Senseonics(SENS) - 2025 Q2 - Quarterly Report

PART I: Financial Information This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for Senseonics Holdings, Inc ITEM 1: Financial Statements This section presents Senseonics Holdings, Inc.'s unaudited condensed consolidated financial statements and explanatory notes Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------- | :--------------------------------------- | :------------------------------- | | Assets | | | | Cash and cash equivalents | $31,518 | $74,597 | | Short term investments, net | $94,894 | — | | Total current assets | $141,588 | $91,438 | | Total assets | $150,274 | $100,438 | | Liabilities & Equity | | | | Total current liabilities | $14,776 | $38,849 | | Total liabilities | $55,554 | $79,337 | | Total stockholders' equity (deficit) | $94,720 | $(16,555) | - Total assets increased by approximately $49.8 million from December 31, 2024, to June 30, 2025, primarily due to a significant increase in short-term investments[8] - Total stockholders' equity shifted from a deficit of $(16.6) million to a positive $94.7 million, indicating a substantial improvement in the company's equity position[8] Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss This statement details the company's revenues, expenses, and net loss over specific reporting periods Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :-------------------------------------- | :-------------------------------------- | :------------------------------------ | :------------------------------------ | | Total revenue | $6,649 | $4,865 | $12,906 | $9,912 | | Gross profit | $3,121 | $298 | $4,626 | $633 | | Research and development expenses | $7,715 | $10,800 | $15,014 | $21,238 | | Selling, general and administrative expenses | $9,729 | $8,991 | $17,423 | $17,119 | | Operating loss | $(14,323) | $(19,493) | $(27,811) | $(37,724) | | Net Loss | $(14,501) | $(20,287) | $(28,760) | $(39,164) | | Basic net loss per common share | $(0.02) | $(0.03) | $(0.04) | $(0.06) | - Total revenue increased by $1.78 million (36.7%) for the three months ended June 30, 2025, and by $2.99 million (30.2%) for the six months ended June 30, 2025, compared to the same periods in 2024[10] - Gross profit significantly improved, increasing from $0.3 million to $3.1 million for the three-month period and from $0.6 million to $4.6 million for the six-month period, driven by higher revenue and lower cost of sales[10] - Net loss decreased for both periods, from $(20.3) million to $(14.5) million for the three months and from $(39.2) million to $(28.8) million for the six months, indicating improved financial performance[10] Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) This statement tracks changes in the company's equity components over specific reporting periods Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Common Stock (Amount) | $815 | $595 | | Additional Paid-In Capital | $1,070,516 | $930,724 | | Accumulated Deficit | $(976,634) | $(947,874) | | Total Stockholders' Equity (Deficit) | $94,720 | $(16,555) | - The company's total stockholders' equity significantly improved from a deficit of $(16.6) million at December 31, 2024, to a positive $94.7 million at June 30, 2025, primarily due to the issuance of common stock[12] - Issuance of common stock, net of issuance costs, contributed $98.7 million to additional paid-in capital for the six months ended June 30, 2025[12] - Conversion of preferred stock added $37.6 million to stockholders' equity during the six months ended June 30, 2025[12] Unaudited Condensed Consolidated Statements of Cash Flows This statement summarizes the 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, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :-------------------------------------- | :-------------------------------------- | | Net cash used in operating activities | $(25,347) | $(31,404) | | Net cash used in investing activities | $(94,956) | $(18,150) | | Net cash provided by financing activities | $77,224 | $9,016 | | Net decrease in cash, cash equivalents, and restricted cash | $(43,079) | $(40,538) | | Cash, cash equivalents, and restricted cash at ending of period | $31,833 | $35,171 | - Net cash used in operating activities decreased by $6.06 million, from $(31.4) million in 2024 to $(25.3) million in 2025, reflecting improved operational efficiency[13] - Net cash provided by financing activities significantly increased to $77.2 million in 2025 from $9.0 million in 2024, primarily due to proceeds from public and private offerings of common stock[13] - The company repaid $20.4 million of 2025 Notes during the six months ended June 30, 2025[13] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Organization and Nature of Operations This note describes the company's business, its focus on CGM systems, and recent subsidiary formations - Senseonics Holdings, Inc. is a medical technology company focused on developing and manufacturing long-term, implantable continuous glucose monitoring (CGM) systems for diabetes management[14] - The company formed Eon Care Services, LLC and Eon Management Services, LLC in April and July 2024, respectively, as wholly-owned subsidiaries to support patient access to Eversense Systems[15] 2. Liquidity and Capital Resources This note discusses the company's financial position, historical losses, and recent capital-raising activities - The company has incurred significant net losses since inception, with a net loss of $28.8 million for the six months ended June 30, 2025, and an accumulated deficit of $976.6 million[16] - As of June 30, 2025, the company had unrestricted cash, cash equivalents, and marketable securities of $126.4 million[16] - Management believes the company has sufficient resources to meet anticipated operating needs for the next twelve months, alleviating prior going concern doubts, due to recent financing proceeds and existing cash[22] Recent Financing Activities (May 2025) | Offering Type | Gross Proceeds | Net Proceeds | | :-------------------- | :------------- | :----------- | | Public Offering | $57.5 million | $52.1 million | | Private Placement (Abbott) | $20.3 million | $20.1 million | 3. Summary of Significant Accounting Policies This note 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 and SEC regulations, with certain information condensed or omitted[23][24] - The company operates and manages its business as one segment: diabetes products and services[25] - Eon Care PCs are consolidated as Variable Interest Entities (VIEs) because the company is the primary beneficiary, directing significant activities and absorbing potential losses or benefits[27] - The company is evaluating new FASB ASUs (2023-09 and 2024-03) regarding income tax and expense disaggregation disclosures, expecting no material impact on financial statements from ASU 2023-09[29][30] 4. Revenue Recognition This note describes the company's revenue streams, including sales to distributors and consignment arrangements - Revenue is generated from sales of Eversense Systems to Ascensia, third-party distributors, and strategic fulfillment partners, as well as through a consignment model with healthcare professionals[32] Revenue by Geographic Region (in thousands) | Region | 3 Months Ended June 30, 2025 | % of Total (2025) | 3 Months Ended June 30, 2024 | % of Total (2024) | | :------------------------ | :--------------------------- | :---------------- | :--------------------------- | :---------------- | | United States | $4,946 | 74.4% | $3,030 | 62.3% | | Outside of the United States | $1,703 | 25.6% | $1,835 | 37.7% | | Total | $6,649 | 100.0% | $4,865 | 100.0% | | Region | 6 Months Ended June 30, 2025 | % of Total (2025) | 6 Months Ended June 30, 2024 | % of Total (2024) | | :------------------------ | :--------------------------- | :---------------- | :--------------------------- | :---------------- | | United States | $9,441 | 73.2% | $6,706 | 67.7% | | Outside of the United States | $3,465 | 26.8% | $3,206 | 32.3% | | Total | $12,906 | 100.0% | $9,912 | 100.0% | Revenue Concentration (Sales to Ascensia) | Period | % of Total Revenue | | :-------------------------- | :----------------- | | 3 Months Ended June 30, 2025 | 52% | | 3 Months Ended June 30, 2024 | 84% | | 6 Months Ended June 30, 2025 | 61% | | 6 Months Ended June 30, 2024 | 86% | Consignment Sales as % of Total Revenue | Period | % of Total Revenue | | :-------------------------- | :----------------- | | 3 Months Ended June 30, 2025 | 40.9% | | 3 Months Ended June 30, 2024 | 14.7% | | 6 Months Ended June 30, 2025 | 32.5% | | 6 Months Ended June 30, 2024 | 11.3% | 5. Net Loss per Share This note details the calculation of basic and diluted net loss per common share for the periods presented Net Loss Per Share (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(14,501) | $(20,287) | $(28,760) | $(39,164) | | Basic and diluted net loss per share | $(0.02) | $(0.03) | $(0.04) | $(0.06) | - Basic and diluted net loss per common share improved from $(0.03) to $(0.02) for the three months ended June 30, 2025, and from $(0.06) to $(0.04) for the six months ended June 30, 2025[40] - Potentially dilutive common shares are excluded from diluted net loss per share calculations during periods of net loss as their effect would be anti-dilutive[39] 6. Composition of Certain Financial Statement Items This note provides a breakdown of key balance sheet accounts, including cash, receivables, and inventory Cash, Cash Equivalents, and Restricted Cash (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Cash | $2,183 | $3,984 | | Money market funds | $29,335 | $70,613 | | Restricted Cash | $315 | $315 | | Total | $31,833 | $74,912 | Accounts Receivable, net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Accounts receivable | $3,661 | $1,695 | | Accounts receivable - related parties | $2,304 | $4,921 | | Less: allowance for credit losses | $(808) | $(330) | | Total accounts receivable, net | $5,157 | $6,286 | Inventory, net (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Finished goods | $1,520 | $781 | | Work-in-process | $2,574 | $3,213 | | Raw materials | $620 | $427 | | Total | $4,714 | $4,421 | - The company capitalized costs related to 365-day product inventory starting September 2024 after FDA 510(k) clearance, which resulted in lower cost of sales as pre-clearance inventory was sold[44] 7. Marketable Securities This note details the company's investments in marketable securities, including their fair value and maturity profiles Marketable Securities Available for Sale (June 30, 2025, in thousands) | Type | Amortized Cost | Estimated Market Value | | :-------------------------- | :------------- | :--------------------- | | Commercial Paper | $14,384 | $14,382 | | Corporate debt securities | $9,178 | $9,184 | | Government and agency securities | $71,309 | $71,328 | | Total | $94,871 | $94,894 | - There were no marketable securities held as of December 31, 2024, indicating a significant investment in these assets during the first half of 2025[46] - The majority of marketable securities mature in 2025 (remaining six months) and 2026[47] 8. Prepaid Expenses and Other Current Assets This note provides a breakdown of the company's prepaid expenses and other current assets Prepaid Expenses and Other Current Assets (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Tax credits receivable | $1,793 | $1,793 | | Contract manufacturing | $1,635 | $2,720 | | Clinical and Preclinical | $639 | $689 | | Total | $4,990 | $5,819 | 9. Accrued Expenses and Other Current Liabilities This note details the composition of the company's accrued expenses and other current liabilities Accrued Expenses and Other Current Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Compensation and benefits | $2,810 | $5,311 | | Professional and administrative services | $2,646 | $1,587 | | Research and development | $2,494 | $3,416 | | Sales and marketing services | $2,093 | $1,287 | | Contract manufacturing | $1,044 | $1,813 | | Total | $12,507 | $15,506 | 10. Leases This note outlines the company's operating lease arrangements for its corporate headquarters - The company leases approximately 33,000 square feet of research and office space for its corporate headquarters under a non-cancelable operating lease expiring May 31, 2033[51] Operating Lease Assets and Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Operating lease ROU assets | $4,653 | $4,837 | | Current operating lease liabilities | $462 | $429 | | Non-current operating lease liabilities | $5,548 | $5,785 | | Total operating lease liabilities | $6,010 | $6,214 | - The weighted-average remaining lease term for operating leases is 7.9 years, with a weighted-average discount rate of 8.5% as of June 30, 2025[53] 11. Product Warranty Obligations This note describes the company's product warranty policy and the associated liability - The company provides a one-year warranty on its smart transmitters and may replace Eversense System components not functioning to specifications[54] Estimated Warranty Liabilities (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Balance at beginning of the period | $406 | $514 | | Provision for warranties during the period | $185 | $311 | | Settlements made during the period | $(161) | $(419) | | Balance at end of the period | $430 | $406 | 12. Notes Payable, Preferred Stock and Stock Purchase Warrants This note details the company's debt instruments, including term loans and the repayment of 2025 Notes - The company entered into a Loan and Security Agreement in September 2023 for up to $50.0 million in senior secured term loans, with $35.0 million funded as of June 30, 2025[56][79] - The 2025 Notes, with an aggregate principal amount of $20.4 million outstanding at December 31, 2024, were fully repaid on January 15, 2025[70][79] Notes Payable Carrying Amounts (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Loan and Security Agreement | $35,230 | $34,703 | | 2025 Notes | — | $20,138 | | Total | $35,230 | $54,841 | Interest Expense on Notes Payable (in thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | | 2025 Notes | $305 | $1,920 | | Loan and Security Agreement | $2,269 | $2,213 | | Total | $2,574 | $4,133 | 13. Stockholders' Equity This note details changes in the company's equity, including recent public and private offerings Equity Offerings (May 2025) | Offering Type | Gross Proceeds | Net Proceeds | | :-------------------- | :------------- | :----------- | | Public Offering | $57.5 million | $52.1 million | | Private Placement (Abbott) | $20.3 million | $20.1 million | - The Equity Distribution Agreement with Goldman Sachs & Co. LLC was terminated on May 15, 2025, having generated approximately $30.8 million in net proceeds from the sale of 40,130,560 shares[84] 14. Stock-Based Compensation This note describes the company's equity incentive plans and employee stock purchase plan - The 2015 Equity Incentive Plan, Inducement Plan, and 2023 Commercial Equity Plan are active for granting stock