10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number: 001-37717

Senseonics Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 3841
(Primary Standard Industrial
Classification Code Number) 47-1210911
(I.R.S. Employer
Identification Number)

20451 Seneca Meadows Parkway

Germantown, MD 20876-7005

(301) 515-7260

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	SENS	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 479,871,695 shares of common stock, par value $0.001, outstanding as of May 5, 2023.

TABLE OF CONTENTS

PART I: Financial Information
ITEM 1: Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for three months ended March 31, 2023 and 2022	4
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three months ended March 31, 2023 and 2022	5
Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022	6
Notes to Unaudited Condensed Consolidated Financial Statements	7
ITEM 2: Management Discussion and Analysis of Financial Condition and Results of Operations	24
ITEM 3: Quantitative and Qualitative Disclosures About Market Risk	33
ITEM 4: Controls and Procedures	33
PART II: Other Information	34
ITEM 1: Legal Proceedings	34
ITEM 1A: Risk Factors	34
ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds	34
ITEM 3: Defaults Upon Senior Securities	34
ITEM 4: Mine Safety Disclosures	34
ITEM 5: Other Information	34
ITEM 6: Exhibits	35
SIGNATURES	37

2

Senseonics Holdings, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

	March 31,		December 31,
	2023		2022
		(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	45,085	$	35,793
Short term investments, net		83,359		108,222
Accounts receivable, net		451		127
Accounts receivable, net - related parties		2,953		2,324
Inventory, net		8,195		7,306
Prepaid expenses and other current assets		6,293		7,428
Total current assets		146,336		161,200
Deposits and other assets		2,998		3,108
Long term investments, net		8,157		12,253
Property and equipment, net		1,042		1,112
Total assets	$	158,533	$	177,673
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	646	$	419
Accrued expenses and other current liabilities		12,808		14,616
Accrued expenses and other current liabilities, related parties		823		837
Note payable, current portion, net		—		15,579
Derivative liability, current portion		—		20
Total current liabilities		14,277		31,471
Long-term debt and notes payables, net		37,479		56,383
Derivative liabilities		2,081		52,050
Other liabilities		2,576		2,689
Total liabilities		56,413		142,593
Preferred stock and additional paid-in-capital, subject to possible redemption: $0.001 par value per share; 12,000 shares and 12,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022		37,656		37,656
Total temporary equity		37,656		37,656
Commitments and contingencies
Stockholders’ equity (deficit):
Common stock, $0.001 par value per share; 900,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 479,780,414 shares and 479,637,138 shares issued and outstanding as of March 31, 2023 and December 31, 2022		480		480
Additional paid-in capital		871,746		806,488
Accumulated other comprehensive loss		(220)		(678)
Accumulated deficit		(807,542)		(808,866)
Total stockholders’ equity (deficit)		64,464		(2,576)
Total liabilities and stockholders’ equity (deficit)	$	158,533	$	177,673

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

Senseonics Holdings, Inc.

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except share and per share data)

	Three Months Ended
	March 31,
	2023		2022
Revenue, net	$	313	$	292
Revenue, net - related parties		3,824		2,189
Total revenue		4,137		2,481
Cost of sales		3,723		1,954
Gross profit		414		527
Expenses:
Research and development expenses		12,405		7,804
Selling, general and administrative expenses		7,718		7,883
Operating loss		(19,709)		(15,160)
Other income (expense), net:
Interest income		1,108		93
Gain on fair value adjustment of option		—		21,701
Exchange related gain, net		18,776		—
Interest expense		(4,652)		(4,494)
Gain on change in fair value of derivatives		5,778		84,569
Impairment cost, net		—		30
Other income (expense)		23		(21)
Total other income (expense), net		21,033		101,878
Net Income		1,324		86,718
Other comprehensive income (loss)
Unrealized gain (loss) on marketable securities		458		(625)
Total other comprehensive gain (loss)		458		(625)
Total comprehensive income	$	1,782	$	86,093
Basic net income per common share	$	0.00	$	0.19
Basic weighted-average shares outstanding		497,473,222		455,942,886
Diluted net income (loss) per common share	$	0.00	$	(0.03)
Diluted weighted-average shares outstanding		540,532,813		605,198,839

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

Senseonics Holdings, Inc.

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (in thousands)

				Additional		Accumulated				Total		Series B
	Common Stock			Paid-In		Other		Accumulated		Stockholders'		Convertible
	Shares	Amount		Capital		Comprehensive Loss		Deficit		Equity (Deficit)		Preferred Stock Temporary Equity
Three months ended March 31, 2022:
Balance, December 31, 2021	447,282		447		765,215		(212)		(950,985)		(185,535)	$	—
Issuance of common stock, net of issuance costs	3,077		3		8,001		—		—		8,004		—
Exercise of stock options and warrants	9,084		9		162		—		—		171		—
Issued common stock for vested RSUs and ESPP purchase	3,786		4		58		—		—		62		—
Stock-based compensation expense	—		—		1,736		—		—		1,736		—
Net income	—		—		—		—		86,718		86,718		—
Other comprehensive loss, net of tax	—		—		—		(625)		—		(625)		—
Balance, March 31, 2022	463,229	$	463	$	775,172	$	(837)	$	(864,267)	$	(89,469)	$	—
Three months ended March 31, 2023:
Balance, December 31, 2022	479,637		480		806,488		(678)		(808,866)		(2,576)		37,656
Issuance of stock options, net of issuance costs	143		—		(65)		—		—		(65)		—
Issuance of warrants, net of issuance costs	—		—		63,542		—		—		63,542		—
Stock-based compensation expense	—		—		1,781		—		—		1,781		—
Net income	—		—		—		—		1,324		1,324		—
Other comprehensive income, net of tax	—		—		—		458		—		458		—
Balance, March 31, 2023	479,780	$	480	$	871,746	$	(220)	$	(807,542)	$	64,464	$	37,656

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

Senseonics Holdings, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

	Three Months Ended
	March 31,
	2023		2022
Cash flows from operating activities
Net income	$	1,324	$	86,718
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization expense		236		263
Non-cash interest expense (debt discount and deferred costs)		2,625		2,772
Gain on change in fair value of derivatives		(5,778)		(84,569)
Gain on fair value adjustment of option		—		(21,701)
Exchange related gain, net		(18,776)		—
Impairment of option, net		—		(30)
Stock-based compensation expense		1,781		1,736
Provision for inventory obsolescence and net realizable value		(15)		—
Other		56		—
Changes in assets and liabilities:
Accounts receivable		(953)		(2,056)
Prepaid expenses and other current assets		1,136		(1,411)
Inventory		(874)		(837)
Deposits and other assets		—		163
Accounts payable		227		886
Accrued expenses and other liabilities		(267)		(2,031)
Accrued interest		(315)		(62)
Operating lease liabilities		(255)		—
Net cash used in operating activities		(19,848)		(20,159)
Cash flows from investing activities
Capital expenditures		(57)		(137)
Purchase of marketable securities		(9,653)		—
Proceeds from sale and maturity of marketable securities		39,657		19,803
Net cash provided by investing activities		29,947		19,666
Cash flows from financing activities
Issuance of common stock, net		—		8,004
Proceeds issuance of stock options, net		(65)		233
Repayment of 2023 Note		(15,700)		—
Proceeds from issuance of warrants, net		14,958		—
Repayment of term loans		—		(2,194)
Net cash (used in) provided by financing activities		(807)		6,043
Net increase in cash and cash equivalents		9,292		5,550
Cash and cash equivalents, at beginning of period		35,793		33,461
Cash and cash equivalents, at ending of period	$	45,085	$	39,011
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	1,756	$	1,762
Supplemental disclosure of non-cash investing and financing activities
Property and equipment purchases included in accounts payable and accrued expenses		48		—
Issuance of warrant in exchange for PHC Notes		48,550		—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

Senseonics Holdings, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Organization and Nature of Operations

Senseonics Holdings, Inc., a Delaware corporation, is a medical technology company focused on the development and manufacturing of long-term, implantable continuous glucose monitoring (“CGM”) systems to improve the lives of people with diabetes by enhancing their ability to manage their disease with relative ease and accuracy.

Senseonics, Incorporated is a wholly owned subsidiary of Senseonics Holdings, Inc. and was originally incorporated on October 30, 1996 and commenced operations on January 15, 1997. Senseonics Holdings, Inc. and Senseonics, Incorporated are hereinafter collectively referred to as the “Company” unless otherwise indicated or the context otherwise requires.

2. Liquidity and Capital Resources

From its founding in 1996 until 2010, the Company has devoted substantially all of its resources to researching various sensor technologies and platforms. Beginning in 2010, the Company narrowed its focus to developing and refining a commercially viable glucose monitoring system. The Company has incurred substantial losses and cumulative negative cash flows from operations since its inception in October 1996 and expects to incur additional losses in the near future. We incurred total gross profit (loss) of $2.7 million, ($0.8) million, and ($17.4) million for the years ended December 31, 2022, 2021 and 2020, respectively. For the period ending March 31, 2023, the Company had gross profit of $0.4 million and an accumulated deficit of $807.5 million. To date, the Company has funded its operations principally through the issuance of preferred stock, common stock, convertible notes and debt. As of March 31, 2023, the Company had cash, cash equivalents and marketable securities of $136.6 million.

In November 2021, the Company entered into an Open Market Sale Agreement, (the “2021 Sales Agreement”) with Jefferies LLC (“Jefferies”), under which the Company could offer and sell, from time to time, at its sole discretion, shares of its common stock having an aggregate offering price of up to $150.0 million through Jefferies as its sales agent in an “at the market” offering. Jefferies will receive a commission up to 3.0% of the gross proceeds of any common stock sold through Jefferies under the 2021 Sales Agreement. During the three months ended March 31, 2023, the Company has not received any proceeds from the sale of shares of its common stock under the 2021 Sales Agreement. In 2022, Company received $34.4 million in net proceeds from the sale of 15,160,899 shares of its common stock under the 2021 Sales Agreement.

On November 9, 2020, the Company entered into an Equity Line Agreement (the “Equity Line Agreement”) with Energy Capital, LLC, a Florida limited liability company (“Energy Capital”), which provided that, upon the terms and subject to the conditions and limitations set forth therein, Energy Capital was committed to purchase up to an aggregate of $12.0 million of shares of the Company’s newly designated series B convertible preferred stock (the “Series B Preferred Stock”) at the Company’s request from time to time during the 24-month term of the Equity Line Agreement. Under the Equity Line Agreement, beginning January 21, 2021, subject to the satisfaction of certain conditions, including that the Company have less than $8.0 million of cash, cash equivalents and other available credit (aside from availability under the Equity Line Agreement), the Company had the right, at its sole discretion, to present Energy Capital with a purchase notice (each, a “Regular Purchase Notice”) directing Energy Capital (as principal) to purchase shares of Series B Preferred Stock at a price of $1,000 per share (not to exceed $4.0 million worth of shares) once per month, up to an aggregate of $12.0 million of the Company’s Series B Preferred Stock at a per share price (the “Purchase Price”) equal to $1,000 per share of Series B Preferred Stock, with each share of Series B Preferred Stock initially convertible into common stock, beginning six months after the date of its issuance, at a conversion price of $0.3951 per share, subject to customary anti-dilution adjustments, including in the event of any stock split. The Equity Line Agreement provided that the Company was not permitted to affect any Regular Purchase Notice under the Equity Line Agreement on any date where the closing price of the Company’s common stock on the NYSE American is less than $0.25 without the approval of Energy Capital. In addition, beginning on January 1, 2022, since there had been no sales of the Series B Preferred Stock pursuant to the Equity Line Agreement, Energy Capital had the right, at its sole

7

discretion, by its delivery to the Company of a Regular Purchase Notice, to purchase up to the $12.0 million of Series B Preferred Stock under the Equity Line Agreement at the Purchase Price. On November 7, 2022, Energy Capital exercised in full its right to purchase $12.0 million of Series B Preferred Stock. The excess of the Purchase Price and the fair value of the Energy Capital option in the total amount of $37.6 million was recorded in additional-paid-in-capital.

On August 9, 2020, the Company entered into a financing agreement with the parent company of Ascensia Diabetes Care Holdings AG (“Ascensia”), PHC Holdings Corporation (“PHC”), pursuant to which the Company issued $35.0 million in aggregate principal amount of Senior Secured Convertible Notes due on October 31, 2024 (the “PHC Notes”), to PHC. The Company also issued 2,941,176 shares of common stock to PHC as a financing fee. The Company also has the option to sell and issue PHC up to $15.0 million of convertible preferred stock on or before December 31, 2022, contingent upon obtaining U.S. Food and Drug Administration (“FDA”) approval for the 180-day Eversense product for marketing in the United States before such date. The Company successfully obtained FDA approval in February 2022 and the option was not exercised. As described in Note 11, on March 13, 2023, the Company entered into an Exchange Agreement (the “Exchange Agreement”) with PHC, pursuant to which PHC agreed to exchange (the “Exchange”) its $35.0 million aggregate principal amount of the PHC Notes, including all accrued and unpaid interest thereon, for a warrant (the “Exchange Warrant”) to purchase up to 68,525,311 shares of the Company’s common stock, $0.001 par value per share (the “Exchange Warrant Shares”). The Exchange Warrant is a “pre-funded” warrant with a nominal exercise price of $0.001 per Exchange Warrant Share. On March 31, 2023, the Exchange was consummated, and the Company issued the Exchange Warrant to PHC in consideration for the cancellation of the PHC Notes.

On March 13, 2023, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with PHC, pursuant to which the Company issued and sold to PHC in a private placement (the “Private Placement”) a warrant (the “Purchase Warrant”) to purchase 15,425,750 shares of the Company’s common stock, $0.001 par value per share (the “Purchase Warrant Shares”). The purchase price of the Purchase Warrant was approximately $0.97 per Purchase Warrant Share, representing the undiscounted, trailing 10-day volume weighted average price of the Company’s common stock through March 10, 2023. The Purchase Warrant is a “pre-funded” warrant with a nominal exercise price of $0.001 per Purchase Warrant Share. The issuance of the Purchase Warrants enabled PHC to maintain, as of the closing of the transaction, a 15% beneficial ownership for purposes of the Investor Rights Agreement, dated August 9, 2020, between the Company and PHC. The Private Placement closed on March 13, 2023 (the “Private Placement Closing Date”) and the Company received aggregate gross proceeds of $15.0 million, before deducting private placement expenses payable by the Company.

3. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Although the Company considers the disclosures in these unaudited consolidated financial statements to be adequate to make the information presented not misleading, certain information or footnote information normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted under the rules and regulations of the SEC. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of financial position at March 31, 2023, and December 31, 2022, results of operations, comprehensive income (loss), and changes in stockholder’s deficit for the three months ended March 31, 2023, and 2022 and cash flows for the three months ended March 31, 2023, and 2022 have been included. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 16, 2023. The interim results for March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023, or for any future interim periods.

The consolidated financial statements reflect the accounts of Senseonics Holdings, Inc. and its wholly owned operating subsidiary Senseonics, Incorporated. The Company views its operations and manages its business in one segment, glucose monitoring products. Operating segments are defined as components of an enterprise about which

8

separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. 

Certain prior year amounts have been reclassified to conform to the current-year presentation. An adjustment has been made to the Consolidated Statements of Operations and Comprehensive Income (Loss) to consolidate the line items Sales and marketing expenses and General and administrative expenses to Selling, general and administrative expenses in order to conform to current year presentation. These reclassifications had no effect on the reported results of operations.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to record expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. For available-for-sale debt securities in unrealized loss positions, the new standard requires allowances to be recorded instead of reducing the amortized cost of the investment. The Company currently holds investments in available-for-sale securities. The Company has not historically experienced collection issues or bad debts with trade receivables. Accordingly, the Company does not expect this to have a significant impact on its consolidated financial statements and related disclosures at this time. The Company adopted this guidance as of January 1, 2023 and its adoption did not have a material impact on the consolidated financial statements and related disclosures.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period. In the accompanying unaudited consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, recoverability of long-lived assets, deferred taxes and valuation allowances, fair value of investments, derivative assets and liabilities, obsolete inventory, warranty obligations, variable consideration related to revenue, bad debts, depreciable lives of property and equipment, and accruals for clinical study costs, which are accrued based on estimates of work performed under contract. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ from those estimates; however, management does not believe that such differences would be material.

Significant Accounting Policies

The accounting policies used by the Company in its presentation of interim financial results are consistent with those presented in Note 3 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

9

4. Revenue Recognition

The Company generates product revenue from sales of the Eversense system and related components and supplies to Ascensia, through a collaboration and commercialization agreement (the “Ascensia Commercialization Agreement”), third-party distributors in the European Union and to strategic fulfillment partners in the United States (collectively, the “Customers”), who then resell the products to health care providers and patients. Customers pay the Company for sales, regardless of whether or not the Customers resell the products to health care providers and patients. The Company’s policies for recognizing sales have not changed from those described in our Annual Report on Form 10-K for the year ended December 31, 2022.

Revenue by Geographic Region

The following table sets forth net revenue derived from the Company’s two primary geographical markets, the United States and outside of the United States, based on the geographic location to which the Company delivers the product, for the three months ended March 31, 2023 and 2022:

	March 31, 2023
			%
(Dollars in thousands)	Amount		of Total
Revenue, net:
United States	$	2,162	52.3	%
Outside of the United States		1,975	47.7
Total	$	4,137	100.0	%
	Three Months Ended
	March 31, 2022
			%
(Dollars in thousands)	Amount		of Total
Revenue, net:
United States	$	767	30.9	%
Outside of the United States		1,714	69.1
Total	$	2,481	100.0	%

Contract Assets

Contract assets consist of unbilled receivables from customers and are recorded at net realizable value and relate to the revenue share variable consideration from the Ascensia Commercialization Agreement. Accounts receivable – related parties, net as of March 31, 2023, and December 31, 2022 included unbilled accounts receivable of $1.5 million and $1.7 million, respectively. The Company expects to invoice and collect all unbilled accounts receivable within 12 months.

Concentration of Revenue and Customers

For the three months ended March 31, 2023 and 2022, the Company derived 92% and 88%, respectively, of its total revenue from one customer, Ascensia. Revenues for these corresponding periods represent sales of sensors, transmitters and miscellaneous Eversense system components.

5. Net Income (Loss) per Share

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. An aggregate of 83,951,061 shares of common stock issuable upon the exercise of the Exchange Warrant Shares

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and the Purchase Warrant Shares held by PHC are included in the number of outstanding shares used for the computation of basic net income (loss) per share. Since the shares are issuable for little or no consideration, sometimes referred to as “penny warrants”, they are considered outstanding in the context of earnings per share, as discussed in ASC 260-10-45-13.

Dilutive net income (loss) per share is computed using the weighted average number of common shares outstanding during the period and, when dilutive, potential common share equivalents. Potentially dilutive common shares consist of shares issuable from restricted stock units, stock options, warrants and the Company’s convertible notes. Potentially dilutive common shares issuable upon vesting of restricted stock units and exercise of stock options and warrants are determined using the average share price for each period under the treasury stock method. Potentially dilutive common shares issuable upon conversion of the Company’s convertible notes are determined using the if converted method. The if-converted method assumes conversion of convertible securities at the beginning of the reporting period. Interest expense, dividends, and the changes in fair value measurement recognized during the period are added back to the numerator. The denominator includes the common shares issuable upon conversion of convertible securities.

In periods of net loss, all potentially dilutive common shares are excluded from the computation of the diluted net loss per share for those periods, as the effect would be anti-dilutive.

The following table sets forth the computation of basic and diluted net income (loss) per share for the periods shown:

		Three Months Ended March 31,
		2023		2022
Net income	$	1,324	$	86,718
Impact of conversion of dilutive securities		(2,293)		(104,575)
Dilutive Net loss	$	(969)	$	(17,857)
Net income (loss) per share
Basic	$	0.00	$	0.19
Diluted	$	(0.00)	$	(0.03)
Basic weighted average shares outstanding		497,473,222		455,942,886
Dilutive potential common stock outstanding
Stock-based awards		2,905,016		8,982,055
2023 Notes		—		4,617,646
2025 Notes		39,211,358		39,689,142
PHC Notes		—		65,151,893
Energy Capital Option		—		25,129,298
Warrants		943,217		5,685,919
Diluted weighted average shares outstanding		540,532,813		605,198,839

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Outstanding anti-dilutive securities not included in the diluted net income (loss) per share calculations were as follows:

	Three Months Ended March 31,
	2023	2022
Stock-based awards	16,484,020	9,877,143
PHC Option	—	24,959,156
Energy Capital Preferred Shares	30,372,058	—
Warrants	427,821	179,606
Total anti-dilutive shares outstanding	47,283,899	35,015,905

6. Marketable Securities

Marketable securities available for sale, were as follows (in thousands):

	March 31, 2023
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Commercial Paper	$	45,830		—		—	$	45,830
Corporate debt securities	$	13,327		—		(29)	$	13,298
Asset backed securities	$	8,223		—		(66)	$	8,157
Government and agency securities	$	24,356		—		(125)	$	24,231
Total	$	91,736	$	—	$	(220)	$	91,516

	December 31, 2022
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Commercial Paper	$	41,503		—		—	$	41,503
Corporate debt securities	$	32,331		—		(189)	$	32,142
Asset backed securities	$	8,363		—		(103)	$	8,260
Government and agency securities	$	38,956		—		(386)	$	38,570
Total	$	121,153	$	—	$	(678)	$	120,475

The following are the scheduled maturities as of March 31, 2023 (in thousands):

	Net		Fair
	Carrying Amount		Value
2023 (remaining nine months)	$	76,629	$	76,471
2024		8,364		8,361
2025		6,743		6,684
Total	$	91,736	$	91,516

The Company periodically reviews its portfolio of debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns. For debt securities where the fair value of the investment is less than the amortized cost basis, the Company assesses at the individual security level, for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment. Unrealized losses on available-for-sale securities at March 31, 2023 were not significant and were primarily due to changes in interest rates and not due to increased credit risk associated with specific securities. The Company does not intend to sell these impaired investments and it is not more likely than not that

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the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity.

7. Inventory, net

Inventory, net of reserves, consisted of the following (in thousands):

	March 31,		December 31,
	2023		2022
Finished goods	$	2,595	$	1,697
Work-in-process		4,074		4,057
Raw materials		1,526		1,552
Total	$	8,195	$	7,306

The Company charged less than $0.1 million to cost of sales for each of the three months ended March 31, 2023 and March 31, 2022 to reduce the value of inventory for items that are potentially obsolete due to expiry, in excess of product demand, or to adjust costs to their net realizable value.

8. Prepaid Expenses and Other Current Assets, and Deposits and other assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	March 31,		December 31,
	2023		2022
Contract manufacturing⁽¹⁾	$	3,868	$	4,097
Insurance		983		1,243
Clinical and Preclinical		695		924
Research and development		251		67
IT and software		133		189
Interest receivable		130		336
Sales and Marketing		113		158
Rent and utilities		106		132
Other		14		12
Accounting and Audit		—		270
Total prepaid expenses and other current assets	$	6,293	$	7,428

(1) Includes deposits to contract manufacturers for manufacturing process.

Deposits and other assets as of March 31, 2023 and December 31, 2022, were $3.0 million and $3.1 million, respectively. As of March 31, 2023, deposits and other assets is mainly comprised of $2.9 million for our right-of-use asset related to our operating lease of 33,000 square feet of research and office space for our corporate headquarters. In June 2022, the Company extended our lease for an additional five-year term.

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9. Accrued Expenses, Other Current Liabilities, and Other Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	March 31,		December 31,
	2023		2022
Research and development	$	4,926	$	3,502
Contract manufacturing		2,643		2,480
Professional and administration services		2,162		1,053
Compensation and benefits		1,521		4,699
Product warranty and replacement obligations		772		781
Operating lease		661		725
Interest on notes payable		560		2,050
Sales and marketing services		315		149
Other		71		14
Total accrued expenses and other current liabilities	$	13,631	$	15,453

Other liabilities as of March 31, 2023 and December 31, 2022, were $2.6 million and $2.7 million, respectively. Other liabilities is comprised of the non-current portion of our operating lease liability for our corporate headquarters. In June 2022, the Company extended our lease for an additional five-year term. We recorded a modification to the lease liability upon renewal to reflect our obligation to make the additional lease payments.

The current portion of our operating lease liability is included in the line-item accrued expenses and other current liabilities on our balance sheet. As of March 31, 2023 and December 31, 2022, the current portion of the operating lease liability was $0.7 million and $0.7 million, respectively.

10. Product Warranty Obligations

The Company provides a warranty of one year on its smart transmitters. Additionally, the Company may also replace Eversense system components that do not function in accordance with the product specifications. Estimated replacement costs are recorded at the time of shipment as a charge to cost of sales in the consolidated statement of operations and are developed by analyzing product performance data and historical replacement experience, including comparing actual replacements to revenue.

At each March 31, 2023, and December 31, 2022, the warranty reserve was $0.8 million and $0.8 million, respectively. The following table provides a reconciliation of the change in estimated warranty liabilities for the three months ended March 31, 2023, and for the twelve months ended December 31, 2022 (in thousands):

	March 31,		December 31,
	2023		2022
Balance at beginning of the period	$	781	$	723
Provision for warranties during the period		—		166
Settlements made during the period		(9)		(108)
Balance at end of the period	$	772	$	781

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11. Notes Payable, Preferred Stock and Stock Purchase Warrants

Term Loans

PPP Loan

On April 22, 2020, the Company received $5.8 million in loan funding from the PPP pursuant to the CARES Act, as amended by the Flexibility Act, and administered by the Small Business Administration (“SBA”). The unsecured loan (the “PPP Loan”) was evidenced by the PPP Note dated April 21, 2020 (the “PPP Note”) in the principal amount of $5.8 million with Silicon Valley Bank (“SVB”).

Under the terms of the PPP Note and the PPP Loan, interest accrued on the outstanding principal at a rate of 1.0% per annum. The term of the PPP Note was two years. In April 2022, the Company repaid the outstanding principal and accrued interest in full.

Convertible Preferred Stock and Warrants

On November 9, 2020, the Company entered into the Equity Line Agreement with Energy Capital, which provides that, upon the terms and subject to the conditions and limitations set forth therein, Energy Capital is committed to purchase up to an aggregate of $12.0 million of shares of the Company’s Series B Preferred Stock at the Company’s request from time to time during the 24-month term of the Equity Line Agreement. Under the Equity Line Agreement, beginning January 21, 2021, subject to the satisfaction of certain conditions, including the Company having less than $8 million of cash, cash equivalents and other available credit (aside from availability under the Equity Line Agreement), the Company has the right, at sole discretion, to present Energy Capital with a Regular Purchase Notice directing Energy Capital (as principal) to purchase shares of Series B Preferred Stock at a price of $1,000 per share (not to exceed $4.0 million worth of shares) once per month, up to an aggregate of $12.0 million of the Company’s Series B Preferred Stock at the Purchase Price equal to $1,000 per share of Series B Preferred Stock, with each share of Series B Preferred Stock initially convertible into common stock, beginning six months after the date of its issuance, at a conversion price of $0.3951 per share, subject to customary anti-dilution adjustments, including in the event of any stock split. The Equity Line Agreement provides that the Company shall not affect any Regular Purchase Notice under the Equity Line Agreement on any date where the closing price of the Company’s common stock on the NYSE American is less than $0.25 without the approval of Energy Capital. In addition, beginning on January 1, 2022, since there have been no sales of the Series B Preferred Stock pursuant to the Equity Line Agreement, Energy Capital has the right, at its sole discretion, by its delivery to the Company of a Regular Purchase Notice, to purchase up to the $12.0 million of Series B Preferred Stock under the Equity Line Agreement at the Purchase Price. On November 7, 2022, Energy Capital exercised in full its right to purchase $12.0 million of Series B Preferred Stock.

The Company accounted for the Equity Line Agreement as a put/call option (the “Energy Capital Option”). This put/call option was classified as a liability in accordance with ASC 480, Distinguishing liabilities from equity, on the Company’s balance sheet and was recorded at the estimated fair value of $4.2 million upon issuance. The put/call option was required to be remeasured to fair value at each reporting period with the change recorded in change in fair value of derivatives that is a component of other income (expense). In connection with the execution of the Equity Line Agreement, the Company incurred $7.6 million in debt issuance costs in fiscal year 2020. The fair value of the Energy Capital Option as of December 31, 2021 was $69.4 million. The Company adjusted the Energy Capital Option to its fair value of $25.7 million on the exercise date, recognizing a fair value adjustment gain of $43.7 million.

