Going Concern and Liquidity Update	3 Months Ended
Mar. 31, 2020
Going Concern and Liquidity Update
Going Concern and Liquidity Update	2.Going Concern and Liquidity Update The Company’s operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, lack of operating history and uncertainty of future profitability. Since inception, the Company has suffered substantial operating losses, principally from expenses associated with the Company’s research and development programs and commercial launch of Eversense® CGM System (for use up to 90 days) in the United States and the Eversense CGM and Eversense XL CGM Systems (for use up to 180 days) in Europe, the Middle East, and Africa. The Company has not generated significant revenue from the sale of products and its ability to generate revenue and achieve profitability largely depends on the Company’s ability to successfully expand the commercialization of Eversense, continue the development of its products and product upgrades, and to obtain necessary regulatory approvals for the sale of those products, including approval by the FDA for the extended Eversense XL CGM system in the United States. These activities will require significant uses of working capital through 2020 and beyond. The Company generated a net loss of $42.6 million for the three months ended March 31, 2020 and had an accumulated deficit of $515.9 million at March 31, 2020. Following the repayment in full of its term loan with Solar Capital Ltd. (“Solar”) in the amount of $48.5 million on March 22, 2020, the Company had $18.8 million of cash, cash equivalents and restricted cash at March 31, 2020. As a result, and in consideration of the evolving impact of the coronavirus (“COVID-19”) pandemic, the Company made reductions in its cost structure to improve operating cash flow and generate future capital expenditure savings to ensure the long-term success of Eversense. Specifically, the Company temporarily suspended commercial sales of the Eversense CGM system in the United States to new patients and streamlined its operational strategy to focus on the development and regulatory submission efforts for its Eversense XL CGM system, for use for up to 180 days, in the United States. In connection with these actions, on March 26, 2020, the Company reduced its workforce by approximately 60%, over half of which were sales personnel. The Company is pursuing strategic alternatives and has been in discussions with new financing sources. Additional financing could include issuing additional equity (including through the Open Market Sales agreement with Jefferies) or either secured or unsecured indebtedness or a combination of both. Given its limited cash resources, and after inclusion of its subsequent financings described in Note 13 – Subsequent Events, and also considering the economic and market uncertainty resulting from COVID-19, the Company has substantial doubt regarding its ability to meet its obligations as they become due in the ordinary course of business for the next twelve months from the date of this Quarterly Report on Form 10-Q. The Company’s ability to generate enough cash to meet its streamlined working capital requirements is dependent on its ability to achieve additional capital sources and favorable outcomes from potential strategic alternatives currently being explored. New financings may not be available to the Company on commercially acceptable terms, or at all, and may be impacted by the current debt covenants. The Company’s plans to alleviate its substantial doubt about its ability to continue as a going concern assume that there will be no material adverse development in its business, liquidity, or capital requirements, or additional material adverse impacts from COVID-19.

2.Going Concern and Liquidity Update

The Company’s operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, lack of operating history and uncertainty of future profitability. Since inception, the Company has suffered substantial operating losses, principally from expenses associated with the Company’s research and development programs and commercial launch of Eversense® CGM System (for use up to 90 days) in the United States and the Eversense CGM and Eversense XL CGM Systems (for use up to 180 days) in Europe, the Middle East, and Africa. The Company has not generated significant revenue from the sale of products and its ability to generate revenue and achieve profitability largely depends on the Company’s ability to successfully expand the commercialization of Eversense, continue the development of its products and product upgrades, and to obtain necessary regulatory approvals for the sale of those products, including approval by the FDA for the extended Eversense XL CGM system in the United States. These activities will require significant uses of working capital through 2020 and beyond.

The Company generated a net loss of $42.6 million for the three months ended March 31, 2020 and had an accumulated deficit of $515.9 million at March 31, 2020. Following the repayment in full of its term loan with Solar Capital Ltd. (“Solar”) in the amount of $48.5 million on March 22, 2020, the Company had $18.8 million of cash, cash equivalents and restricted cash at March 31, 2020. As a result, and in consideration of the evolving impact of the coronavirus (“COVID-19”) pandemic, the Company made reductions in its cost structure to improve operating cash flow and generate future capital expenditure savings to ensure the long-term success of Eversense. Specifically, the Company temporarily suspended commercial sales of the Eversense CGM system in the United States to new patients and streamlined its operational strategy to focus on the development and regulatory submission efforts for its Eversense XL CGM system, for use for up to 180 days, in the United States. In connection with these actions, on March 26, 2020, the Company reduced its workforce by approximately 60%, over half of which were sales personnel.

The Company is pursuing strategic alternatives and has been in discussions with new financing sources. Additional financing could include issuing additional equity (including through the Open Market Sales agreement with Jefferies) or either secured or unsecured indebtedness or a combination of both.

Given its limited cash resources, and after inclusion of its subsequent financings described in Note 13 – Subsequent Events, and also considering the economic and market uncertainty resulting from COVID-19, the Company has substantial doubt regarding its ability to meet its obligations as they become due in the ordinary course of business for the next twelve months from the date of this Quarterly Report on Form 10-Q. The Company’s ability to generate enough cash to meet its streamlined working capital requirements is dependent on its ability to achieve additional capital sources and favorable outcomes from potential strategic alternatives currently being explored. New financings may not be available to the Company on commercially acceptable terms, or at all, and may be impacted by the current debt covenants. The Company’s plans to alleviate its substantial doubt about its ability to continue as a going concern assume that there will be no material adverse development in its business, liquidity, or capital requirements, or additional material adverse impacts from COVID-19.