options and restricted stock units to employees and non-employees[85][87][88] - As of June 30, 2025, 28,704,491 shares remained available for grant under the Amended and Restated 2015 Plan[86] - The 2016 Employee Stock Purchase Plan (ESPP) allows participants to purchase common stock at 85% of the lower of the fair market value on the offering or purchase date, with 28,299,743 shares available for issuance[89][90] 15. Fair Value Measurements This note provides information on the fair value hierarchy of the company's financial assets Fair Value Hierarchy of Financial Assets (June 30, 2025, in thousands) | Asset Class | Total | Level 1 | Level 2 | Level 3 | | :-------------------------------- | :---- | :------ | :------ | :------ | | Money market funds | $29,335 | $29,335 | — | — | | Commercial paper (>3 months) | $14,382 | — | $14,382 | — | | Corporate debt securities | $9,183 | — | $9,183 | — | | Government and agency securities (>3 months) | $71,328 | $71,328 | — | — | - As of December 31, 2024, money market funds were the only financial asset measured at fair value on a recurring basis, totaling $70.6 million[94] 16. Income Taxes This note discusses the company's income tax position and the impact of recent tax legislation - The company has not recorded any tax provision or benefit for the three and six months ended June 30, 2025 or 2024, due to a full valuation allowance against net deferred tax assets[95] - The recently signed One Big Beautiful Bill Act (OBBBA) is being evaluated but is not expected to have a material impact on the company's consolidated financial statements[96] 17. Related Party Transactions This note discloses significant transactions with related parties, primarily Ascensia - Ascensia, a related party through its parent company PHC, is a significant customer, accounting for 52% and 61% of total revenue for the three and six months ended June 30, 2025, respectively[97][98] Related Party Transactions with Ascensia (in thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Revenue from Ascensia | $7,900 | $8,500 | | Commissions earned by Ascensia | $2,600 | $200 | | Amount due from Ascensia | $2,300 | $4,900 | | Amount due to Ascensia | $2,600 | $1,800 | 18. Segment Information This note confirms the company operates as a single reportable segment and provides key expense categories - The company operates as a single reportable segment, deriving revenue from diabetes products and services[101] Key Expense Categories (in thousands) | Expense Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cost of sales | $3,528 | $4,567 | $8,280 | $9,279 | | Sales and marketing expenses | $2,800 | $1,754 | $4,542 | $3,281 | | Research and development expenses | $7,715 | $10,800 | $15,014 | $21,238 | | General and administrative expenses | $6,929 | $7,237 | $12,881 | $13,838 | 19. Subsequent Events This note confirms the evaluation of events occurring after the reporting period, with no material disclosures required - The company evaluated all subsequent events through the filing date of this Form 10-Q and found no events requiring recognition or disclosure[104] ITEM 2: Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, operational results, Eversense CGM commercialization, and future product development Overview This section introduces Senseonics' core business, key product developments, and strategic initiatives - Senseonics is a medical technology company focused on long-term implantable continuous glucose monitoring (CGM) systems, including Eversense E3 (180-day) and Eversense 365 (365-day)[108] - Eversense 365 received FDA approval in September 2024 and began commercialization in the US in Q4 2024, offering a 365-day extended life CGM system[108][123] - Medicare coverage for Eversense E3 expanded in February 2024 to include all insulin users and non-insulin users with problematic hypoglycemia, significantly increasing patient access[112] - The company fully transitioned its network of inserters to Eon Care in Q2 2025, expecting this to enable a self-sustaining economic model for insertion services[126] - First-in-human testing for the next-generation Gemini product, a fully implantable self-powering system with both flash glucose monitoring and traditional CGM capabilities, began in July 2024[128] - The company plans to submit Eversense 365 for CE Mark approval in Q1 2025, with a potential launch in European markets in H2 2025[130][131] Financial Overview This section summarizes the company's revenue sources, including sales to distributors and consignment models - Revenue is primarily generated from sales of Eversense systems to Ascensia and other distributors, and through a consignment model with healthcare professionals[132] - Sales to Ascensia accounted for 52% and 61% of total revenue for the three and six months ended June 30, 2025, respectively, a decrease from 84% and 86% in the prior year, indicating diversification[137] - Consignment sales significantly increased, accounting for 40.9% and 32.5% of total revenue