Concurrently with entry into the Equity Line Agreement, the Company issued a warrant to Energy Capital, exercisable beginning on May 9, 2021, to purchase up to 10,000,000 shares of common stock at an exercise price of $0.3951 per share (the “Warrant”). The Warrant was exercised on a net basis in February 2022 and Energy Capital received 8,917,535 shares of common stock upon the net exercise of the Warrants.

On March 13, 2023, pursuant to the Securities Purchase Agreement with PHC, the Company issued and sold to PHC in a Private Placement a Purchase Warrant to purchase 15,425,750 Purchase Warrant Shares. The Purchase Warrant is a “pre-funded” warrant with a nominal exercise price of $0.001 per Purchase Warrant Share. On the Private Placement

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Closing Date, the Company received aggregate gross proceeds of $15.0 million, before deducting private placement expenses payable by the Company. After issuance, all or any part of the Purchase Warrant shall be exercisable by the holder at any time and from time to time.

The Company determined that the Purchase Warrant shall be classified as equity in accordance with ASC Topic 480, Distinguishing Liabilities from Equity and ASC Topic 815. At issuance, the Company recorded the estimated fair value of the Purchase Warrant in the amount of $14.3 million as additional paid-in-capital in the Company’s consolidated balance sheets.

Because PHC was an existing stockholder of the Company at the time of the transaction, the $0.7 million excess of the purchase price over the fair value of the Purchase Warrant was recognized as an equity transaction and recorded as a capital contribution made by PHC to the Company as additional paid-in-capital in the Company’s consolidated balance sheets.

Additionally, on March 13, 2023, the Company entered into an Exchange Agreement with PHC, pursuant to which PHC agreed to exchange its $35.0 million aggregate principal amount of the PHC Notes, including all accrued and unpaid interest thereon, for the Exchange Warrant to purchase up to 68,525,311 Exchange Warrant Shares. The Exchange Warrant is a “pre-funded” warrant with a nominal exercise price of $0.001 per Exchange Warrant Share. After issuance, all or any part of the Purchase Warrant shall be exercisable by the holder at any time and from time to time. The number of Exchange Warrant Shares represents the number of shares of common stock previously issuable upon conversion of the PHC Notes, in accordance with the original terms of the notes, including a number of shares in respect of accrued and unpaid interest through the closing date, plus additional shares with a value of $675,000 reflecting a portion of the future interest payments forgone by PHC. On March 31, 2023 (6:00 am Japan Standard Time on April 1, 2023), the Exchange was consummated, and the Company issued the Exchange Warrant to PHC in consideration for the cancellation of the PHC Notes.

The Company determined that the Exchange Warrant shall be classified as equity in accordance with ASC 480 and ASC 815. At March 31, 2023, the Company recorded the estimated fair value of the Exchange Warrant in the amount of $48.6 million as additional paid-in-capital in the Company’s consolidated balance sheets.

As of March 31, 2023, the Purchase Warrant and the Exchange Warrant remained unexercised and outstanding. As they are prefunded warrants, the Company included the entirety of the warrant shares as weighted average outstanding shares in the calculation of its basic earnings per share.

Convertible Notes

PHC Notes

On August 9, 2020, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with PHC, as the purchaser (together with the other purchasers from time-to-time party thereto, the “Note Purchasers”) and Alter Domus (US) LLC, as collateral agent. Pursuant to the Note Purchase Agreement, the Company borrowed $35.0 million in aggregate principal through the issuance and sale of the PHC Notes on August 14, 2020 (the “Closing Date”). The Company also issued 2,941,176 shares of its common stock, $0.001 par value per share to PHC as a financing fee (the “Financing Fee Shares”) on the Closing Date. The Financing Fee Shares are accounted for as debt discount in the amount of $1.5 million.

The PHC Notes are senior secured obligations of the Company and will be guaranteed on a senior secured basis by the Company’s wholly owned subsidiary, Senseonics, Incorporated. Interest at the initial annual rate of 9.5% is payable semi-annually in cash or, at the Company’s option, payment in kind. The interest rate decreased to 8.0% in April 2022 as a result of the Company having obtained FDA approval for the 180-day Eversense E3 system for marketing in the United States. The maturity date for the PHC Notes is October 31, 2024 (the “Maturity Date”). The obligations under the PHC Notes are secured by substantially all of the Company’s and its subsidiary’s assets.

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The Note Purchasers are entitled to convert the PHC Notes to common stock at a conversion rate of 1,867.4136 shares per $1,000 principal amount of the PHC Notes (including any interest added thereto as payment in kind), equivalent to a conversion price of approximately $0.54 per share, subject to specified anti-dilution adjustments, including adjustments for the Company’s issuance of equity securities on or prior to April 30, 2022 below the conversion price. In addition, following a notice of redemption or certain corporate events that occur prior to the maturity date, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its PHC Notes in connection with such notice of redemption or corporate event. In certain circumstances, the Company will be required to pay cash in lieu of delivering make whole shares unless the Company obtains stockholder approval to issue such shares.

Subject to specified conditions, on or after October 31, 2022, the PHC Notes are redeemable by the Company if the closing sale price of the common stock exceeds 275% of the conversion price for a specified period of time and subject to certain conditions upon 10 days prior written notice at a cash redemption price equal to the then outstanding principal amount (including any payment in kind interest which has been added to such amount), plus any accrued but unpaid interest. On or after October 31, 2023, the PHC Notes are redeemable by the Company upon 10 days prior written notice at a cash redemption price equal to the then outstanding principal amount (including any payment in kind interest which has been added to such amount), plus any accrued but unpaid interest, plus a call premium of 130% if redeemed at least six months prior to the Maturity Date or a call premium of 125% if redeemed within six months of the Maturity Date.

The Note Purchase Agreement contains customary terms and covenants, including financial covenants, such as operating within an approved budget and achieving minimum revenue and liquidity targets, and negative covenants, such as limitations on indebtedness, liens, mergers, asset transfers, certain investing activities and other matters customarily restricted in such agreements. Most of these restrictions are subject to certain minimum thresholds and exceptions. The Note Purchase Agreement also contains customary events of default, after which the PHC Notes become due and payable immediately, including defaults related to payment compliance, material inaccuracy of representations and warranties, covenant compliance, material adverse changes, bankruptcy and insolvency proceedings, cross defaults to certain other agreements, judgments against the Company, change of control or delisting events, termination of any guaranty, governmental approvals, and lien priority.

The Company also has the option to sell and issue PHC up to $15.0 million of convertible preferred stock on or before December 31, 2022 (the “PHC Option”), which was initially contingent upon obtaining FDA approval for the 180-day Eversense product for marketing in the United States before such date, and which approval the Company successfully obtained in February 2022. The PHC option was not exercised and expired on December 31, 2022 and the Company recognized a loss on extinguishment of $0.1 million.

The Note Purchase Agreement also contained several provisions requiring bifurcation as a separate derivative liability including an embedded conversion feature, mandatory prepayment upon event of default that constitutes a breach of the minimum revenue financial covenant, optional redemption upon an event of default, change in interest rate after PMA approval and default interest upon an event of default. On the date of issuance, the Company recorded the fair value of the embedded features in the amount of $25.8 million as a derivative liability in the Company’s consolidated balance sheets in accordance with ASC 815. The derivative is adjusted to fair value at each reporting period, with the change in the fair value recorded in change in fair value of derivatives that is a component of other income (expense) in the Company’s consolidated statement of operations and comprehensive loss.

In connection with the issuance of the Note Purchase Agreement, the Company incurred $2.9 million in debt issuance costs and debt discounts. The associated debt issuance costs were recorded as a contra liability in the amount of $1.4 million and are deferred and amortized as additional interest expense over the term of the notes. There have been no conversions of PHC Notes since inception of the Note Purchase Agreement.

As described above, the Exchange Agreement with PHC was consummated on March 31, 2023, whereby PHC exchanged the PHC Notes in $35.0 million principal amount and all accrued and unpaid interest for the Exchange Warrant. On March 31, 2023, the Company was released from its obligation under the PHC Notes.

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Upon execution of the Exchange Agreement, the exercise of the original conversion feature of the PHC Notes became remote. Accordingly, the Company remeasured the embedded derivative to its fair value of $0. The Company recognized a change in fair value of the embedded derivative of $44.2 million in the caption “Exchange related gain, net” that is a component of other income (expense) in the Company’s consolidated statement of operations and comprehensive loss.

The Company accounted for the Exchange as an extinguishment of the PHC Notes, and thus, it derecognized the PHC Notes in its consolidated balance sheets and recognized a loss of $25.4 million as the difference between the carrying value plus accrued interest of the PHC Notes of $23.2 million and the $48.6 million fair value of the Exchange Warrant as an extinguishment loss in the caption “Exchange related gain, net” that is a component of other income (expense) in the Company’s consolidated statement of operations and comprehensive loss. As a result of the Exchange, the Company recognized a total net gain on exchange of the PHC notes of $18.8 million representing the gain on change in the fair value of the PHC Notes conversion feature recognized as an embedded derivative and the loss on extinguishment of the PHC Notes in exchange for the Exchange Warrant.

2025 Notes

In July 2019, the Company issued $82.0 million in aggregate principal amount of senior convertible notes that will mature on January 15, 2025 (the “2025 Notes”), unless earlier repurchased or converted. The 2025 Notes are convertible, at the option of the holders, into shares of the Company’s common stock, at an initial conversion rate of 757.5758 shares per $1,000 principal amount of the 2025 Notes (equivalent to an initial conversion price of approximately $1.32 per share).

The 2025 Notes also contained an embedded conversion option requiring bifurcation as a separate derivative liability, along with the fundamental change make-whole provision and the cash settled fundamental make-whole shares provision. The derivative is adjusted to fair value at each reporting period, with the change in the fair value recorded to other income (expense) in the Company’s consolidated statement of operations and comprehensive loss. The fair value of the derivative at March 31, 2023 and December 31, 2022 was $2.1 million and $7.9 million, respectively.

On April 24, 2020, $24.0 million aggregate principal of the Company’s outstanding 2025 Notes held by Highbridge Capital Management, LLC (“Highbridge”) were exchanged for (i) $15.7 million of Second Lien Notes (the “Second Lien Notes”), (ii) 11,026,086 shares of common stock, (iii) warrants to purchase up to 4,500,000 shares of common stock at an exercise price of $0.66 per share, and (iv) $0.3 million in accrued and unpaid interest on the 2025 Notes being exchanged. This transaction modified the original 2025 Notes outstanding with Highbridge and resulted in $13.2 million of deferred issuance fees and debt discounts associated with the exchanged 2025 Notes being transferred as a discount to the Second Lien Notes.

In January 2021, there were conversions of $6.5 million of outstanding principal amount of the 2025 notes for 4,924,998 shares of common stock. Accordingly, $3.2 million of allocated deferred issuance costs and debt discounts were recognized as a loss on extinguishment of debt. There were no conversions of 2025 Notes during the three months ended March 31, 2023.

2023 Notes

In the first quarter of 2018, the Company issued $53.0 million in aggregate principal amount of senior convertible notes due February 1, 2023 (the “2023 Notes”). In July 2019, the Company used the net proceeds from the issuance of the 2025 Notes to repurchase $37.0 million aggregate principal amount of the outstanding 2023 Notes. Each $1,000 of principal of the 2023 Notes is initially convertible into 294.1176 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $3.40 per share, subject to adjustment upon the occurrence of specified events. Holders may convert at any time prior to February 1, 2023. Holders who convert on or after the date that is six months after the last date of original issuance of the 2023 Notes but prior to February 1, 2021, may also be entitled to receive, under certain circumstances, an interest make-whole payment payable in shares of common stock. If specific corporate events occur prior to the maturity date, the Company will increase the conversion rate pursuant to the make-whole fundamental change provision for a holder who elects to convert their 2023 Notes in

18

connection with such an event in certain circumstances. Additionally, if a fundamental change occurs prior to the maturity date, holders of the 2023 Notes may require the Company to repurchase all or a portion of their 2023 Notes for cash at a repurchase price equal to 100% of the principal amount plus any accrued and unpaid interest.

The Company bifurcated the embedded conversion option, along with the interest make-whole provision and make-whole fundamental change provision, and in January 2018 recorded the embedded features as a debt discount and derivative liability in the Company’s consolidated balance sheets at its initial fair value of $17.3 million. Additionally, the Company incurred transaction costs of $2.2 million. The debt discount and transaction costs are being amortized to interest expense over the term of the 2023 Notes at an effective interest rate of 9.30%. The derivative is adjusted to fair value at each reporting period, with the change in the fair value recorded to other income (expense) in the Company’s consolidated statement of operations and comprehensive loss. On January 31, 2023, the Company repaid the outstanding principal and accrued interest in full. The derivative was unexercised upon maturity and the fair value in the amount of $0.02 million was recognized as an extinguishment gain in the caption “Other income (expense)” in Company’s consolidated statement of operations and comprehensive loss.

