($175.2) million for the years ended December 31, 2022, 2021, and 2020, respectively, with an accumulated deficit of $808.9 million as of December 31, 2022[145]. - The company has never been profitable in past years and does not expect to be profitable for at least the next several years, with future operating losses anticipated[146]. - The company expects that a substantial majority of future revenue will result from the Commercialization Agreement with Ascensia, which grants Ascensia exclusive rights to distribute Eversense worldwide[147]. - The company plans to derive nearly all revenue from Eversense sales in the U.S. and Europe for the next several years, making reimbursement from third-party payors essential for product acceptance[168]. - Significant sales generation is necessary for the company to achieve profitable operations, but there is uncertainty regarding the ability to do so[217]. - If sales growth is slower than expected or operating expenses exceed expectations, financial performance will be adversely affected[217]. Employee Engagement and Company Culture - As of December 31, 2022, the company had 121 full-time employees, with over half holding advanced degrees[130]. - The company emphasizes employee engagement and has implemented initiatives to strengthen connections between employees and the company's mission[131]. - The company has invested in new human resource software to collect weekly employee feedback and enhance engagement[131]. - The company has launched a new platform to improve employee health and safety training programs in 2022[132]. - The company recognizes the importance of diversity and collaboration in driving success[131]. - As of the end of 2022, the employee base comprised 40% female and 60% male, reflecting the company's commitment to diversity, equity, and inclusion[135]. Risks and Challenges - The company faces challenges in securing adequate reimbursement for Eversense, which could adversely affect its financial condition and operating results[168]. - The ongoing military action by Russia in Ukraine and surging energy costs in Europe pose risks to the company's operations and supply chain[144]. - The company is vulnerable to disruptions in its information technology systems, which could adversely affect its operations and financial results[201]. - The company acknowledges that economic downturns, inflation, and public health crises like COVID-19 could negatively impact its business and financial performance[213]. - The company may face challenges in integrating acquired products or technologies, which could adversely affect its business and financial condition[208]. - The company relies on third-party manufacturers for Eversense production, exposing it to risks related to quality, reliability, and production capacity[187]. Research and Development - The ENHANCE pivotal study for the Eversense 365-day system completed enrollment in Q3 2022, with data expected in the second half of 2023[19]. - Future product development aims to reduce calibration frequency to once per week and extend sensor duration to 365 days, targeting Type 2 diabetes patients[59]. - The company is exploring applications of its technology for measuring other analytes beyond glucose, indicating potential for future growth[59]. - The company intends to increase operating expenses for the commercialization of Eversense and ongoing R&D activities, including next-generation products[217]. Insurance and Reimbursement - Approximately 250 million people in the United States may have coverage and access to the Eversense E3 product via commercial or government payors[65]. - Some commercial payors have denied coverage for Eversense, labeling it as "experimental and investigational," which may limit patient access[66]. - The Health Technology Assessment (HTA) process in the EU may require additional studies for medical device candidates, influencing pricing and reimbursement decisions[173]. - The Eversense Bridge Program, launched in March 2019, provided financial assistance to uninsured patients but was terminated in December 2020, potentially affecting sales[175]. - Future coverage and reimbursement for Eversense products may face increased restrictions, impacting sales and profitability[172].

Financial Data and Key Metrics Changes - In Q3 2022, total revenue was $4.6 million, a 31% increase compared to $3.5 million in the prior year period [5][22] - Gross profit in Q3 2022 was $0.8 million, an increase of $2 million from a gross loss of $1.2 million in the prior year [23] - Net loss for Q3 2022 was $60.4 million, compared to a net income of $42.9 million in Q3 2021 [27][28] - Cash, cash equivalents, and short and long-term investments totaled $163 million as of September 30, 2022 [28] - The company narrowed its full year 2022 global net revenue guidance to $15 million to $17 million [29] Business Line Data and Key Metrics Changes - U.S. revenue for Q3 2022 was $1.9 million, while revenue outside the U.S. was $2.7 million [22] - The transition from the Eversense 90-day product to the Eversense six-month product contributed to the increase in gross profit [23] - The company reported a retention rate of 80% or higher for patients transitioning from the first to the second sensor, with long-term users seeing retention rates exceeding 90% [48] Market Data and Key Metrics Changes - Over half of the patients using Eversense have type 2 diabetes, indicating a growing market segment [7][36] - The partnership with the Nurse Practitioner Group aims to expand patient access to Eversense through both in-office and at-home sensor insertions [9][10] - Commercial coverage for Eversense is expanding, with significant health insurance providers issuing positive coverage decisions [11][12] Company Strategy and Development Direction - The company is focused on increasing patient adoption of Eversense through strategic partnerships and marketing efforts [6][13] - Future product development includes advancements in the Eversense 365-day sensor and the Gemini program, which aims to incorporate a battery into the sensor [16][17] - The company is working to improve manufacturing scale and margins while enhancing access to its products [31][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing expansion of covered lives and the potential impact of new product