for the three and six months ended June 30, 2025, up from 14.7% and 11.3% in the prior year[138] Revenue by Geographic Region (in thousands) | Region | 3 Months Ended June 30, 2025 | % of Total (2025) | 3 Months Ended June 30, 2024 | % of Total (2024) | | :------------------------ | :--------------------------- | :---------------- | :--------------------------- | :---------------- | | United States | $4,946 | 74.4% | $3,030 | 62.3% | | Outside of the United States | $1,703 | 25.6% | $1,835 | 37.7% | | Total | $6,649 | 100.0% | $4,865 | 100.0% | | Region | 6 Months Ended June 30, 2025 | % of Total (2025) | 6 Months Ended June 30, 2024 | % of Total (2024) | | :------------------------ | :--------------------------- | :---------------- | :--------------------------- | :---------------- | | United States | $9,441 | 73.2% | $6,706 | 67.7% | | Outside of the United States | $3,465 | 26.8% | $3,206 | 32.3% | | Total | $12,906 | 100.0% | $9,912 | 100.0% | Results of Operations for the Three Months Ended June 30, 2025 and 2024 This section analyzes the company's financial performance for the three-month periods, highlighting revenue, gross profit, and expense trends Financial Performance (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Period-to-Period Change | | :----------------------------------- | :----- | :----- | :---------------------- | | Total revenue | $6,649 | $4,865 | $1,784 | | Cost of sales | $3,528 | $4,567 | $(1,039) | | Gross profit | $3,121 | $298 | $2,823 | | Research and development expenses | $7,715 | $10,800 | $(3,085) | | Selling, general and administrative expenses | $9,729 | $8,991 | $738 | | Operating loss | $(14,323) | $(19,493) | $5,170 | | Net Loss | $(14,501) | $(20,287) | $5,786 | - Total revenue increased by $1.78 million, primarily driven by US sales growth from the consignment program and 365-day product demand[142] - Gross margin improved significantly to 46.9% in 2025 from 6.1% in 2024, due to favorable margins on 365-day product sales, lower fixed manufacturing costs, and a $0.7 million VAT recovery[143] - Research and development expenses decreased by $3.1 million, mainly due to the completion of Eversense 365 system clinical trials and development efforts[144] - Selling, general and administrative expenses increased by $0.7 million, driven by higher sales commission expenses to Ascensia and increased personnel costs for Eon Care subsidiaries, partially offset by lower legal expenses[145] Results of Operations for the Six Months Ended June 30, 2025 and 2024 This section analyzes the company's financial performance for the six-month periods, detailing revenue, gross profit, and expense changes Financial Performance (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Period-to-Period Change | | :----------------------------------- | :----- | :----- | :---------------------- | | Total revenue | $12,906 | $9,912 | $2,994 | | Cost of sales | $8,280 | $9,279 | $(999) | | Gross profit | $4,626 | $633 | $3,993 | | Research and development expenses | $15,014 | $21,238 | $(6,224) | | Selling, general and administrative expenses | $17,423 | $17,119 | $304 | | Operating loss | $(27,811) | $(37,724) | $9,913 | | Net Loss | $(28,760) | $(39,164) | $10,404 | - Total revenue increased by $3.0 million, primarily due to sales growth in the US driven by the consignment program and demand for the 365-day product[148] - Gross margin improved to 35.8% in 2025 from 6.4% in 2024, benefiting from favorable margins on 365-day product sales, lower fixed manufacturing costs, VAT recoveries, and the sale of previously expensed inventory[149] - Research and development expenses decreased by $6.2 million, mainly due to the completion of Eversense 365 system clinical trials[150] - Selling, general and administrative expenses increased by $0.3 million, driven by higher sales commission expenses to Ascensia and personnel costs for Eon Care subsidiaries, offset by a decrease in legal expenses[152] Liquidity and Capital Resources This section discusses the company's financial position, historical funding, and current capital availability - The company has an accumulated deficit of $976.6 million as of June 30, 2025, and has historically funded operations through equity, warrants, convertible notes, and debt[154] - As of June 30, 2025, unrestricted cash, cash equivalents, and marketable securities totaled $126.4 million[154] Recent Equity Financing (May 2025) | Offering Type | Net Proceeds | | :-------------------- | :----------- | | Public Offering | $52.1 million | | Private Placement (Abbott) | $20.1 million | - Management believes the company has sufficient resources for the next twelve months, alleviating prior going concern doubts, due to recent financing and existing cash[161][163] Cash Flows This section analyzes the company's cash flows from operating, investing, and financing activities Summary of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :------------------------------------ | :--------- | :--------- | | Net cash used