The following carrying amounts were outstanding under the Company’s notes payable as of March 31, 2023 and December 31, 2022 (in thousands):

	March 31, 2023
	Principal ($)	Debt Discount ($)	Issuance Costs ($)	Carrying Amount ($)
2025 Notes	51,199	(13,494)	(226)	37,479
	December 31, 2022
	Principal ($)	Debt Discount ($)	Issuance Costs ($)	Carrying Amount ($)
2023 Notes	15,700	(121)	-	15,579
2025 Notes	51,199	(15,029)	(252)	35,918
PHC Notes	35,000	(13,698)	(837)	20,465

Interest expense related to the notes payable for the three months ended March 31, 2023 and 2022 was as follows (dollars in thousands):

	Three Months Ended March 31, 2023
	Interest Rate	Interest ($)	Debt Discount and Fees ($)	Issuance Costs ($)	Total Interest Expense ($)
2023 Notes	5.25%	69	120	-	189
2025 Notes	5.25%	672	1,535	26	2,233
PHC Notes	8.00%	700	1,442	88	2,230
Total		1,441	3,097	114	4,652
	Three Months Ended March 31, 2022
	Interest Rate	Interest ($)	Debt Discount and Fees ($)	Issuance Costs ($)	Total Interest Expense ($)
2023 Notes	5.25%	206	333	-	539
2025 Notes	5.25%	658	1,274	21	1,953
PHC Notes	9.50%	831	1,076	66	1,973
PPP Loan	1.00%	5	-	-	5
Total		1,700	2,683	87	4,470

The following are the scheduled maturities of the Company’s notes payable as of March 31, 2023 (in thousands):

2023 (remaining nine months)	$	—
2024		—
2025		51,199
Total	$	51,199

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12. Stockholders’ Equity (Deficit)

In November 2021, the Company entered into the 2021 Sales Agreement with Jefferies, under which the Company could offer and sell, from time to time, at its sole discretion, shares of its common stock having an aggregate offering price of up to $150.0 million through Jefferies as the sales agent in an “at the market” offering. Jefferies will receive a commission up to 3.0% of the gross proceeds of any common stock sold through Jefferies under the 2021 Sales Agreement. In 2022, the Company received $34.4 million in net proceeds from the sale of 15,160,899 shares of its common stock under the 2021 Sales Agreement. There were no shares sold under the 2021 Sales Agreement during the three months ended March 31, 2023.

13. Stock-Based Compensation

2015 Plan

In December 2015, the Company adopted the 2015 Equity Incentive Plan (the “2015 Plan”), under which incentive stock options, non-qualified stock options and restricted stock units may be granted to the Company’s employees and certain other persons, such as officers and directors, in accordance with the 2015 Plan provisions. In February 2016, the Company’s Board of Directors adopted, and the Company’s stockholders approved, an Amended and Restated 2015 Equity Incentive Plan (the “Amended and Restated 2015 Plan”), which became effective on February 20, 2016. The Company’s Board of Directors may terminate the Amended and Restated 2015 Plan at any time. Options granted under the Amended and Restated 2015 Plan expire ten years after the date of grant.

Pursuant to the Amended and Restated 2015 Plan, the number of shares of the Company’s common stock reserved for issuance automatically increases on January 1 of each year, ending on January 1, 2026, by 3.5% of the total number of shares of its common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by its Board of Directors. As of March 31, 2023, 39,680,701 shares remained available for grant under the Amended and Restated 2015 Plan.

Inducement Plan

On May 30, 2019, the Company adopted the Senseonics Holdings, Inc. Inducement Plan (the “Inducement Plan”), pursuant to which the Company reserved 1,800,000 shares of the Company’s common stock for issuance. The only persons eligible to receive grants of awards under the Inducement Plan are individuals who satisfy the standards for inducement grants in accordance with NYSE American Company Guide Section 711(a), including individuals who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company. An “Award” is any right to receive the Company’s common stock pursuant to the Inducement Plan, consisting of non-statutory options, restricted stock unit awards and other equity incentive awards. As of March 31, 2023, 579,056 shares remained available for grant under the Inducement Plan.

Commercial Equity Plan

On January 30, 2023, the Company adopted the Senseonics Holdings, Inc. 2023 Commercial Equity Plan (the “Commercial Equity Plan”), pursuant to which the Company reserved 10,000,000 shares of common stock for issuance. Eligible recipients under the plan are non-employees of Senseonics, including employees of our global commercial partner, Ascensia, who assist with the commercialization of our products. An “Award” is any right to receive the Company’s common stock pursuant to the Commercial Equity Plan, consisting of non-statutory options and restricted stock unit awards. As of March 31, 2023, there were no grants made under the plan.

2016 Employee Stock Purchase Plan

In February 2016, the Company adopted the 2016 Employee Stock Purchase Plan, (the “2016 ESPP”). The 2016 ESPP became effective on March 17, 2016. The maximum number of shares of common stock that may be issued under the 2016 ESPP was initially 800,000 shares and automatically increases on January 1 of each year, ending on and

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including January 1, 2026, by 1.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year; provided, however, the Board of Directors may act prior to the first day of any calendar year to provide that there will be no January 1 increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year will be a lesser number of shares of common stock. As of March 31, 2023, there were 17,760,078 shares of common stock available for issuance under the 2016 ESPP. For the three months ended March 31, 2023, there were purchases of 86,816 shares of common stock pursuant to this plan.

The 2016 ESPP permits participants to purchase shares of the Company’s common stock through payroll deductions of up to 15% of their earnings. Unless otherwise determined by the administrator, the purchase price of the shares will be 85% of the lower of the fair market value of common stock on the first day of an offering or on the date of purchase. Participants may end their participation at any time and deductions not yet used in a purchase are refundable upon employment termination. The Company initiated its first 2016 ESPP offering period on August 1, 2019 and new offering periods occur every six months thereafter, each consisting of two purchase periods of six months in duration ending on or about January 31^st and July 31^st of each year. A participant may only be in one offering at a time. On February 1, 2020, there were 566,573 shares purchased in connection with the offering period. The 2016 ESPP contains an offering reset provision whereby if the fair market value of a share on offering date of an ongoing offering is less than or equal to the fair market value of a share on a new offering date, the ongoing offering will terminate immediately after the purchase date and rolls over to the new offering.

The 2016 ESPP is considered compensatory for financial reporting purposes.

1997 Plan

On May 8, 1997, the Company adopted the 1997 Stock Option Plan (the “1997 Plan”), under which incentive stock options, non-qualified stock options, and restricted stock awards may be granted to the Company’s employees and certain other persons in accordance with the 1997 Plan provisions. Approximately 1,223,273 shares of the Company’s common stock underlying options have vested under the 1997 Plan. Upon the effectiveness of the 2015 Plan, the Company no longer grants any awards under the 1997 Plan.

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14. Fair Value Measurements

The following table represents the fair value hierarchy of the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2023 and December 31, 2022 (in thousands):

	March 31, 2023
	Total		Level 1		Level 2		Level 3
Assets
Money market funds⁽¹⁾	$	39,197	$	39,197		—		—
Commercial paper		45,830		—		45,830		—
Corporate debt securities		13,298		—		13,298		—
Asset backed securities		8,157		—		8,157		—
Government and agency securities		24,231		19,750		4,481		—
Liabilities
Embedded features of the 2025 Notes		2,081		—		—		2,081

	December 31, 2022
	Total		Level 1		Level 2		Level 3
Assets
Money market funds⁽¹⁾	$	34,658	$	34,658		—		—
Commercial paper		41,503		—		41,503		—
Corporate debt securities		32,142		—		32,142		—
Asset backed securities		8,260		—		8,260		—
Government and agency securities		38,570		31,627		6,943		—
Liabilities
Embedded features of the 2023 Notes		20		—		20		—
Embedded features of the PHC Notes		44,191		—		—		44,191
Embedded features of the 2025 Notes		7,859		—		—		7,859

(1)Classified as cash and cash equivalents due to their short-term maturity

The following table provides a reconciliation of the beginning and ending net balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands):

	Level 3
	Instruments
December 31, 2022	$	52,050
Gain on change in fair value of embedded features of the PHC Notes		(44,191)
Gain on change in fair value of embedded features of the 2025 Notes		(5,778)
March 31, 2023	$	2,081

The recurring Level 3 fair value measurements of the embedded features of the notes payable and preferred stock, include the following significant unobservable inputs at March 31, 2023:

	2025 Notes
Unobservable Inputs	Assumptions
Stock price volatility	40.0 - 50.0	%
Probabilities of conversion provisions	5.0 - 95.0	%
Credit spread	13.24	%
Recovery rate	(1.26)	%
Dividend yield	-	%

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15. Income Taxes

The Company has not recorded any tax provision or benefit for the three months ended March 31, 2023 or March 31, 2022. The Company has provided a valuation allowance for the full amount of its net deferred tax assets since realization of any future benefit from deductible temporary differences, NOL carryforwards and research and development credits is not more-likely-than-not to be realized at March 31, 2023 and December 31, 2022.

16. Related Party Transactions

PHC has a noncontrolling ownership interest in the Company. In addition, PHC has representation on the Company’s board of directors. The Company entered into a financing agreement with PHC on August 9, 2020 and entered into an exchange agreement with PHC during 2023 (see Note 11 for further discussion). Ascensia, through the ownership interests of its parent company, PHC, is a related party. Revenue from Ascensia during the three months ended March 31, 2023 and March 31, 2022 was $3.8 million and $2.2 million, respectively.

The amount due from Ascensia as of March 31, 2023 and December 31, 2022 was $2.9 million and $2.3 million, respectively. The amount due to Ascensia as of March 31, 2023 and December 31, 2022 was $0.8 million and $0.9 million, respectively.

17. Subsequent Events

The Company has evaluated all subsequent events through the filing date of this Form 10-Q with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of March 31, 2023, and events which occurred subsequently but were not recognized in the financial statements. There were no subsequent events that required recognition or disclosure.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words or phrases “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” or similar expressions, or the negative of such words or phrases, are intended to identify “forward-looking statements.” We have based these forward-looking statements on our current expectations and projections about future events. Because such statements include risks, uncertainties, and assumptions, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include those described below and elsewhere in this Quarterly Report on Form 10-Q, and in our Annual Report on Form 10-K, particularly in Part I – Item 1A, “Risk Factors,” and our other filings with the Securities and Exchange Commission. Statements made herein are as of the date of the filing of this Quarterly Report on Form 10-Q with the Securities and Exchange Commission and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim, any obligation to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes that appear in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and related notes for the year ended December 31, 2022, which are included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2023. Unless otherwise indicated or the context otherwise requires, all references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section to the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to Senseonics Holdings, Inc. and its subsidiary.

Overview

We are a medical technology company focused on the development and manufacturing of glucose monitoring products designed to transform lives in the global diabetes community with differentiated, long-term implantable glucose management technology. Our implantable CGM (“Eversense”), including 90-day Eversense, Eversense XL and Eversense E3 CGM system versions are designed to continually and accurately measure glucose levels in people with diabetes via an under-the-skin sensor, a removable and rechargeable smart transmitter, and a convenient app for real-time diabetes monitoring and management for a period of up to six months in the case of Eversense XL and Eversense E3, as compared to seven to 14 days for non-implantable CGM systems. We affixed the CE mark to the original 90-day Eversense CGM system in June 2016, which marked the first certification for the product to be sold within the European Economic Area (being the European Union plus Norway, Iceland, and Liechtenstein) (“EEA”). Subsequently, we affixed the CE mark to the extended life Eversense XL CGM system in September 2017 to be sold in select markets in Europe and the Middle East. In June 2022, we affixed the CE mark to the extended life Eversense E3 CGM system and Ascensia began commercialization in select markets in Europe during the third quarter of 2022. In June 2018, the FDA, approved the 90-day Eversense CGM system for distribution throughout the United States. In June 2019, we received FDA approval for the non-adjunctive indication (dosing claim) for the 90-day Eversense system. With this approval and the availability of a new app in December 2019, the Eversense system can now be used as a therapeutic CGM in the United States to replace fingerstick blood glucose measurement to make treatment decisions, including insulin dosing. In February 2022, the 180-day extended life Eversense E3 CGM system was approved by the FDA and Ascensia began commercializing Eversense E3 in the United States in the second quarter of 2022.

Our net revenues are derived from sales of the Eversense system which is sold in two separate kits: the disposable Eversense Sensor Pack which includes the sensor, insertion tool, and adhesive patches, and the durable Eversense Smart Transmitter Pack which includes the transmitter and charger.

We sell directly to our network of distributors and strategic fulfillment partners, who provide the Eversense system to healthcare providers and patients through a prescribed request and invoice insurance payors for

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reimbursement. Sales of the Eversense system are widely dependent on the ability of patients to obtain coverage and adequate reimbursement from third-party payors or government agencies. We leverage and target regions where we have coverage decisions for patient device use and provider insertion and removal procedure payment. We have reached more than 250 million covered lives in the U.S. through positive insurance payor coverage decisions. In August 2022, we received positive payor coverage decision from Elevance Health, formerly Anthem, who has more than 45 million covered lives. On August 3, 2020, the Center for Medicare and Medicaid Services (“CMS”) released its Calendar Year 2021 Medicare Physician Fee Schedule Proposed Rule that announces proposed policy changes for Medicare payments, including the proposed establishment of national payment amounts for the three CPT© Category III codes describing the insertion (CPT 0446T), removal (0447T), and removal and insertion (0048T) of an implantable interstitial glucose sensor, which describes our Eversense CGM systems, as a medical benefit, rather than as part of the Durable Medical Equipment channel that includes other CGMs. In December 2021, CMS released its Calendar Year 2022 Medicare Physician Fee Schedule that updated global payments for the device cost and procedure fees. In July 2022, CMS provided temporary G-codes to enable immediate access to Eversense E3 for all eligible Medicare beneficiaries. In November 2022, CMS released its Calendar Year 2023 Medicare Physician Fee Schedule Proposed Rule that updates the payment amounts for the three CPT© Category III codes to account for the longer 6-month sensor.

In February 2020, we announced that the FDA approved a subgroup of PROMISE trial participants to continue for a total of 365 days to gather feasibility data on the safety and accuracy of a 365-day sensor. This sub-set of 30 participants was left undisturbed for 365 days with the goal of measuring accuracy and longevity over the full 365 days. Information gathered from this sub-set and additional development efforts provided us the confidence to start the Pivotal study for the Eversense 365-day System. The ENHANCE pivotal study for the Eversense 365-day system completed enrollment in the third quarter of 2022 and we expect to have data in the second half of 2023.

We are in the early commercialization stages of the Eversense brand and are focused on driving awareness of our CGM system amongst intensively managed patients and their healthcare providers. In both the United States and our overseas markets, we have entered into strategic partnerships and distribution agreements that allow third party collaborators with direct sales forces and established distribution systems to market and promote Senseonics CGM systems, including 90-day Eversense, Eversense XL, Eversense E3 and future generation products.