offerings [31] - The company anticipates continued investment in research and development, particularly for clinical trials related to next-generation technologies [45] - Management is optimistic about the long-term growth potential of the CGM market and the company's position within it [33] Other Important Information - The company has established a patient assistance program to help reduce costs for patients with insurance coverage [12] - The Eversense E3 system has been successfully launched across all markets in Europe, enhancing global distribution efficiency [14][15] Q&A Session Summary Question: How comfortable is the company with consensus for 2023 and the impact of the recent CMS proposal? - Management refrained from discussing 2023 specifics but expressed pride in the product's performance among type 2 diabetes patients [36] Question: How will the partnership with nurse practitioners help address basal patients? - The partnership is expected to facilitate referrals for patients whose primary care physicians do not perform insertions, leveraging existing CPT codes for reimbursement [37] Question: Any updates on the Gemini product development? - The company is working with experts in implantable batteries to develop a custom battery for the Eversense sensor, allowing for autonomous measurements [42][44] Question: How is the patient assistance program affecting adoption rates? - The program is showing good acceptance and utilization, particularly as deductibles reset in Q1 [48] Question: Is there increased interest from pump manufacturers now that the 180-day product is available? - There has been an uptick in interest from pump manufacturers, with ongoing conversations regarding integration [52]

Financial Data and Key Metrics Changes - In Q2 2022, total revenue was $3.7 million, an increase from $3.3 million in the prior year period [27] - U.S. revenue for Q2 was $1.2 million, while revenue outside the U.S. was $2.5 million [27] - Gross profit for Q2 2022 was $0.8 million, up from $0.4 million in the prior year [27] - Operating loss for Q2 2022 was $17 million, compared to a loss of $15.9 million in Q2 2021 [29] - Net income for Q2 2022 was $104.2 million, or $0.22 per share, compared to a net loss of $180.3 million, or $0.42 loss per share in Q2 2021 [31] Business Line Data and Key Metrics Changes - The successful commercial launch of the E3 system in the U.S. and the receipt of CE Mark for E3 in Europe were highlighted as significant achievements [9][21] - The transition to the 6-month E3 product has been completed for the current commercial base [12] - Ascensia's dedicated CGM team has been expanded to enhance sales coverage and patient awareness [13] Market Data and Key Metrics Changes - The company reported that Anthem, a major health insurance provider, is now covering the E3 system, increasing the total covered lives to approximately 250 million [18] - The transition of payer policies to cover the 6-month product is expected to continue, with most payers anticipated to complete the transition by the end of the year [16] Company Strategy and Development Direction - The company is focused on executing the E3 launch and advancing its technology pipeline, including the development of a 1-year CGM sensor [10][36] - There is a commitment to operational and manufacturing efficiency to support growth and patient adoption [10] - The company is also enhancing digital connectivity by allowing data sharing through Apple Health [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the unique features of the E3 system to meet patient needs and drive adoption [6] - The company anticipates continued growth in commercial investments and sales force expansion [41] - Management acknowledged macroeconomic challenges but indicated that they have been managing these dynamics effectively [55] Other Important Information - The company has made significant progress in establishing programs to improve patient access to the E3 system [19] - The E3 system will be launched in phases across Europe, with ongoing efforts to enhance market uptake [22] Q&A Session Summary Question: On Ascensia's investments and timing for acceleration - Management confirmed that Ascensia's commercial investment is significant and expected to ramp up as products are placed in the market [41] Question: Update on the 365-day system and sensor design - Management indicated that improvements are ongoing based on clinical experience, with plans to start clinical trials by the end of the year [42] Question: Confirmation of covered lives for the 180-day sensor - Management confirmed that approximately 250 million lives are now covered for the E3 system, with ongoing transitions expected to complete by year-end [47] Question: Inventory situation at Ascensia - Management stated that the plan is to maintain about six weeks of inventory, with revenue recognized at the point of shipment [48] Question: Update on the iCGM and filing timing - Management confirmed that additional clinical data collection is underway, with plans to file for iCGM in the first half of next year [54] Question: Impact of macro conditions on sales - Management acknowledged some impact from macro conditions but noted that revenue continues to grow based on market progress [56]

PART I: 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), Statements of Cash Flows, and accompanying notes, providing a detailed financial overview for the periods ended June 30, 2022, and December 31, 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets from **$198.9 million** at December 31, 2021, to **$175.3 million** at June 30, 2022, primarily due to a reduction in long-term investments and derivative liabilities. Total liabilities significantly decreased from **$384.5 million** to **$159.4 million**, while stockholders' equity shifted from a deficit of **$185.5 million** to a positive **$15.9 million** | Metric | Dec 31, 2021 (in thousands) | Jun 30, 2022 (in thousands) | Change (in thousands) | | :----------------------------- | :-------------------------- | :-------------------------- | :-------------------- | | Total Assets | $198,928 | $175,325 | $(23,603) | | Total Liabilities | $384,463 | $159,384 | $(225,079) | | Total Stockholders' Equity (Deficit) | $(185,535) | $15,941 | $201,476 | [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) For