in operating activities | $(25,347) | $(31,404) | | Net cash used in investing activities | $(94,956) | $(18,150) | | Net cash provided by financing activities | $77,224 | $9,016 | | Net decrease in cash, cash equivalents and restricted cash | $(43,079) | $(40,538) | - Net cash used in operating activities decreased by $6.06 million, driven by a lower net loss and changes in operating assets and liabilities[166][167] - Net cash used in investing activities increased significantly to $95.0 million in 2025, primarily due to $94.4 million in marketable securities purchases[168] - Net cash provided by financing activities increased to $77.2 million, mainly from $72.3 million in net proceeds from public and private stock offerings, offset by $20.4 million repayment of 2025 Notes[170] ITEM 3: Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Senseonics is exempt from providing quantitative and qualitative market risk disclosures - The company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a 'smaller reporting company' under SEC rules[173] ITEM 4: Controls and Procedures Management assessed disclosure controls and procedures as effective, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated as effective at the reasonable assurance level as of June 30, 2025[174] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[175] PART II: Other Information This section provides additional information, including legal proceedings, risk factors, and other required disclosures ITEM 1: Legal Proceedings The company faces a patent infringement lawsuit, currently stayed pending USPTO Inter Partes Review proceedings and a Director's review - The company is a defendant in a patent infringement lawsuit filed by Cellspin Soft, Inc. in May 2024, alleging infringement of three patents[178] - The lawsuit is currently stayed pending resolution of Inter Partes Review (IPR) proceedings at the USPTO, which are challenging the validity of the asserted patents[178] - The IPR proceedings are further stayed pending a sua sponte review by the Acting Director of the USPTO regarding TikTok Inc.'s Chinese ownership status[178] ITEM 1A: Risk Factors Updated risk factors highlight dependence on Ascensia, early commercialization challenges, trade policy impacts, and talent retention - The company's success is highly dependent on Ascensia's effective marketing and sales of Eversense under the Commercialization Agreement, which may not be successful[182][185] - Challenges to Eversense adoption are being addressed through initiatives like establishing Eon Care for insertion services and increasing direct-to-consumer (DTC) spending[183] - The company faces difficulties inherent in early commercialization, including expanding sales infrastructure, increasing brand awareness, managing operations, and responding to competitive pressures[186][187][189] - International trade policies, including tariffs and trade barriers, pose risks to the global supply chain, production costs, and profitability, with limited ability to pass increased costs to customers due to medical device pricing structures[201][203][205] - Future success depends on generating significant sales to achieve profitability and retaining key executives and qualified personnel in a competitive talent market[211][212][213] ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable to the company for this reporting period - This section is marked as 'Not applicable' for the current reporting period[219] ITEM 3: Defaults Upon Senior Securities This item is not applicable to the company for this reporting period - This section is marked as 'Not applicable' for the current reporting period[220] ITEM 4: Mine Safety Disclosures This item is not applicable to the company for this reporting period - This section is marked as 'Not applicable' for the current reporting period[221] ITEM 5: Other Information During the fiscal quarter ended June 30, 2025, a director adopted a Rule 10b5-1 trading plan for the sale of 83,900 shares of common stock, with no sales to be made prior to September 5, 2025 Director Trading Arrangement (Adopted May 29, 2025) | Name and Position | Action | Adoption Date | Rule 10b5-1 | Total Shares to be Sold | Expiration Date | | :---------------- | :----- | :------------ | :---------- | :---------------------- | :-------------- | | Douglas S. Prince, Director | Adopted | 5/29/2025 | X | 83,900 | November 20, 2025 | - No sales will be made under the adopted trading plan prior to September 5, 2025[223] ITEM 6: Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and certifications - Exhibits include Amended and Restated Certificate of Incorporation, Bylaws, Securities Purchase Agreement with Abbott Laboratories, and certifications under Sections 302 and 906 of the Sarbanes-Oxley Act[228] SIGNATURES The report is duly signed on behalf of Senseonics Holdings, Inc. by Rick Sullivan, Chief Financial Officer, on August 6, 2025 - The report was signed by Rick Sullivan, Chief Financial Officer, on August 6, 2025[232]