United States Development and Commercialization of Eversense

In 2016, we completed our PRECISE II pivotal clinical trial in the United States. This trial, which was fully enrolled with 90 subjects, was conducted at eight sites in the United States. In the trial, we measured the accuracy of Eversense measurements through 90 days after insertion. We also assessed safety through 90 days after insertion or through sensor removal. In the trial, we observed a mean absolute relative difference (“MARD”), of 8.5% utilizing two calibration points for Eversense across the 40-400 mg/dL range when compared to YSI blood reference values during the 90-day continuous wear period. Based on the data from this trial, in October 2016 we submitted a pre-market approval (“PMA”) application to the FDA to market Eversense in the United States for 90-day use. On June 21, 2018, we received PMA approval from the FDA for the Eversense system. In July 2018, we began distributing the 90-day Eversense system directly in the United States through our own direct sales and marketing organization. We have received Category III CPT codes for the insertion and removal of the Eversense sensor.

In December 2018, we initiated the PROMISE pivotal clinical trial to evaluate the safety and accuracy of Eversense for a period of up to six months in the United States and in September 30, 2019, we completed enrollment of the PROMISE trial. In the trial, we observed performance matching that of the then current Eversense 90-day product available in the United States, with a MARD of 8.5%. This result was achieved with reduced calibration, down to one per day, while also doubling the sensor life to six months. Following the results of the PROMISE trial, on September 30, 2020, a PMA supplement application to extend the wearable life of the Eversense CGM System to six months was submitted to the FDA. In February 2022, the extended life Eversense E3 CGM system was approved by the FDA.

In June 2019, we received FDA approval for the non-adjunctive indication (dosing claim) for the Eversense system and launched with an updated app in December 2019. With this approval, the Eversense system can be used as a therapeutic CGM to replace fingerstick blood glucose measurement for treatment decisions, including insulin dosing.

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On February 26, 2020, we announced that the FDA approved a subgroup of PROMISE trial participants to continue for a total of 365 days to gather feasibility data on the safety and accuracy of a 365-day sensor. This sub-set of 30 participants were left undisturbed for 365 days with the goal of measuring accuracy and longevity over the full 365 days. Information gathered from this sub-set and additional development efforts provided us the confidence to start the Pivotal study for the Eversense 365 System.

In April 2020, we announced that we received an extension to our CE Certificate of Conformity in the EEA such that the Eversense XL is no longer contraindicated for MRI, which means the sensor does not need to be removed from under the skin during MRI scanning. We had previously obtained this indication for Eversense in the United States in 2019. This MRI approval is a first for the CGM category, as all other sensors are required to be removed during an MRI scan.

On August 9, 2020, we entered into a collaboration and commercialization agreement with Ascensia (the “Commercialization Agreement”) pursuant to which we granted Ascensia the exclusive right to distribute our 90-day Eversense CGM system and our 180-day Eversense E3 CGM system worldwide, with the following initial exceptions: (i) until January 31, 2021, the territory did not include countries covered by our then existing distribution agreement with Roche Diagnostics International AG and Roche Diabetes Care GmbH (together “Roche”), which are the Europe, Middle East and Asia, excluding Scandinavia and Israel, and 17 additional countries, including Brazil, Russia, India and China, as well as select markets in the Asia Pacific and Latin American regions; (ii) until September 13, 2021, the territory did not include countries covered by our current distribution agreement with Rubin Medical, which are Sweden, Norway and Denmark; and (iii) until May 31, 2022, the territory did not include Israel. Pursuant to the Commercialization Agreement, in the United States, Ascensia began providing sales support for the 90-day Eversense product on October 1, 2020 and Ascensia ramped up sales activities and assumed commercial responsibilities for the 90-day Eversense product during the second quarter of 2021.

In February 2022, we received approval from the FDA for the Eversense E3 CGM System. The approval for our third-generation sensor, with proprietary sacrificial boronic acid (“SBA”) technology doubles the sensor life to six months with MARD of 8.5%. Ascensia began commercializing Eversense E3 in the United States during the second quarter of 2022.

The ENHANCE clinical study was initiated as a pivotal study with the purpose of gathering additional clinical data to support an integrated continuous glucose monitoring (iCGM) submission for the Eversense E3 system using the SBA technology. In March 2022, we extended the ongoing ENHANCE clinical study to evaluate the safety and accuracy of the Eversense 365 System for a period of up to one year in the United States. In September 2022, we completed enrollment of the ENHANCE study. In November 2022, we submitted and in the first quarter of 2023 we received approval of an IDE for the enrollment of a pediatric cohort in the ENHANCE study. We began to enroll pediatric patients during the second quarter of 2023.

European Commercialization of Eversense

In September 2017, we affixed the CE mark for Eversense XL which indicates that the product may be sold freely in any part of the European Economic Area (“EEA”). The Eversense XL is indicated for a sensor life of up to 180 days. Eversense XL began commercialization in Europe in the fourth quarter of 2017. All such commercialization and marketing activities remain subject to applicable government approvals.

In May 2016, we entered into a distribution agreement with Roche. Pursuant to the agreement, as amended, we had granted Roche the exclusive right to market, sell and distribute Eversense in the EMEA, excluding Scandinavia and Israel. In addition, Roche had exclusive distribution rights in 17 additional countries, including Brazil, Russia, India and China, as well as select markets in the Asia Pacific and Latin American regions. Roche was obligated to purchase from us specified minimum volumes of Eversense XL CGM components at pre-determined prices. On November 30, 2020, we entered into a final amendment and settlement agreement with Roche to facilitate the transition of distribution to Ascensia as sales concluded on January 31, 2021, including final purchases, and transition support activities. The distribution rights under the agreement expired January 31, 2021.

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In June 2022, we affixed the CE mark to the extended life Eversense E3 CGM system, and Ascensia began commercialization in European markets during the second half of 2022.

Financial Overview

Revenue

We generate product revenue from sales of the Eversense system and related components and supplies to Ascensia, through the Commercialization Agreement, third-party distributors in the European Union and to strategic fulfillment partners in the United States (collectively “Customers”), who then resell the products to health care providers and patients. We are paid for our sales directly to the Customers, regardless of whether or not the Customers resell the products to health care providers and patients.

Revenue from product sales is recognized at a point in time when the Customers obtain control of our product based upon the delivery terms as defined in the contract at an amount that reflects the consideration which we expect to receive in exchange for the product. Contracts with our distributors contain performance obligations, mostly for the supply of goods, and is typically satisfied upon transfer of control of the product. Customer contracts do not include the right to return unless there is a product issue, in which case we may provide replacement product. Product conformity guarantees do not create additional performance obligations and are accounted for as warranty obligations in accordance with guarantee and loss contingency accounting guidance.

Our contracts may contain some form of variable consideration such as prompt-pay discounts, tier-volume price discounts and for the Ascensia commercial agreement, revenue share. Variable consideration, such as discounts and prompt-pay incentives, are treated as a reduction in revenue and variable considerations, such as revenue share, is treated as an addition in revenue when the product sale is recognized. The amount of variable consideration that is included in the transaction price may be constrained and is included in revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period, when the uncertainty associated with the variable consideration is subsequently resolved. Estimating variable consideration and the related constraint requires the use of management judgment. Depending on the variable consideration, we develop estimates for the expected value based on the terms of the agreements, historical data, geographic mix, reimbursement rates, and market conditions.

Contract assets consist of unbilled receivables from customers and are recorded at net realizable value and relate to the revenue share variable consideration from the Ascensia Commercialization Agreement.

Concentration of Revenue and Customers

For the three months ended March 31, 2023 and 2022, we derived the majority of our total net revenue from one customer, Ascensia. During the three months ended March 31, 2023 and 2022, we derived 92% and 88%, respectively, of our total revenue from Ascensia. Revenues for these corresponding periods represent sales of sensors, transmitters and miscellaneous Eversense system components.

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Revenue by Geographic Region

The following table sets forth net revenue derived from our two primary geographical markets, the United States and outside of the United States, based on the geographic location to which we deliver the product, for three months ended March 31, 2023 and 2022:

	Three Months Ended March 31, 2023
			%
(Dollars in thousands)	Amount		of Total
Revenue, net:
United States	$	2,162	52.3	%
Outside of the United States		1,975	47.7
Total	$	4,137	100.0	%
	Three Months Ended
	March 31, 2022
			%
(Dollars in thousands)	Amount		of Total
Revenue, net:
United States	$	767	30.9	%
Outside of the United States		1,714	69.1
Total	$	2,481	100.0	%

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Results of Operations for the Three Months Ended March 30, 2023 and 2022

	Three Months Ended
	March 31,				Period-to-
	2023		2022		Period Change
	(in thousands)					(in thousands)
Revenue, net	$	313	$	292	$	21
Revenue, net - related parties		3,824		2,189		1,635
Total revenue		4,137		2,481		1,656
Cost of sales		3,723		1,954		1,769
Gross profit		414		527		(113)
Expenses:
Research and development expenses		12,405		7,804		4,601
Selling, general and administrative expenses		7,718		7,883		(165)
Operating loss		(19,709)		(15,160)		(4,549)
Other income (expense), net:
Interest income		1,108		93		1,015
Gain on fair value adjustment of option		—		21,701		(21,701)
Exchange related gain, net		18,776		—		18,776
Interest expense		(4,652)		(4,494)		(158)
Gain on change in fair value of derivatives		5,778		84,569		(78,791)
Impairment cost, net		—		30		(30)
Other income (expense)		23		(21)		44
Total other income (expense), net		21,033		101,878		(80,845)
Net income	$	1,324	$	86,718	$	(85,394)

Total revenue

Our total revenue increased to $4.1 million for the three months ended March 31, 2023, compared to $2.5 million for the three months ended March 31, 2022. This increase was primarily due to the launch of Eversense E3 in the United States and outside of the United States.

Cost of sales and gross profit

Our cost of sales increased to $3.8 million for the three months ended March 31, 2023, compared to $2.2 million for the three months ended March 31, 2022. Our gross profit decreased to $0.4 million for the three months ended March 31, 2023, compared to $0.5 million for the three months ended March 31, 2022. Gross profit as a percentage of revenue, or gross margin, was 10.0% and 21.2% for the three months ended March 31, 2023 and March 31, 2022, respectively. The reduction in gross margin was primarily driven by sales channel mix and increased manufacturing and logistics costs.

Research and development expenses

Research and development expenses were $12.4 million for the three months ended March 31, 2023, compared to $7.8 million for the three months ended March 31, 2022, an increase of $4.6 million. The increase was due to investments for next generation technologies including a $2.9 million increase in clinical studies activities, an increase of $0.7 million in personnel related costs due to the expansion of our research and development workforce and an increase of $1.0 million for consulting, contract fabrication and other research and development support services.

Selling, general and administrative expenses

Selling, general and administrative expenses were $7.7 million for the three months ended March 31, 2023, compared to $7.9 million for three months ended March 31, 2022, a decrease of $0.2 million. The decrease was primarily

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the result of a $0.6 million reduction in spend related to personnel costs, general administrative costs, subscriptions and selling and marketing consulting services. This decrease was partially offset by a $0.4 million increase in selling and marketing programs and professional fees.

Total other income (expense), net

Total other income, net, was $21.0 million for the three months ended March 31, 2023, compared to other income, net, of $101.9 million for the three months ended March 31, 2022, a decrease in other income of $80.8 million. The change was primarily due to a $21.7 million change in the fair value adjustment of options, and a $78.8 million change in the fair value of derivatives, partially offset by a $18.8 million net gain on the exchange of the PHC notes and an increase in interest income (expense), net, of $0.9 million.

Liquidity and Capital Resources

Sources of Liquidity

From its founding in 1996 until 2010, the Company has devoted substantially all of its resources to researching various sensor technologies and platforms. Beginning in 2010, the Company narrowed its focus to developing and refining a commercially viable glucose monitoring system. The Company has incurred substantial losses and cumulative negative cash flows from operations since its inception in October 1996 and expects to incur additional losses in the near future. We incurred total gross profit of $2.7 million, ($0.8) million, and ($17.4) million for the years ended December 31, 2022, 2021 and 2020, respectively. For the period ending March 31, 2023, the Company had gross profit of $0.4 million and an accumulated deficit of $807.5 million. To date, the Company has funded its operations principally through the issuance of preferred stock, common stock, convertible notes and debt. As of March 31, 2023, the Company had cash, cash equivalents and marketable securities of $136.6 million.

In November 2021, we entered into the 2021 Sales Agreement with Jefferies, under which we could offer and sell, from time to time, at our sole discretion, shares of our common stock having an aggregate offering price of up to $150.0 million through Jefferies as our sales agent in an “at the market” offering. Jefferies will receive a commission up to 3.0% of the gross proceeds of any common stock sold through Jefferies under the 2021 Sales Agreement. During the three months ended March 31, 2023, the Company has not received any proceeds from the sale of shares of its common stock under the 2021 Sales Agreement. In 2022, Company received $34.4 million in net proceeds from the sale of 15,160,899 shares of its common stock under the 2021 Sales Agreement

On November 9, 2020, the Company entered into the Equity Line Agreement with Energy Capital which provided that, upon the terms and subject to the conditions and limitations set forth therein, Energy Capital was committed to purchase up to an aggregate of $12.0 million of shares of the Company’s newly designated Series B Preferred Stock at the Company’s request from time to time during the 24-month term of the Equity Line Agreement. Under the Equity Line Agreement, beginning January 21, 2021, subject to the satisfaction of certain conditions, including that the Company have less than $8.0 million of cash, cash equivalents and other available credit (aside from availability under the Equity Line Agreement), the Company had the right, at its sole discretion, to present Energy Capital with a Regular Purchase Notice directing Energy Capital (as principal) to purchase shares of Series B Preferred Stock at a price of $1,000 per share (not to exceed $4.0 million worth of shares) once per month, up to an aggregate of $12.0 million of the Company’s Series B Preferred Stock at a per share price (the “Purchase Price”) equal to $1,000 per share of Series B Preferred Stock, with each share of Series B Preferred Stock initially convertible into common stock, beginning six months after the date of its issuance, at a conversion price of $0.3951 per share, subject to customary anti-dilution adjustments, including in the event of any stock split. The Equity Line Agreement provided that the Company was not permitted to affect any Regular Purchase Notice under the Equity Line Agreement on any date where the closing price of the Company’s common stock on the NYSE American is less than $0.25 without the approval of Energy Capital. In addition, beginning on January 1, 2022, since there had been no sales of the Series B Preferred Stock pursuant to the Equity Line Agreement, Energy Capital had the right, at its sole discretion, by its delivery to the Company of a Regular Purchase Notice, to purchase up to the $12.0 million of Series B Preferred Stock under the Equity Line Agreement at the Purchase Price. On November 7, 2022, Energy Capital exercised in full its right to purchase $12.0 million of Series B

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Preferred Stock. The excess of the Purchase Price and the fair value of the Energy Capital option in the total amount of $37.6 million was recorded in additional-paid-in-capital.