the three months ended June 30, 2022, the company reported a net income of **$104.2 million**, a significant improvement from a net loss of **$180.3 million** in the prior year, driven by substantial gains on fair value adjustments of options and derivatives. Total revenue increased slightly to **$3.7 million** from **$3.3 million**. For the six months ended June 30, 2022, net income was **$190.9 million**, compared to a net loss of **$429.8 million** in 2021, with total revenue remaining consistent at **$6.2 million** | Metric (in thousands) | 3 Months Ended Jun 30, 2022 | 3 Months Ended Jun 30, 2021 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | | Total Revenue | $3,714 | $3,289 | $425 | | Gross Profit | $824 | $392 | $432 | | Operating Loss | $(17,036) | $(15,890) | $(1,146)| | Net Income (Loss) | $104,231 | $(180,306) | $284,537| | Basic EPS | $0.22 | $(0.42) | $0.64 | | Diluted EPS | $(0.03) | $(0.42) | $0.39 | | Metric (in thousands) | 6 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2021 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | | Total Revenue | $6,196 | $6,135 | $61 | | Gross Profit | $1,351 | $918 | $433 | | Operating Loss | $(32,197) | $(27,206) | $(4,991)| | Net Income (Loss) | $190,949 | $(429,820) | $620,769| | Basic EPS | $0.42 | $(1.08) | $1.50 | | Diluted EPS | $(0.06) | $(1.08) | $1.02 | [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%28Deficit%29) The company's total stockholders' equity (deficit) significantly improved from a deficit of **$185.5 million** at December 31, 2021, to a positive **$15.9 million** at June 30, 2022. This change was primarily driven by a net income of **$190.9 million** and an increase in additional paid-in capital from common stock issuances and stock-based compensation, partially offset by other comprehensive losses | Metric (in thousands) | Dec 31, 2021 | Jun 30, 2022 | Change | | :-------------------- | :----------- | :----------- | :----- | | Common Stock | $447 | $465 | $18 | | Additional Paid-In Capital | $765,215 | $776,640 | $11,425| | Accumulated Deficit | $(950,985) | $(760,036) | $190,949| | Total Stockholders' Equity (Deficit) | $(185,535) | $15,941 | $201,476| [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2022, net cash used in operating activities was **$34.3 million**, an increase from **$30.4 million** in the prior year. Investing activities provided **$42.1 million** in cash, a significant shift from **$145.3 million** used in 2021, primarily due to marketable securities sales. Financing activities provided **$4.2 million**, a substantial decrease from **$227.3 million** in 2021, mainly due to lower common stock issuances. Overall, cash and cash equivalents increased by **$12.0 million** to **$45.4 million** | Cash Flow Activity (in thousands) | 6 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2021 | Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | | Net cash used in operating activities | $(34,341) | $(30,407) | $(3,934)| | Net cash provided by (used in) investing activities | $42,108 | $(145,318) | $187,426| | Net cash provided by financing activities | $4,197 | $227,274 | $(223,077)| | Net increase in cash and cash equivalents | $11,964 | $51,549 | $(39,585)| | Cash and cash equivalents, at ending of period | $45,425 | $69,754 | $(24,329)| [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on the company's financial position, operations, and cash flows, covering significant accounting policies, liquidity, revenue recognition, debt, equity, and fair value measurements. Key updates include capital raising activities, changes in derivative valuations, and the repayment of the PPP Loan [Note 1. Organization and Nature of Operations](index=8&type=section&id=Note%201.%20Organization%20and%20Nature%20of%20Operations) Senseonics Holdings, Inc. is a medical technology company specializing in long-term, implantable continuous glucose monitoring (CGM) systems - Senseonics Holdings, Inc. is a medical technology company specializing in **long-term, implantable continuous glucose monitoring (CGM) systems**[15](index=15&type=chunk) [Note 2. Liquidity and Capital Resources](index=8&type=section&id=Note%202.%20Liquidity%20and%20Capital%20Resources) The company has an accumulated deficit of **$760.0 million** and **$150.5 million** in cash and marketable securities as of June 30, 2022, having raised **$8.0 million** from common stock sales - The Company has an accumulated deficit of **$760.0 million** as of June 30, 2022, and has never been profitable from operations[17](index=17&type=chunk) - As of June 30, 2022, the Company had **$150.5 million** in cash, cash equivalents, and marketable securities[17](index=17&type=chunk) - During the six months ended June 30, 2022, the Company received **$8.0 million** in net proceeds from the sale of 3,077,493 shares of common stock under the 2021 Sales Agreement[18](index=18&type=chunk) [Note 3. Summary of Significant Accounting Policies](index=10&type=section&id=Note%203.%20Summary%20of%20Significant%20Accounting%20Policies) The company's financial statements adhere to U.S. GAAP, with management estimates impacting reported amounts, and operates as a single segment focused on glucose monitoring products - The Company's financial statements are prepared under U.S. GAAP for interim reporting, with management's estimates affecting various reported amounts[25](index=25&type=chunk)[31](index=31&type=chunk) - The Company operates as a **single segment** focused on glucose monitoring products[26](index=26&type=chunk) - Adoption of ASU 2020-06 on January 1, 2022, had **no material impact**; ASU 2016-13 (effective Jan 1, 2023) is not expected to have a significant impact[28](index=28&type=chunk)[30](index=30&type=chunk) [Note 4. Revenue Recognition](index=12&type=section&id=Note%204.