On August 9, 2020, the Company entered into a financing agreement with PHC, pursuant to which the Company issued $35.0 million in aggregate principal amount of Senior Secured Convertible Notes due on October 31, 2024 (the “PHC Notes”), to PHC. The Company also issued 2,941,176 shares of common stock to PHC as a financing fee. The Company also has the option to sell and issue PHC up to $15.0 million of convertible preferred stock on or before December 31, 2022, contingent upon obtaining FDA approval for the 180-day Eversense product for marketing in the United States before such date. The Company successfully obtained FDA approval in February 2022 and the option was not exercised.

On March 13, 2023, the Company entered into an Exchange Agreement with PHC, pursuant to which PHC agreed to exchange its $35.0 million aggregate principal amount of the PHC Notes, including all accrued and unpaid interest thereon, for the Exchange Warrant to purchase up to 68,525,311 Exchange Warrant Shares. The Exchange Warrant is a “pre-funded” warrant with a nominal exercise price of $0.001 per Exchange Warrant Share. The number of Exchange Warrant Shares represents the number of shares of common stock previously issuable upon conversion of the PHC Notes, in accordance with the original terms of the notes, including a number of shares in respect of accrued and unpaid interest through the closing date, plus additional shares with a value of $675,000 reflecting a portion of the future interest payments forgone by PHC. On March 31, 2023, the Exchange was consummated, and the Company issued the Exchange Warrant to PHC in consideration for the cancellation of the PHC Notes.

On March 13, 2023, the Company entered into a Securities Purchase Agreement with PHC, pursuant to which the Company issued and sold to PHC in a private placement a Purchase Warrant to purchase an aggregate of 15,425,750 Purchase Warrant Shares. The purchase price of the Purchase Warrant was approximately $0.97 per Purchase Warrant Share, representing the undiscounted, trailing 10-day volume weighted average price of the Company’s common stock through March 10, 2023. The Purchase Warrant is a “pre-funded” warrant with a nominal exercise price of $0.001 per Purchase Warrant Share. The issuance of the Purchase Warrants enabled PHC to maintain, as of the closing of the transaction, a 15% beneficial ownership for purposes of the Investor Rights Agreement, dated August 9, 2020, between the Company and PHC.

On the Private Placement Closing Date, the Company received aggregate gross proceeds of $15.0 million, before deducting private placement expenses payable by the Company.

Common Stock

In November 2021, we entered into the 2021 Sales Agreement with Jefferies, under which we could offer and sell, from time to time, at our sole discretion, shares of our common stock having an aggregate offering price of up to $150.0 million through Jefferies as the sales agent in an “at the market” offering. Jefferies will receive a commission up to 3.0% of the gross proceeds of any common stock sold through Jefferies under the 2021 Sales Agreement. During the three months ended March 31, 2023, we did not sell any shares of our common stock under the 2021 Sales Agreement.

Indebtedness

Term Loans

PPP Loan

On April 22, 2020, we received $5.8 million in loan funding from the PPP pursuant to the CARES Act, as amended by the Flexibility Act, and administered by the Small Business Administration (“SBA”). The unsecured loan PPP Loan was evidenced by the PPP Note, in the principal amount of $5.8 million with Silicon Valley Bank (“SVB”).

Under the terms of the PPP Note and the PPP Loan, interest accrued on the outstanding principal at a rate of 1.0% per annum. The term of the PPP Note was two years. In April 2022, the Company repaid the outstanding principal and accrued interest in full.

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Convertible Notes

The following table summarizes our outstanding convertible notes at March 31, 2023:

				Aggregate				Initial Conversion		Conversion Price
Convertible	Issuance			Principal		Maturity		Rate per $1,000		per Share of
Note	Date	Coupon		(in millions)		Date		Principal Amount		Common Stock
2025 Notes	July 1, 2019		5.25%	$	51.2		January 15, 2025		757.5758	$	1.32

For additional information on the 2023 Notes, see Note 11—Notes Payable, Preferred Stock and Stock Purchase Warrants in the accompanying unaudited consolidated financial statements.

Funding Requirements and Outlook

Our ability to grow revenues and achieve profitability depends on the successful commercialization and adoption of our Eversense CGM systems by diabetes patients and healthcare providers, along with future product development, regulatory approvals, and post-approval requirements. These activities, including our ongoing focus to grow covered lives through positive insurance payor policy decisions and continued development of Eversense 365-day product, will require significant uses of working capital through 2023 and beyond.

We believe that our existing agreements, including the recent transactions with PHC, evidence the mutual commitment of PHC and the Company to support the commercialization of Eversense and specifically for the Company, provide the financial resources for manufacturing of Eversense and continued product development. We expect that existing cash, cash equivalents and cash flows from our future operations will be sufficient to meet the Company’s current operating plans through 2024. As part of our liquidity strategy, we will continue to monitor our capital structure and operating plans and we may access the capital markets or debt markets for additional funding if the opportunity arises to enhance our capital structure for changes to our operating plans, for financing strategic initiatives and to provide financial flexibility.

Cash Flows

The following is a summary of cash flows for each of the periods set forth below (in thousands).

	Three Months Ended
	March 31,
	2023		2022
Net cash used in operating activities	$	(19,848)	$	(20,159)
Net cash provided by investing activities		29,947		19,666
Net cash (used in) provided by financing activities		(807)		6,043
Net increase in cash and cash equivalents	$	9,292	$	5,550

Net cash used in operating activities

Net cash used in operating activities was $19.8 million for the three months ended March 31, 2023 and consisted of a $18.8 million net gain on the exchange of the PHC Notes, a $5.8 million gain on change in the fair value of the 2025 Notes embedded derivative, a net change in operating assets and liabilities of $1.3 million, partially offset by net income of $1.3 million, $3.0 million related to depreciation/amortization and other non-cash items, and $1.8 million of stock-based compensation.

Net cash used in operating activities was $20.2 million for the three months ended March 31, 2022 and

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consisted of an $84.6 million change in fair value of derivatives on convertible notes, a $21.7 million gain on fair value adjustment of the option, and a net change in operating assets and liabilities of $5.3 million, partially offset by net income of $86.7 million, $3.0 million related to depreciation/amortization and non-cash interest expense and $1.7 million of stock-based compensation.

Net cash provided by investing activities

Net cash provided by investing activities was $30.0 million for the three months ended March 31, 2023 and primarily consisted of $39.7 million in proceeds from the sale and maturity of marketable securities, partially offset by $9.7 million in purchase of marketable securities and capital expenditures.

Net cash provided by investing activities was $19.7 million for the three months ended March 31, 2022 and primarily consisted of proceeds from the sale and maturity of marketable securities.

Net cash provided (used in) by financing activities

Net cash used in financing activities was $0.8 million for the three months ended March 31, 2023, and primarily consisted of $15.7 million for the repayment of the 2023 Notes and $0.1 million for issuance of stock options, partially offset by $15.0 million in proceeds from issuance of the PHC Purchase Warrant.

Net cash provided by financing activities was $6.0 million for the three months ended March 31, 2022, and primarily consisted of $8.0 million from the issuance of common stock and $0.2 million for proceeds related to the exercise of stock options and warrants, partially offset by $2.2 million in repayment of the PPP loan.

Contractual Obligations

As of March 31, 2023, there were no material changes in our contractual obligations and commitments from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K filed with the SEC on March 16, 2023.

ITEM 3: Quantitative and Qualitative Disclosures About Market Risk

Under SEC rules and regulations, because we are considered to be a “smaller reporting company”, we are not required to provide the information required by this item in this Quarterly Report on Form 10-Q.

ITEM 4: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the assistance of our chief executive officer, who is our principal executive officer, and our chief financial officer, who is our principal financial officer, has reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2023. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by us in the periodic reports filed with the SEC is accumulated and communicated to our management, including our principal executive, financial and accounting officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving such control objectives. Based on the evaluation of our disclosure controls and procedures as of March 31, 2023, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

ITEM 1: Legal Proceedings

From time to time, we are subject to litigation and claims arising in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Legal proceedings, including litigation, government investigations and enforcement actions could result in material costs, occupy significant management resources and entail civil and criminal penalties.

In February 2021, the Company received notice and accepted service of a civil complaint that had been filed in the Western District of Texas and styled Carew ex rel. United States v. Senseonics, Inc., No. SA20CA0657DAE. The complaint was filed by a relator under seal in May 2020 pursuant to the qui tam provisions in the federal False Claims Act. Prior to the unsealing of the complaint, the government declined to intervene in the case. The case, therefore, is being pursued only by the relator and his counsel. The complaint alleges the Company’s marketing practices with physicians for its product, Eversense CGM system, violated the False Claims Act, 31 U.S.C. § 3729 and the Texas Medicaid Fraud Prevention Law, Tex. Hum Res. Code § 36.002. The court granted the Company’s motion to dismiss the complaint on March 31, 2022 but permitted the plaintiff to file an amended complaint. The court dismissed the amended complaint and entered judgment in favor of Senseonics Holdings, Inc. on March 30, 2023. The relator filed a notice of appeal to the United States Court of Appeals for the Fifth Circuit on April 28, 2023.

ITEM 1A: Risk Factors

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. Our risk factors as of the date of this Quarterly Report on Form 10-Q have not changed materially from those described in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K.

ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

ITEM 3: Defaults Upon Senior Securities

Not applicable.

ITEM 4: Mine Safety Disclosures

Not applicable.

ITEM 5: Other Information

None.

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ITEM 6: Exhibits

The exhibits listed on the Exhibit Index hereto are filed or incorporated by reference (as stated therein) as part of this Quarterly Report on Form 10-Q.

Exhibit No.	Document
3.1	Amended and Restated Certificate of Incorporation of Senseonics Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37717), filed with the Commission on March 23, 2016).
3.2	Amended and Restated Bylaws of Senseonics Holdings, Inc. (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-37717), filed with the Commission on March 23, 2016).
3.3	Certificate of Amendment to Amended and Restated Certificate of Incorporation of Senseonics Holdings, Inc. (incorporated herein by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2018 (File No. 001-37717), filed with the Commission on August 8, 2018).
3.4	Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37717), filed with the Commission on August 18, 2020).
3.5	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37717) filed on October 26, 2020).
3.6	Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.5 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37717) filed with the Commission on November 8, 2022).
3.7	Amendment to Bylaws of Senseonics Holdings, Inc. (incorporated herein by reference to Exhibit 3.7 to the Registrant’s Annual Report on Form 10-K (File No. 001-37717) filed with the Commission on March 5, 2021).
4.1	Registration Rights Agreement, dated as of March 13, 2023 (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37717) filed with the Commission on March 15, 2023).
10.1+*	Non-Employee Director Compensation Policy (As amended on May 25, 2021).
10.2+*	Amended and Restated Executive Employment Agreement by and between Senseonics, Incorporated and Kenneth L. Horton, dated as of April 1, 2023.
10.3+	2023 Commercial Equity Plan, dated as of January 10, 2023 (incorporated herein by reference to Exhibit 4.1 to the Registration Statement on Form S-3 (File No. 333-269177) filed with the Commission on January 10, 2023).
10.4	Securities Purchase Agreement, by and between Senseonics Holdings, Inc. and PHC Holdings Corporation, dated as of March 13, 2023 (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37717) filed with the Commission on March 15, 2023).
10.5	Exchange Agreement, by and between Senseonics Holdings, Inc. and PHC Holdings Corporation, dated as of March 13, 2023 (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-37717) filed with the Commission on March 15, 2023).
10.6	Common Stock Purchase Warrant, dated March 13, 2023 (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-37717) filed with the Commission on March 15, 2023).
10.7	Common Stock Purchase Warrant, dated as of April 1, 2023 (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-37717) filed with the Commission on April 3, 2023).
31.1*	Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act.
31.2*	Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act.
32.1**	Certifications of Principal Executive Officer and Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act.
101.INS*	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document)
101.SCH*	Inline XBRL Taxonomy Extension Schema Document

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101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*         Filed herewith.

**      These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

+ Indicates management contract or compensatory plan.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SENSEONICS HOLDINGS, INC.
Date: May 9, 2023	By:	/s/Rick Sullivan
		Rick Sullivan
		Chief Financial Officer
		(Principal Financial Officer)

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EX-10.1

EXHIBIT 10.1

Senseonics Holdings, Inc.

Non-Employee Director Compensation Policy

(As amended on May 25, 2021)

Each member of the Board of Directors (the “Board”) who is not also serving as an employee of Senseonics Holdings, Inc. (the “Company”) or any of its subsidiaries (each such member, an “Eligible Director”) will receive the compensation described in this Non-Employee Director Compensation Policy. A Non-Employee Director may decline all or any portion of his or her compensation by giving notice to the Company prior to the date cash is to be paid or equity awards are to be granted, as the case may be. This policy may be amended at any time in the sole discretion of the Board or the Compensation Committee of the Board.

Annual Cash Compensation

The annual cash compensation amount set forth below is payable in equal quarterly installments, payable in arrears on the last day of each fiscal quarter in which the service occurred. If an Eligible Director joins the Board or a committee of the Board at a time other than effective as of the first day of a fiscal quarter, each annual retainer set forth below will be pro-rated based on days served in the applicable fiscal year, with the pro-rated amount paid for the first fiscal quarter in which the Eligible Director provides the service, and regular full quarterly payments thereafter. All annual cash fees are vested upon payment.

1.Annual Board Service Retainer:

a. All Eligible Directors: $40,000

b. Chairman of the Board Service Retainer (in addition to Eligible Director Service Retainer): $35,000

2.Annual Committee Member Service Retainer:

a. Member of the Audit Committee: $10,000

b. Member of the Compensation Committee: $6,500

c. Member of the Nominating and Corporate Governance Committee: $5,000

3.Annual Committee Chair Service Retainer (in addition to Committee Member Service Retainer):

a. Chairman of the Audit Committee: $10,000

b. Chairman of the Compensation Committee: $7,500

c. Chairman of the Nominating and Corporate Governance Committee: $5,000

Election to Receive Common Stock in Lieu of Cash

An Eligible Director may make an election to receive all or a portion of his or her annual cash compensation described above in the form of shares of the Company’s common stock (the “Common Stock”). Elections must be made in multiples of 5% of an Eligible Director’s aggregate cash retainer.

1.	Timing of Elections:
	a. Current Eligible Directors: Elections must be made prior to the beginning of each fiscal year with respect to cash compensation to be earned during such fiscal year.
	b. New Eligible Directors: Elections for the first quarter of service must be made within 30 days of becoming an Eligible Director, provided that such election shall be applicable only to the portion of the cash retainers earned after the date of the election.

1

c. New committee member or committee chair: Elections for the first quarter of service must be made prior to the date that the Eligible Director becomes a committee member or committee chair (or, if a new Eligible Director, within 30 days of becoming a committee member or committee chair, provided that such election shall be applicable only to the portion of the cash retainer earned after the date of the election).

2.

Description of Common Stock: The shares of Common Stock will be granted under the Company’s 2015 Equity Incentive Plan, as amended (the “Plan”). The Common Stock will be granted as soon as reasonably practicable following the last day of each fiscal quarter in which the service occurred. The actual number of shares of Common Stock granted will be determined based on the closing price of the Company’s Common Stock on the NYSE American on the date of grant.

Equity Compensation

The equity compensation set forth below will be granted under the Company’s Amended and Restated 2015 Equity Incentive Plan (the “Plan”), subject to the approval of the Plan by the Company’s stockholders. All stock options granted under this policy will be nonstatutory stock options, with an exercise price per share equal to 100% of the Fair Market Value (as defined in the Plan) of the underlying Common Stock on the date of grant, and a term of ten years from the date of grant (subject to earlier termination in connection with a termination of service as provided in the Plan).

1.Initial Grant: For each Eligible Director, on the date of such Eligible Director’s initial election or appointment to the Board (or, if such date is not a market trading day, the first market trading day thereafter), the Eligible Director will be automatically, and without further action by the Board or Compensation Committee of the Board, granted an equity award (in a form to be determined by the Compensation Committee) with an aggregate grant date fair value of $225,000. In the event of a stock option, the shares subject to each such stock option will vest monthly over a three year period, subject to the Eligible Director’s Continuous Service (as defined in the Plan) through such vesting date.  In the event of a restricted stock unit, such shares will vest annually in three installments, subject to the Eligible Director’s Continuous Service (as defined in the Plan) through such vesting date.

2.Annual Grant: On the date of each annual stockholders meeting of the Company, each Eligible Director who continues to serve as a member of the Board following such stockholders meeting will be automatically, and without further action by the Board or Compensation Committee of the Board, granted an equity award (in a form to be determined by the Compensation Committee) with an aggregate grant date fair value of $112,500. The shares subject to each such award will vest on the earlier of the one year anniversary of the grant date or the next annual stockholders meeting, subject to the Eligible Director’s Continuous Service (as defined in the Plan) through such vesting date.

2

EX-10.2

Exhibit 10.2

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement"), is entered into as of the 1st day of April,2023 (the "Effective Date"), by and between, Kenneth L. Horton (the "Executive") and SENSEONICS, INCORPORATED ("Company").

WHEREAS, the Company wishes to continue to employ Executive as the General Counsel and Corporate Development Advisor of the Company, and the Executive wishes to continue to serve in such capacity for the Company and be its employee, subject to the terms and conditions of this Agreement;

WHEREAS, the Company and the Executive entered into an Executive Employment Agreement, dated as of October 1, 2017 (the “Prior Agreement”); and

WHEREAS, the Company and the Executive desire to set forth their respective rights and obligations in this Agreement with certain changes; and

WHEREAS, this Agreement has been duly approved and its execution has been duly authorized by the Company's Board of Directors.

Now, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree to the following:

1.Employment by the Company.

1.1Position. Subject to the terms set forth herein, the Company agrees to continue to employ Executive in the position of General Counsel and Corporate Development Advisor, and Executive hereby accepts such continued employment on the terms and conditions set forth in thisAgreement.

1.2Duties. Executive will report to Tim Goodnow, CEO performing such duties as are normally associated with his then current position and such duties as are assigned to him from time to time, subject to the oversight and direction of the CEO. During the term of Executive's employment with the Company, Executive will work on a full-time basis (as agreed with the CEO) for the Company and will devote Executive's  best efforts and a substantial portion of Executive's business time and attention to the business of the Company. Executive shall perform Executive's duties under this Agreement principally on a remote basis. In addition, Executive shall make such business trips as are agreed between the parties, to suchplacesasmaybenecessaryoradvisablefortheefficientoperations oftheCompany.

1.3Company Policies and Benefits. The employment relationship between the parties shall also be subject to the Company's personnel policies and other policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company's sole discretion. Executive will be eligible to participate in the Company's benefit plans on the same basis as similarly situated employees in effect from time to time during his employment. All matters of eligibilityforcoverageorbenefitsunderanybenefitplanshallbedeterminedinaccordancewith the provisions of such plan. The Company reserves the right to change, alter, or terminate any benefit plan in its sole discretion. Notwithstanding the foregoing, in the event that the terms of thisAgreement differfromorareinconflictwiththeCompany'sgeneralemploymentpoliciesor practices,thisAgreementshallcontrol.

2. Compensation.

2.1Salary. Executive shall receive for Executive's services to be rendered underthisAgreementa current basesalaryof$464,000 (four-hundred-and-sixty-four-thousand dollars)onanannualizedbasis,subjecttoreview and adjustment by the Company in its sole discretion, payable subject to standard federal and state payroll withholding requirements in accordance with the Company's standard payroll practices ("BaseSalary").

2.2Bonus. During the period Executive is employed with the Company, Executive shall be eligible to earn for Executive's services to be rendered under this Agreement a discretionary annual cash bonus of up to 50% of Base Salary ("Target Amount"), subject to review and adjustment by the Company in its sole discretion, payable subject to standard federal and state payroll withholding requirements. Whether or not Executive earns any bonus and its amount will be dependent upon (a) Executive’s continuous performance of services to the Company through the date any bonus is paid; and (b) the actual achievement by Executive and the Company of the applicable performance targets and goals set by the Board of Directors of the Company (“Board”). Theannualperiodoverwhichperformanceismeasuredforpurposesofthisbonusis January 1 through December 31. The Board will determine in its sole discretion the extent to which Executive and the Company have achieved the performance goals upon which the bonus is based and the amount of the bonus, which could be above or below the Target Amount (and may be zero). Any bonus shall be subject to the terms of any applicable incentive compensation plan adopted by the Company. Any bonus, if earned, will be paid to Executive within the time periodsetforthintheincentivecompensationplan.

2.3Expense Reimbursement. The Company will reimburse Executive for reasonable business expenses in accordance with the Company's standard expense reimbursement policy, as the same may be modified by the Company from time to time, including for travel and lodging on trips to Company headquarters. The Company shallreimburseExecutiveforallcustomaryandappropriatebusiness-relatedexpenses actually incurred and documented in accordance with Company policy, as in effect from time to time.Fortheavoidanceofdoubt,totheextentthatanyreimbursementspayabletoExecutive are subject to the provisions of Section 409A of the Code: (a) any such reimbursements will be paid no later than  December  31 of  the year  following  the year in which the expensewas incurred,

(b) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.

2.4 Equity.  In conjunction with his existing employment, Executive has been granted certain stock options and restricted stock units pursuant to the terms of the 2015 Equity Incentive Plan (the “Plan”).

3.Other Agreements and Indemnity.

3.1Proprietary Information, Inventions, Non-Competition and Non- Solicitation Obligations. As a condition of employment, Executive agreed to execute and abide by a Employee Proprietary Information, Inventions, Non-Competition and Non­ Solicitation Agreement attached as Exhibit A ("Proprietary Information Agreement'), which may be amended by the parties from time to time without regard to this Agreement. The ProprietaryInformationAgreementcontainsprovisionsthatareintendedbythepartiestosurvive anddosurviveterminationofthisAgreement.

3.2Indemnification and Insurance.  Company entered into the Company’s standard form indemnification agreement attached as Exhibit B (the “Indemnification Agreement”) with Executive.  Company shall also ensure that Executive is covered under Company’s D&O Insurance policy with coverage customary for the General Counsel of a publicly-traded company for any claims resulting from or in any way relating to Executive’s Employment, whether such claims are brought during or after Executive’s Employment.  This paragraph and the Indemnification Agreement contain provisions that are intended by the parties to survive and do survive the termination of this Agreement.

4.Outside Activities during Employment. The parties acknowledge that, during the period of Employment, Executive may engage in board service, other employment, occupation or business enterprise, provided that such activities are not for an enterprise that develops or commercializes products competitive with the Company and further subject to the terms of this Section. Executive will provide Company prior notice of any board, employment or other business activities and shall be responsible to manage such activities so that they do not interfere with Executive's responsibilities and the performance of Executive's duties hereunder.  It is further understood that Executive may pursue (i) reasonable time devoted to volunteer services for or on behalf of such religious, educational, non-profit and/orothercharitableorganizationasExecutivemaywishtoserve,(ii)reasonabletimedevoted to activities in the non-profit and business communities  consistent  with Executive's duties;and (iii)suchotheractivitiesasmay bespecificallyapprovedbytheBoard or the Chief Executive Officer.  Company acknowledges the activities engaged in by Executive, similar to those noted on Exhibit C, are reasonable.For clarity, therestrictions of this SectionshallnotprecludeExecutive(x)fromowninglessthanonepercent (1%)ofthetotaloutstanding shares of any publicly traded company, or (y) from employment or service in any capacity with Affiliates of the Company. As used in this Agreement, "Affiliates" means an entity under commonmanagementorcontrolwiththeCompany.

5.No Conflict with Existing Obligations. Executive represents that Executive's performance of all the terms of this Agreement does not and will not breach any agreement or obligation of any kind made prior to Executive's employment by the Company, including agreements or obligations Executive may have with prior employers or entities for which Executive has provided services. Executive has not entered into, and Executive agrees that Executive will not enter into, any agreement or obligation, either written or oral, in conflict herewith.

6.Termination of Employment. The parties acknowledge that Executive's employmentrelationshipwiththeCompany isat-will,meaningeithertheCompany orExecutive may terminate Executive's employment at any time, with or without cause or advanced notice. The provisions in this Section govern the amount of compensation, if any, to be provided to Executiveuponterminationofemploymentanddonotalterthisat-willstatus.

6.1Termination by the Company or Executive without Cause or for Good Reason (except in a Change of Control).

(a)The Company shall have the right to terminate Executive’s employment with the Company pursuant to this Section 6.1 at any time, in accordance with Section 6.6, without “Cause” (as defined in Section 6.3(b) below) by giving notice as described in Section 8.1 of this Agreement.  A termination pursuant to Section 6.5 below is not a termination without “Cause” for purposes of receiving the benefits described in this Section 6.1.

(b)If the Company terminates Executive’s employment at any time without Cause or Executive terminates his employment with the Company for Good Reason and provided that such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “Separation from Service”), then Executive shall be entitled to receive the Accrued Obligations (defined below).  If Executive complies with the obligations in Section 6.1(c) below, Executive shall also be eligible to receive the following severance benefits: (1) an amount equal to Executive’s then current Base Salary for one year, less all applicable withholdings and deductions (“Severance”), paid in equal installments beginning on the Company’s first regularly scheduled payroll date following the Release Effective Date (as defined in Section 6.1(c) below), with the remaining installments occurring on the Company’s regularly scheduled payroll dates thereafter and (2) a pro rata portion of Executive’s Target Amount for the performance year in which Executive’s termination occurs, with such pro rata portion calculated based upon the number of days that Executive was employed during such performance year divided by the total number of days in such performance year, payable as a lump sum payment on the Release Effective Date (as defined below) (“Bonus Severance”).

(c)Executive will be paid all of the Accrued Obligations on the Company’s first payroll date after Executive’s date of termination from employment or earlier if required by law.  Executive shall receive the Severance and Bonus Severance pursuant to Section 6.1(b) of this Agreement and the payments pursuant to Section 6.1(d) if:  (i) by the 60th day following the date of Executive’s Separation from Service, he has signed and delivered to the Company a separation agreement containing an effective, general release of claims in favor of the Company and its affiliates and representatives, in a form acceptable to the Company (the “Release”), which cannot be revoked in whole or part by such date (the date that the Release can no longer be revoked is referred to as the “Release Effective Date”); and (ii) if he holds any other positions with the Company, he resigns such position(s) to be effective no later than the date of Executive’s termination date (or such other date as requested by the Board); (iii) he returns all Company property; (iv) he complies with his post-termination obligations under this Agreement and the Proprietary Information Agreement; and (v) he complies with the terms of the Release, including without limitation any nondisparagement and confidentiality provisions contained in Release.  To the extent that any severance payments are deferred compensation under Section 409A of the Code, and are not otherwise exempt from the application of Section 409A, then, if the period during which Executive may consider and sign the Release spans two calendar years, the payment of Severance will not be made or begin until the later calendar year.

(d)If Executive timely elects continued coverage under COBRA for himself and his covered dependents under the Company’s group health plans following such termination, then the Company shall pay the COBRA premiums necessary to continue Executive’s and his covered dependents’ health insurance coverage in effect for himself (and his covered dependents) on the termination date until the earliest of: (i) twelve (12) months following the termination date (the “COBRA Severance Period”); (ii) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; or (iii) the date Executive ceases to be eligible for COBRA continuation coverage for any reason, including plan termination (such period from the termination date through the earlier of (i)-(iii), (the “COBRA Payment Period”).  Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums on Executive’s behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this Section, the Company shall pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for such month,

subject to applicable tax withholding (such amount, the “Special Severance Payment”), such Special Severance Payment to be made without regard to the COBRA period prior to the end of the COBRA Payment Period.  Nothing in this Agreement shall deprive Executive of his rights under COBRA or ERISA for benefits under plans and policies arising under his employment by the Company.