%20Revenue%20Recognition) Revenue is primarily generated from Eversense system sales to Ascensia and other partners, with the majority of revenue coming from outside the United States - Revenue is generated from sales of the Eversense system to Ascensia, EU distributors, and US strategic fulfillment partners[34](index=34&type=chunk) | Customer | 3 Months Ended Jun 30, 2022 | 3 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2021 | | :------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Ascensia Revenue % | 96% | 87% | 93% | 85% | | Geographic Region (in thousands) | 3 Months Ended Jun 30, 2022 | 3 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2021 | | :------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Outside of the United States | $2,507 (67.5%) | $2,310 (70.2%) | $4,222 (68.1%) | $4,843 (78.9%) | | United States | $1,207 (32.5%) | $979 (29.8%) | $1,974 (31.9%) | $1,292 (21.1%) | | Total Revenue | $3,714 | $3,289 | $6,196 | $6,135 | [Note 5. Net Income (Loss) per Share](index=13&type=section&id=Note%205.%20Net%20Income%20%28Loss%29%20per%20Share) Basic EPS for the six months ended June 30, 2022, was **$0.42**, while diluted EPS was **$(0.06)**, with potentially dilutive shares excluded during net loss periods | Metric | 3 Months Ended Jun 30, 2022 | 3 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2021 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic EPS | $0.22 | $(0.42) | $0.42 | $(1.08) | | Diluted EPS | $(0.03) | $(0.42) | $(0.06) | $(1.08) | - Potentially dilutive common shares are excluded from diluted EPS calculations during net loss periods as they would be anti-dilutive[39](index=39&type=chunk)[41](index=41&type=chunk) [Note 6. Marketable Securities](index=14&type=section&id=Note%206.%20Marketable%20Securities) Total marketable securities decreased by **$43.2 million** to **$105.1 million** at June 30, 2022, with unrealized losses primarily due to interest rate fluctuations | Security Type (in thousands) | Dec 31, 2021 Market Value | Jun 30, 2022 Market Value | Change | | :--------------------------- | :------------------------ | :------------------------ | :----- | | Commercial Paper | $57,369 | $14,532 | $(42,837)| | Corporate Debt Securities | $39,748 | $36,897 | $(2,851)| | Asset Backed Securities | $26,707 | $14,734 | $(11,973)| | Government and Agency Securities | $24,503 | $38,929 | $14,426| | Total Marketable Securities | $148,327 | $105,092 | $(43,235)| - Unrealized losses of **$1.1 million** at June 30, 2022, were primarily due to interest rate fluctuations, not increased credit risk[42](index=42&type=chunk)[43](index=43&type=chunk) [Note 7. Inventory, net](index=15&type=section&id=Note%207.%20Inventory%2C%20net) Total inventory increased by **$0.9 million** to **$7.3 million** at June 30, 2022, with a **$0.6 million** charge for obsolete/excess inventory recorded in Q2 and H1 2022 | Inventory Category (in thousands) | Dec 31, 2021 | Jun 30, 2022 | Change | | :-------------------------------- | :----------- | :----------- | :----- | | Finished goods | $1,012 | $1,020 | $8 | | Work-in-process | $3,770 | $4,705 | $935 | | Raw materials | $1,534 | $1,526 | $(8) | | Total | $6,316 | $7,251 | $935 | - A **$0.6 million** charge was recorded to cost of sales for obsolete/excess inventory in Q2 and H1 2022, compared to no charge in 2021[44](index=44&type=chunk) [Note 8. Prepaid Expenses, Other Current Assets, and Deposits and other assets](index=15&type=section&id=Note%208.%20Prepaid%20Expenses%2C%20Other%20Current%20Assets%2C%20and%20Deposits%20and%20other%20assets) Total prepaid and other current assets increased by **$1.6 million** to **$7.8 million**, and deposits and other assets increased by **$2.2 million** due to a lease extension | Category (in thousands) | Dec 31, 2021 | Jun 30, 2022 | Change | | :---------------------- | :----------- | :----------- | :----- | | Contract manufacturing | $5,036 | $5,314 | $278 | | Insurance | $74 | $913 | $839 | | Clinical and Preclinical| $142 | $669 | $527 | | Total Prepaid & Other Current Assets | $6,218 | $7,818 | $1,600 | - Deposits and other assets increased by **$2.2 million**, primarily due to a **$3.2 million** right-of-use asset from a five-year lease extension for corporate headquarters[45](index=45&type=chunk) [Note 9. Accrued Expenses, Other Current Liabilities, and Other Liabilities](index=16&type=section&id=Note%209.%20Accrued%20Expenses%2C%20Other%20Current%20Liabilities%2C%20and%20Other%20Liabilities) Total accrued expenses and other current liabilities increased slightly to **$14.4 million**, while other liabilities increased to **$3.1 million** due to a non-current operating lease liability | Category (in thousands) | Dec 31, 2021 | Jun 30, 2022 | Change | | :---------------------- | :----------- | :----------- | :----- | | Compensation and benefits | $3,484 | $3,251 | $(233) | | Research and development | $2,145 | $2,254 | $109 | | Sales and marketing services | $1,962 | $2,276 | $314 | | Total Accrued Expenses & Other Current Liabilities | $14,264 | $14,423 | $159 | - Other liabilities increased from **$0.6 million** to **$3.1 million** due to the non-current portion of the operating lease liability after a five-year extension[46](index=46&type=chunk) [Note 10. Product Warranty Obligations](index=16&type=section&id=Note%2010.%20Product%20Warranty%20Obligations) The product warranty reserve increased from **$0.7 million** to **$0.8 million** from December 31, 2021, to June 30, 2022 - The warranty reserve increased from **$0.7 million** to **$0.8 million** from December 31, 2021, to June 30, 2022[48](index=48&type=chunk) | Warranty Activity (in thousands) | 6 Months Ended Jun 30, 2022 | 12 Months Ended Dec 31, 2021 | | :------------------------------- | :-------------------------- | :--------------------------- | | Balance at beginning of period | $723 | $646 | | Provision for warranties | $47 | $781 | | Settlements made | $(6) | $(704) | | Balance at end of period | $764 | $723 | [Note 11. Notes Payable, Preferred Stock and Stock Purchase Warrants](index=16&type=section&id=Note%2011.%20Notes%20Payable%2C%20Preferred%20Stock%20and%20Stock%20Purchase%20Warrants) The company repaid its **$5.8 million** PPP Loan in April 2022, and outstanding convertible notes include **$15.7 million** for 2023 Notes, **$51.2 million** for 2025 Notes, and **$35.0 million** for PHC Notes - The **$5.8 million** PPP Loan was fully repaid in April 2022[50](index=50&type=chunk) | Note Type | Principal (in thousands) as of Jun 30, 2022 | Maturity Date | Interest Rate | | :-------- | :---------------------------------------- | :------------ | :------------ | | 2023 Notes | $15,700 | Feb 1, 2023 | 5.25% | | 2025 Notes | $51,199 | Jan 15, 2025 | 5.25% | | PHC Notes | $35,000 | Oct 31, 2024 | 8.00% (decreased from 9.5%) | - The fair value of the Energy Capital Option liability decreased from **$69.4 million** to **$19.5 million**, and the PHC Option asset increased from **$0.2 million** to **$1.1 million**[52](index=52&type=chunk)[61](index=61&type=chunk) [Note 12. Stockholders' Equity (Deficit)](index=24&type=section&id=Note%2012.%20Stockholders%27%20Equity%20%28Deficit%29) The company received **$8.0 million** in net proceeds from common stock sales in H1 2022, following significant capital raises in H1 2021 - **$8.0 million** in net proceeds were received from the sale of 3,077,493 common shares under the 2021 Sales Agreement during H1 2022[74](index=74&type=chunk) - In H1 2021, the company raised **$48.4 million** from the 2019 Sales Agreement, **$106.1 million** from the 2021 Public Offering, and **$46.1 million** from the Registered Direct Offering[75](index=75&type=chunk)[76](index=76&type=chunk) [Note 13. Stock-Based Compensation](index=25&type=section&id=Note%2013.%20Stock-Based%20Compensation) As of June 30, 2022, **19.7 million shares** were available for grant under the 2015 Plan, with **28,944 shares** purchased under the 2016 ESPP during H1 2022 - As of June 30, 2022, **19.7 million shares** were available for grant under the 2015 Plan, **0.8 million** under the Inducement Plan, and **13.1 million** under the 2016 ESPP[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) - **28,944 shares** of common stock were purchased under the 2016 ESPP during the six months ended June 30, 2022[80](index=80&type=chunk) [Note 14. Fair Value Measurements](index=27&type=section&id=Note%2014.%20Fair%20Value%20Measurements) Total Level 3 instruments decreased by **$158.9 million** to **$65.2 million**, driven by significant gains on fair value adjustments of options and derivatives | Level 3 Instruments (in thousands) | Dec 31, 2021 | Jun 30, 2022 | Change | | :--------------------------------- | :----------- | :----------- | :----- | | Total Level 3 Instruments | $224,037 | $65,151 | $(158,886)| - The decrease in Level 3 instruments was driven by a **$49.9 million** gain on fair value adjustment of option and a **$107.7 million** gain on change in fair value of derivatives[86](index=86&type=chunk) [Note 15. Income Taxes](index=29&type=section&id=Note%2015.%20Income%20Taxes) No tax provision or benefit was recorded for H1 2022 or H1 2021 due to a full valuation allowance on net deferred tax assets - No tax provision or benefit was recorded for H1 2022 or H1 2021 due to a full valuation allowance on net deferred tax assets[87](index=87&type=chunk) [Note 16. Related Party Transactions](index=29&type=section&id=Note%2016.%20Related%20Party%20Transactions) Revenue from Ascensia, a related party, increased to **$5.7 million** in H1 2022, with balances due from and to Ascensia also increasing - Revenue from Ascensia, a related party, increased to **$5.7 million** in H1 2022 from **$5.2 million** in H1 2021[89](index=89&type=chunk) | Related Party Balances (in thousands) | Dec 31, 2021 | Jun 30, 2022 | Change | | :------------------------------------ | :----------- | :----------- | :----- | | Due from Ascensia | $1,800 | $4,300 | $2,500 | | Due to Ascensia | $2,500 | $3,600 | $1,100 | [Note 17. Subsequent Events](index=29&type=section&id=Note%2017.%20Subsequent%20Events) No subsequent events requiring financial statement adjustments or disclosures were identified through the filing date - No subsequent events requiring financial statement adjustments or disclosures were identified through the filing date[91](index=91&type=chunk) [ITEM 2: Management Discussion and Analysis of Financial Condition and Results of Operations](index=31&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, highlighting the commercialization progress of Eversense CGM systems, financial performance for the three and six months ended June 30, 2022, and an assessment of liquidity and capital resources [Overview](index=31&type=section&id=Overview) Senseonics is a medical technology company focused on long-term implantable continuous glucose monitoring (CGM) systems, including Eversense, Eversense XL, and Eversense E3. The Eversense E3 system, with a six-month sensor life, received CE mark in June 2022 and FDA approval in February 2022, with commercialization by Ascensia beginning in Q2 2022 in the US and Q3 2022 in Europe. The company has achieved approximately **250 million** covered lives in the U.S. through positive insurance payor coverage decisions - Senseonics develops and manufactures **long-term implantable CGM systems** (Eversense, Eversense XL, Eversense E3) for diabetes management[94](index=94&type=chunk) - Eversense E3, offering a **six-month sensor life**, received FDA approval in February 2022 and CE mark in June 2022, with commercialization by Ascensia in the US (Q2 2022) and Europe (Q3 2022)[94](index=94&type=chunk)[110](index=110&type=chunk) - The company has secured coverage for approximately **250 million lives** in the U.S. through positive insurance payor decisions[96](index=96&type=chunk) [United States Development and Commercialization of Eversense](index=35&type=section&id=United%20States%20Development%20and%20Commercialization%20of%20Eversense) The Eversense CGM system received FDA PMA approval for **90-day use** in June 2018, and the **180-day Eversense E3 system** was FDA approved in February 2022 and commercialized by Ascensia in Q2 2022. A clinical trial for a **365-day sensor** is planned for the second half of 2022 - Eversense CGM received FDA PMA approval for **90-day use** in June 2018 and non-adjunctive indication in June 2019[101](index=101&type=chunk)[103](index=103&type=chunk) - The **180-day Eversense E3 CGM system** was FDA approved in February 2022 and commercialization by Ascensia began in Q2 2022[102](index=102&type=chunk)[107](index=107&type=chunk) - A clinical trial for a **365-day sensor**, including a pediatric population, is targeted for enrollment in the second half of 2022[104](index=104&type=chunk) [European Commercialization of Eversense](index=36&type=section&id=European%20Commercialization%20of%20Eversense) The Eversense XL CGM system received CE mark in September 2017 for **180-day sensor life**, and the Eversense E3 system also received CE mark in June 2022, with European commercialization by Ascensia starting in Q3 2022 - Eversense XL received CE mark in September 2017 for **180-day sensor life** and launched in Europe in Q4 2017[108](index=108&type=chunk) - Eversense E3 received CE mark in June 2022, with Ascensia commencing European commercialization in Q3 2022[110](index=110&type=chunk) [Financial Overview (Revenue, Cost of Sales, Gross Profit)](index=36&type=section&id=Financial%20Overview%20%28Revenue%2C%20Cost%20of%20Sales%2C%20Gross%20Profit%29) The company's revenue is primarily from sales of Eversense systems to distributors and partners, with Ascensia accounting for the majority. Revenue recognition occurs upon product control transfer, with variable consideration (discounts, revenue share) estimated and constrained. Contract assets include unbilled receivables from Ascensia's revenue share - Revenue is generated from Eversense system sales to Ascensia, EU distributors, and US strategic fulfillment partners, with Ascensia being the primary customer[111](index=111&type=chunk)[115](index=115&type=chunk) - Revenue recognition is at the point of control transfer, with variable consideration (discounts, revenue share) estimated and constrained[112](index=112&type=chunk)[113](index=113&type=chunk) - Contract assets consist of unbilled receivables from Ascensia's revenue share[114](index=114&type=chunk) [Results of Operations for the Three Months Ended June 30, 2022 and 2021](index=39&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202022%20and%202021) Total revenue increased by **$0.4 million** to **$3.7 million**, gross profit more than doubled to **$0.8 million** with a **22.2%** gross margin, and net income significantly improved to **$104.2 million** from a net loss of **$180.3 million**, driven by fair value adjustments | Metric (in thousands) | 3 Months Ended Jun 30, 2022 | 3 Months Ended Jun 30, 2021 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | | Total Revenue | $3,714 | $3,289 | $425 | | Cost of Sales | $2,891 | $2,897 | $(6) | | Gross Profit | $824 | $392 | $432 | | Gross Margin | 22.2% | 11.9% | 10.3 pp| | R&D Expenses | $9,299 | $7,107 | $2,192 | | SG&A Expenses | $8,561 | $9,175 | $(614) | | Operating Loss | $(17,036) | $(15,890) | $(1,146)| | Total Other Income (Expense), net | $121,267 | $(164,416) | $285,683| | Net Income (Loss) | $104,231 | $(180,306) | $284,537| - Gross margin improved significantly due to the utilization of previously written-off inventory and a favorable sales mix[121](index=121&type=chunk) - R&D expenses increased by **$2.2 million** due to investments in next-generation technologies, clinical studies, and workforce expansion[122](index=122&type=chunk) [Results of Operations for the Six Months Ended June 30, 2022 and 2021](index=40&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202022%20and%202021) Total revenue remained consistent at **$6.2 million**, gross profit increased to **$1.4 million** with a **21.8%** gross margin, and net income significantly improved to **$190.9 million** from a net loss of **$429.8 million**, driven by fair value adjustments | Metric (in thousands) | 6 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2021 | Change | | :-------------------- | :-------------------------- | :-------------------------- | :----- | | Total Revenue | $6,196 | $6,135 | $61 | | Cost of Sales | $4,845 | $5,217 | $(372) | | Gross Profit | $1,351 | $918 | $433 | | Gross Margin | 21.8% | 15.0% | 6.8 pp | | R&D Expenses | $17,103 | $12,362 | $4,741 | | SG&A Expenses | $16,445 | $15,762 | $683 | | Operating Loss | $(32,197) | $(27,206) | $(4,991)| | Total Other Income (Expense), net | $223,146 | $(402,614) | $625,760| | Net Income (Loss) | $190,949 | $(429,820) | $620,769| - R&D expenses increased by **$4.7 million** due to investments in next-generation technologies, clinical studies, personnel, and consulting services[129](index=129&type=chunk) - SG&A expenses increased by **$0.6 million** due to higher general and administrative costs, partially offset by lower sales and marketing costs as Ascensia assumed commercialization[130](index=130&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company has an accumulated deficit of **$760.0 million** and **$150.5 million** in cash and marketable securities as of June 30, 2022, with management expecting existing liquidity to be sufficient through 2023 - Accumulated deficit was **$760.0 million** as of June 30, 2022, with no historical profitability from operations[132](index=132&type=chunk) - Cash, cash equivalents, and marketable debt securities totaled **$150.5 million** as of June 30, 2022[132](index=132&type=chunk) - Management expects existing liquidity to be sufficient through 2023 and may seek additional capital for strategic flexibility[143](index=143&type=chunk)[159](index=159&type=chunk) [Indebtedness](index=45&type=section&id=Indebtedness) The company repaid its **$5.8 million** PPP Loan in April 2022, with outstanding convertible notes including **$15.7 million** for 2023 Notes, **$51.2 million** for 2025 Notes, and **$35.0 million** for PHC Notes, whose interest rate decreased to **8.0%** in April 2022 - The **$5.8 million** PPP Loan was fully repaid in April 2022[147](index=147&type=chunk) | Convertible Note | Principal (in millions) as of Jun 30, 2022 | Maturity Date | Coupon Rate | | :--------------- | :--------------------------------------- | :------------ | :---------- | | 2023 Notes | $15.7 | Feb 1, 2023 | 5.25% | | 2025 Notes | $51.2 | Jan 15, 2025 | 5.25% | | PHC Notes | $35.0 | Oct 31, 2024 | 8.00% | - The interest rate on PHC Notes decreased to **8.0%** in April 2022 due to FDA approval of the 180-day Eversense E3 product[152](index=152&type=chunk) [Funding Requirements and Outlook](index=46&type=section&id=Funding%20Requirements%20and%20Outlook) Future profitability depends on successful commercialization and adoption of Eversense CGM systems, requiring significant working capital through 2022 and beyond for product development and expanding insurance coverage, with existing cash expected to cover needs through 2023 - Future profitability hinges on successful commercialization, adoption, product development, and regulatory approvals of Eversense CGM systems[157](index=157&type=chunk) - Significant working capital is required through 2022 and beyond for activities like expanding insurance coverage and developing the Eversense 365-day product[157](index=157&type=chunk) - Existing cash and future operations are expected to cover operating needs through 2023, with potential for additional capital market access[159](index=159&type=chunk) [Cash Flows](index=47&type=section&id=Cash%20Flows) Net cash used in operating activities increased to **$34.3 million**, investing activities provided **$42.1 million**, a significant positive swing, and financing activities decreased substantially to **$4.2 million** due to lower common stock issuances | Cash Flow Activity (in thousands) | 6 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2021 | Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | | Net cash used in operating activities | $(34,341) | $(30,407) | $(3,934)| | Net cash provided by (used in) investing activities | $42,108 | $(145,318) | $187,426| | Net cash provided by financing activities | $4,197 | $227,274 | $(223,077)| - Investing activities shifted from a significant cash outflow in 2021 to a substantial inflow in 2022, driven by marketable securities sales[164](index=164&type=chunk) - Financing cash flow decreased significantly due to reduced common stock issuances compared to the prior year[165](index=165&type=chunk)[166](index=166&type=chunk) [Contractual Obligations](index=49&type=section&id=Contractual%20Obligations) No material changes in contractual obligations and commitments were reported as of June 30, 2022, compared to the prior Annual Report on Form 10-K - No material changes in contractual obligations and commitments were reported as of June 30, 2022, compared to the prior Annual Report on Form 10-K[167](index=167&type=chunk) [ITEM 3: Quantitative and Qualitative Disclosures about Market Risk](index=49&type=section&id=ITEM%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a "smaller reporting company" under SEC rules, 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 market risk disclosures in this 10-Q due to its status as a "smaller reporting company"[168](index=168&type=chunk) [ITEM 4: Controls and Procedures](index=49&type=section&id=ITEM%204%3A%20Controls%20and%20Procedures) Management evaluated the effectiveness of disclosure controls and procedures as of June 30, 2022, concluding they were effective, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were deemed effective at a reasonable assurance level as of June 30, 2022[169](index=169&type=chunk) - No material changes in internal control over financial reporting occurred during Q2 2022[170](index=170&type=chunk) PART II: Other Information [ITEM 1: Legal Proceedings](index=49&type=section&id=ITEM%201%3A%20Legal%20Proceedings) The company faces ongoing litigation, including an amended False Claims Act complaint filed in May 2022, and was assessed a **EUR 45,000** fine by the Italian Data Protection Authority for GDPR breaches, which it intends to settle for **EUR 22,500** - A False Claims Act civil complaint was dismissed without prejudice on March 31, 2022, but an amended complaint was filed on May 27, 2022, to which the company filed another motion to dismiss on July 11, 2022[173](index=173&type=chunk)[175](index=175&type=chunk) - The Italian Data Protection Authority (Garante) found GDPR breaches, assessing a **EUR 45,000** fine, which the company intends to settle for **EUR 22,500** by updating its privacy notice and not appealing[176](index=176&type=chunk) [ITEM 1A: Risk Factors](index=51&type=section&id=ITEM%201A%3A%20Risk%20Factors) Risk factors remain consistent with the Annual Report on Form 10-K, with new emphasis on the potential negative impact of the Russia-Ukraine conflict and macroeconomic conditions like inflation and rising interest rates - Risk factors remain largely consistent with the Annual Report on Form 10-K, with new emphasis on the Russia-Ukraine conflict[177](index=177&type=chunk) - The Russia-Ukraine military action could adversely affect the global economy, the company's business, operations, and financial condition, including supply chains and capital raising[178](index=178&type=chunk)[179](index=179&type=chunk) - Economic downturns, inflation, and rising interest rates are identified as macroeconomic conditions that could negatively impact the business and financial performance[180](index=180&type=chunk)[181](index=181&type=chunk) [ITEM 2: Unregistered Sales of Equity and Securities and Use of Proceeds](index=53&type=section&id=ITEM%202%3A%20Unregistered%20Sales%20of%20Equity%20and%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable to the company for this reporting period - Not applicable for this reporting period[182](index=182&type=chunk) [ITEM 3: Defaults Upon Senior Securities](index=53&type=section&id=ITEM%203%3A%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for this reporting period - Not applicable for this reporting period[183](index=183&type=chunk) [ITEM 4: Mine Safety Disclosures](index=53&type=section&id=ITEM%204%3A%20Mine%20Safety%20Disclosures) This item is not applicable to the company for this reporting period - Not applicable for this reporting period[184](index=184&type=chunk) [ITEM 5: Other Information](index=53&type=section&id=ITEM%205%3A%20Other%20Information) No other information is reported under this item for the current period - No other information to report[185](index=185&type=chunk) [ITEM 6: Exhibits](index=53&type=section&id=ITEM%206%3A%20Exhibits) This section lists the exhibits filed or incorporated by reference as part of this Quarterly Report on Form 10-Q, including corporate governance documents, agreements, and certifications - Lists exhibits filed or incorporated by reference, including corporate documents, agreements, and certifications[186](index=186&type=chunk)[187](index=187&type=chunk) [SIGNATURES](index=55&type=section&id=SIGNATURES) The report is duly signed on behalf of Senseonics Holdings, Inc. by Nick B. Tressler, Chief Financial Officer, on August 9, 2022 - Report signed by Nick B. Tressler, CFO, on August 9, 2022[193](index=193&type=chunk)

Senseonics... | --- | --- | --- | --- | |--------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|-------|-----------------------------------| | | | | | | | | | | | Eversense | ® E3 | | | | The world's FIRST and ONLY | CGM System long-term Continuous Glucose Monitoring System | | | | Tim Goodnow , PhD President and CEO © 2021 Senseonics™ Corporate Presentation, updated November 2021 | | | Corporate Pr ...

Financial Data and Key Metrics Changes - In Q1 2022, total net revenue was $2.5 million, a decrease from $2.8 million in the prior year period [25] - U.S. revenue for Q1 was $0.8 million, while revenue outside the U.S. was $1.7 million [25] - Gross profit remained stable at $0.5 million, consistent with the prior year [25] - Operating loss for Q1 2022 was $15.2 million, compared to a loss of $11.3 million in Q1 2021 [26] - Total net income was $86.7 million or $0.19 per share, a significant increase from a net loss of $249.5 million or $0.68 per share in Q1 2021, primarily due to noncash gains related to embedded derivatives [29] Business Line Data and Key Metrics Changes - The first quarter results were driven by inventory transition plans to the new E3 product [10] - The company is focused on transitioning current users to the E3 system and expanding new patient and clinician adoption [11] Market Data and Key Metrics Changes - The global market for continuous glucose monitoring (CGM) is approximately $7 billion, with significant growth opportunities as many individuals are not yet using CGM [40] - The company anticipates a notable increase in market penetration with the E3 product, particularly among patients new to CGM [40] Company Strategy and Development Direction - The company achieved FDA approval for the Eversense E3 continuous glucose monitoring system, extending the wear duration to 6 months [7] - The strategy includes a comprehensive commercial rollout of the E3 product in the U.S. and anticipated launch in Europe in Q3 [33][21] - Significant investments are being made to enhance access and awareness initiatives for the E3 product [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the early interest from patients and healthcare providers, indicating a positive commercial outlook for 2022 [39] - The company expects gross margins to approach breakeven in Q4 2022 as payer coverage transitions from the 90-day to the 6-month product [30] - The outlook for full-year 2022 global net revenue is projected to be in the range of $14 million to $18 million [30] Other Important Information - The company is actively engaged with payers to transition coverage for the E3 product, with early wins from Aetna and Humana [17] - A patient assistance program has been implemented to attract patients with commercial insurance coverage [18] Q&A Session Summary Question: What metrics are being tracked for the E3 commercial launch? - Management noted that patient and physician interest is driving metrics, with direct-to-consumer leads higher than anticipated [39] Question: What is the size of the E3 opportunity relative to the 90-day product? - Management expects significant growth, with many potential users not currently on CGM [40] Question: What is the expected timing for additional payer transitions to E3? - Management anticipates quick transitions for Medicare patients in the next couple of months, with most transitions expected in the next quarters [42] Question: How many healthcare professionals are currently implanting the 90-day sensor? - Approximately 550 medical professionals are trained for insertion, with no additional training required for the transition to the 180-day product [45] Question: What is the current inventory situation at Ascensia? - The transition from the 90-day to the E3 product is actively managed, with inventory levels being adjusted accordingly [46] Question: What is the plan for the 365-day sensor? - The IDE filing is anticipated in Q2, with the first patient insertions expected in Q4 [47] Question: How to think about cash burn over the course of the year? - Management anticipates operational expenses of about $60 million to $70 million for the year, translating to approximately $5 million per month [48]

Table of Contents 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, 2022 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 Senseonics Holdings, Inc. (Exact name of registrant as specified in its charter) Delaware ...

Financial Data and Key Metrics Changes - In Q4 2021, total net revenue was $4 million, compared to $3.9 million in the prior year period, with U.S. revenue at $700,000 and international revenue at $3.3 million [33][15] - Gross loss in Q4 2021 was $0.5 million, a decrease of $3.1 million from a gross profit of $2.6 million in the prior year, primarily due to increased cost of goods sold [33] - Operating loss for Q4 2021 was $13.9 million, compared to a loss of $10.3 million in Q4 2020 [36] - Total net income for Q4 2021 was $84.4 million or $0.19 per share, compared to a net loss of $101.6 million or $0.41 per share in Q4 2020 [38] - Cash, cash equivalents, and investments totaled $181.8 million as of December 31, 2021 [41] Business Line Data and Key Metrics Changes - The company generated $4 million in revenue in Q4 2021, with $700,000 from the U.S. and $3.3 million from outside the U.S. [33][15] - The transition to Ascensia for commercialization has led to a decrease in selling, general, and administrative expenses to $5.8 million in Q4 2021, down from $8.2 million in the prior year [34] - Research and development expenses increased to $7.7 million in Q4 2021, up from $4.7 million in the prior year, due to expanded R&D headcount and clinical studies [35] Market Data and Key Metrics Changes - The company added over 8 million additional covered lives with positive coverage decisions from payers such as Blue Cross Blue Shield of Michigan and others [13] - The total number of covered lives for the 90-day product is approximately 210 million [65] Company Strategy and Development Direction - The company is focused on the commercial launch of the Eversense E3 system in the U.S. scheduled for April 2022, which includes product availability and broader marketing efforts [18][20] - Ascensia is establishing a dedicated CGM commercial organization to enhance patient engagement and optimize sales strategy [16] - The company plans to transition current patients to the E3 system and expand new patient and clinician adoption [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of COVID-19 on the organization and the delay in U.S. approval, which affected rollout and progression [55] - The company expects full-year 2022 global net revenue to be in the range of $14 million to $18 million, with significant revenue expected in the second half of the year [42][46] - Management expressed confidence in the E3 product's potential to drive patient adoption and market penetration [10][49] Other Important Information - The E3 system is the longest-lasting CGM system approved in the U.S., with a wear duration of 6 months and an accuracy of 8.5% MARD [8] - The company is working on a 1-year sensor and plans to submit for IDE approval in Q2 2022 [30][31] Q&A Session Summary Question: Revenue guidance and underlying assumptions - Management discussed the impact of COVID-19 and the transition to the 180-day sensor, indicating that they expect reasonable use of the patient assistance program [53][55] Question: Recent patient volume falloff - Management noted that the biggest impact was from the withdrawal of funding for the commercial organization, with COVID-19 contributing to the decline [62][64] Question: Reimbursement progress and covered lives - Management confirmed that they are still counting about 210 million covered lives and are hopeful for coverage from major payers [65][70] Question: Pilot-at-home insertion program - Management expressed excitement about the pilot program but stated it is still in a test configuration [71] Question: Guidance modification and future ramp - Management indicated that they are not in a position to provide specific guidance for 2023 and 2024 due to the impact of COVID-19 [74] Question: Positioning against competitors - Management highlighted that Eversense remains the only implantable CGM and expects to capture a fair share of the growing market [75][76] Question: Patient assistance program impact on revenue - Management clarified that the patient assistance program is an investment that will reduce net revenue but aims to drive adoption [82]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 __________________________________________ ☐ 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 SENSEONICS HOLDINGS, INC. (Exact ...