(e)For purposes of this Agreement, “Accrued Obligations” are (i) Executive’s accrued but unpaid salary through the date of termination, (ii) any unreimbursed business expenses incurred by Executive payable in accordance with the Company’s standard expense reimbursement policies, and (iii) benefits owed to Executive under any qualified retirement plan or health and welfare benefit plan in which Executive was a participant in accordance with applicable law and the provisions of such plan.

(f)The Severance and Bonus Severance provided to Executive pursuant to this Section 6.1 are in lieu of, and not in addition to, any benefits to which Executive may otherwise be entitled under any Company severance plan, policy or program.

(g)Any damages caused by the termination of Executive’s employment without Cause would be difficult to ascertain; therefore, the Severance and Bonus Severance for which Executive is eligible pursuant to Section 6.1(b) above in exchange for the Release is agreed to by the parties as liquidated damages, to serve as full compensation, and not a penalty.

(h)For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following events without Executive’s consent: (i) a material reduction in Executive’s Base Salary of at least 10%; (ii) a material breach of this Agreement by the Company; (iii) any material diminution in Executive’s duties, responsibilities, authority, reporting structure, status or title, unless approved in writing by Executive; or (iv) an adverse change in the conditions of employment with respect to Executive’s remote work location, hours to be worked or amount of travel; provided, however, that, any such termination by Executive shall only be deemed for Good Reason pursuant to this definition if: (1) Executive gives the Company written notice of his intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that he believes constitute(s) Good Reason, which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the “Cure Period”); and (3) Executive voluntarily terminates his employment within thirty (30) days following the end of the Cure Period.

(i)Any damages caused by the termination of Executive’s employment without Cause or for Good Reason would be difficult to ascertain; therefore, the payments for which Executive is eligible pursuant to this Section 6.1 above in exchange for the Release is agreed to by the parties as liquidated damages, to serve as full compensation, and not a penalty.

6.2Termination by the Company without Cause or for Good Reason Following a Change in Control.

(a) If Executive's employment by the Company is terminated by the Company without "Cause" (and not due to Disability or death) or by Executive for Good Reason coincident with a Change in Control (as defined below), then the Company shall pay or provide Executive with the Accrued Obligations and all of the benefits described in Section 6.1 above, subject to compliance with Section 6.1(c); provided that: (i) in lieu of the bonus described in Section 6.1(b), the Company shall pay Executive the larger of a pro-rata amount as described in Section 6.1(b) or 125% of the Target Amount for the performance year in which Executive’s termination occurs, payable as a lump sum payment on the Release Effective Date; and (ii) if Executive’s employment by the Company or any successor entity is terminated by the Company or the successor entity without “Cause” (and not due to Disability or death) within twelve (12) months following a Change in Control, 100% of the then unvested portion of the equity awards granted to Executive shall become fully vested.  

(b) For purposes of this Agreement, a “Change in Control” means (a) any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, continue to hold a majority of the voting power of the surviving entity (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such consolidation, merger or reorganization; (b) any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting power is transferred; provided that the foregoing shall not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or indebtedness of the Company is cancelled or converted or a combination thereof; or (c) a sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company.  In the event of any interpretation of this definition, the Board of Directors of the Company, upon advice of legal counsel, shall have final and conclusive authority, so long as such authority is exercised in good faith.  Notwithstanding the foregoing, a Change in Control will only be deemed to occur for purposes of this Agreement it is also meets the definition used for purposes of Treasury Regulation Section 1.409A-3(a)(5), that is, as defined under Treasury Regulation Section 1.409A-3(i)(5).

(c)Any damages caused by the termination of Executive’s employment without Cause or for Good Reason following a Change in Control would be difficult to ascertain; therefore, the payments for which Executive is eligible pursuant to Section 6.2 above in exchange for the Release is agreed to by the parties as liquidated damages, to serve as full compensation, and not a penalty.

6.3Termination by the Company for Cause.

(a)TheCompanyshallhavetheright toterminateExecutive'semploymentwiththeCompanyatanytime, in accordance with Section 6.6,forCausebygivingnotice asdescribedin Section 8.1ofthisAgreement.  IntheeventExecutive'semploymentisterminatedatanytimefor Cause,ExecutivewillnotreceiveSeverance, a Severance Bonusoranyotherseverancecompensationorbenefits, except that,pursuanttotheCompany'sstandardpayrollpolicies,theCompanyshallpayto ExecutivetheAccruedObligations.

(b)"Cause"forterminationshall mean thattheCompanyhas determinedinitssolediscretionthatExecutivehasengagedinanyofthefollowing:(i)a materialbreachofanycovenantorconditionunderthisAgreement oranyotheragreement betweentheparties;(ii)anyactconstitutingdishonesty,fraud,immoralordisreputable conduct; (iii)anyconductwhichconstitutesafelonyunderapplicablelaw;(iv)violationofanywritten Companypolicyoranyact ofmisconduct;(v)refusaltofolloworimplementaclearand reasonabledirectiveof the Company;(vi)negligenceorincompetenceintheperformance of Executive's dutiesorfailuretoperformsuchdutiesinamannersatisfactorytotheCompany afterthe

expirationoften(10)dayswithoutcureafterwrittennoticeofsuchfailure;or(vii) breachoffiduciaryduty.

6.4Resignation by Executive.

(a)Executive may resign from Executive’s employment with the Company at any time, in accordance with Section 6.6, by giving notice as described in Section 8.1.

(b)In the event Executive resigns from Executive’s employment with the Company for any reason, Executive will not receive Severance, a Severance Bonus or any other severance compensation or benefits, except that, pursuant to the Company’s standard payroll policies, the Company shall pay to Executive the Accrued Obligations

6.5Termination by Virtue of Death or Disability of Executive.

(a)In the event of Executive’s death while employed pursuant to this Agreement, all obligations of the parties hereunder shall terminate immediately, in accordance with Section 6.6, and the Company shall, pursuant to the Company’s standard payroll policies, pay to Executive’s legal representatives all Accrued Obligations.

(b)Subject to applicable state and federal law, the Company shall at all times have the right, upon written notice to Executive, and in accordance with Section 6.6, to terminate this Agreement based on Executive’s Disability.  Termination by the Company of Executive’s employment based on “Disability” shall mean termination because Executive is unable due to a physical or mental condition to perform the essential functions of his position with or without reasonable accommodation for 180 days in the aggregate during any twelve (12) month period or based on the written certification by two licensed physicians of the likely continuation of such condition for such period.  This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law.  In the event Executive’s employment is terminated based on Executive’s Disability, Executive will not receive Severance, a Severance Bonus or any other severance compensation or benefit, except that, pursuant to the Company’s standard payroll policies, the Company shall pay to Executive the Accrued Obligations.

6.6Notice; Effective Date of Termination.

(a)Termination of Executive’s employment pursuant to this Agreement shall be effective on the earliest of:

(ii)immediately after the Company gives notice to Executive of Executive’s termination, with or without Cause, unless pursuant to Section 6.3(b)(vi) in which case ten (10) days after notice if not cured or unless the Company specifies a later date, in which case, termination shall be effective as of such later date;

(iii)immediately upon the Executive’s death;

(iv)ten (10) days after the Company gives notice to Executive of Executive’s termination on account of Executive’s Disability, unless the Company specifies a later date, in which case, termination shall be effective as of such later date, provided that Executive has not returned to the full-time performance of Executive’s duties prior to such date;

(v)ten (10) days after the Executive gives written notice to the Company of Executive’s resignation, provided that the Company may set a termination date at any time between the date of notice and the date of resignation, in which case the Executive’s resignation shall be effective as of such other date.  Executive will receive compensation through any required notice period; or

(vi)for a termination for Good Reason, immediately upon Executive’s full satisfaction of the requirements of Section 6.1(h)

(b) In the event notice of a termination under subsections (a)(i), (iii), (iv) and (v) is given orally, at the other party’s request, the party giving notice must provide written confirmation of such notice within five (5) business days of the request in compliance with the requirement of Section 8.1 below. In the event of a termination for Cause or Good Reason, written confirmation shall specify the subsection(s) of the definition of Cause or Good Reason relied on to support the decision to terminate.

6.7Cooperation with Company After Termination of Employment.

Following termination of Executive’s employment for any reason, Executive agrees to cooperate fully with the Company in connection with its actual or contemplated defense, prosecution, or investigation of any claims or demands by or against third parties, or other matters arising from events, acts, or failures to act that occurred during the period of Executive’s employment by the Company. Such cooperation includes, without limitation, making Executive available to the Company upon reasonable notice, without subpoena, to provide complete, truthful and accurate information in witness interviews, depositions and trial testimony. In addition, for six months after Executive’s employment with the Company ends for any reason, Executive agrees to cooperate fully with the Company in all matters relating to the transition of Executive’s work and responsibilities on behalf of the Company, including, but not limited to, any present, prior or subsequent relationships and the orderly transfer of any such work and institutional knowledge to such other persons as may be designated by the Company. The Company will reimburse Executive for reasonable out-of-pocket expenses Executive incurs in connection with any such cooperation (excluding forgone wages, salary, or other compensation) and will make reasonable efforts to accommodate Executive’s scheduling needs.

6.8Application of Section 409A.

It is intended that all of the severance payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively, “Section 409A”) provided under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9), and this Agreement will be construed in a manner that complies with Section 409A. If not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A, and incorporates by reference all required definitions and payment terms. No severance payments will be made under this Agreement unless Executive’s termination of employment constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)). For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement (whether severance payments or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. If the Company determines that the severance benefits provided under this Agreement constitutes “deferred compensation” under Section 409A and if Executive is a “specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i) of the Code at the time of Executive’s Separation from Service, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance will be delayed as follows: on the earlier to occur of (a) the date that is six months and one day after Executive’s Separation from Service, and (b) the date of Executive’s death (such earlier date, the “Delayed Initial Payment Date”), the Company will (i) pay to Executive a lump sum amount equal to the sum of the severance benefits that Executive would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the severance benefits had not been delayed pursuant to this Section 6.8 and (ii) commence paying the balance of the severance benefits

in accordance with the applicable payment schedule set forth in Section 6. No interest shall be due on any amounts deferred pursuant to this Section 6.

7. Section 280G.

7.1Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code and the applicable regulations thereunder (the "Aggregate Payments"), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in Executive receiving a higher After Tax Amount (as defined below) than Executive would receive if the Aggregate Payments were not subject to such reduction.  In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code:  (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

7.2Forpurposesof thisSection 7, the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on Executive as a result of Executive’s receipt of the Aggregate Payments.  For purposes of determining the After Tax Amount, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and localtaxes.

8. General Provisions.

8.1Notices. Any notices required hereunder to be in writing shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by electronic mail or confirmed facsimile if sent during normal business hours of the recipient, and if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognizedovernightcourier,specifyingnextdaydelivery,withwrittenverificationof receipt. All communications shall be sent to the Company at its primary office location and to Executive at 44 Rae Avenue, Needham, MA 02492 or Company-issued email address with a copy to KLHorton@comcast.net, or at such other address as the Company or Executive may designate by ten (10) daysadvance writtennoticetotheother.

8.2Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in

any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been containedherein.

8.3Survival. ProvisionsofthisAgreementwhichbytheirtermsmustsurvive the termination of this Agreement in order to effectuate the intent of the parties will survive any such termination, whether by expiration of the term, termination of Executive's employment, or otherwise,forsuchperiodasmaybeappropriateunderthecircumstances.

8.4Waiver. If either party should waive any breach of any provisions ofthis Agreement,itshallnottherebybedeemedtohavewaivedanyprecedingorsucceedingbreachof the same or any other provision of thisAgreement.

8.5Complete Agreement. This Agreement,  together with the Proprietary Rights Agreement, constitutes the entire agreement between Executive and the Company with regard to the subject matter hereof. This Agreement is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter and supersedes any prior oral discussions or written communications and agreements, including the Prior Agreement. This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or amended except in writing signed by Executive and an authorized officer of the Company. The parties have entered into a separate Proprietary Information Agreement, a separate Indemnification Agreement and have or may enter into separate agreements related to equity. These separate agreements govern other aspects of the relationship between the parties, have or may have provisions that survive termination of Executive's employment under this Agreement, may be amended or superseded by the parties without regard to this Agreement and are enforceable according to their terms without regard to theenforcementprovisionofthisAgreement.

8.6Counterparts. ThisAgreementmaybeexecutedinseparatecounterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement. The parties agree that facsimile and scannedimagecopiesofsignatureswillsufficeasoriginalsignatures.

8.7Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

8.8Successors and Assigns. The Company shall assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any Company or other entity with or into which the Company may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said Company or other entity shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder. Executive may not assign or transfer this Agreement oranyrightsorobligations hereunder, otherthantohisestateuponhisdeath.

8.9Choice of Law. All questions concerning the construction, validity and interpretationofthisAgreement willbegovernedbythelawsoftheStateofMaryland.

8.10Dispute Resolution. The parties recognize that litigation in federal or state courts or before federal or state administrative agencies of disputes arising out of the Executive's employment with the Company or out of this Agreement, or the Executive's termination of employment or termination

of this Agreement, may not be in the best interests of either the Executive or the Company, and may result in unnecessary costs, delays, complexities, and uncertainty. The parties agree that any dispute between the parties arising out of or relating to the negotiation, execution, performance or termination of this Agreement or the Executive's employment, including, but not limited to, any claim arising out of this Agreement, claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of  1990, Section 1981 of the Civil Rights Act of 1966, as amended, Massachusetts Antidiscrimination Act, Mass. Gen. Laws ch.151B, the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, the Family Medical Leave Act, the Executive  Retirement  Income Security  Act, and any similar federal, state or local law,statute, regulation,oranycommonlawdoctrine, whetherthatdisputearisesduringorafteremployment, shallbesettledbybindingarbitrationinaccordance withtheNationalRulesfortheResolutionof Employment Disputes of the American Arbitration Association; provided however, that this dispute resolution provision shall not apply to any separate agreements between the parties that do not themselves specify arbitration as an exclusive remedy. The location for the arbitration shall be the Washington, DC metropolitan area. Any award made by such panel shall be final, bindingandconclusiveonthepartiesforallpurposes, andjudgmentupontheawardrenderedby the arbitrators may be entered in any court having jurisdiction thereof. The arbitrators' fees and expenses and all administrative fees and expenses associated with the filing of the arbitration shall be borne by the Company; provided however, that at the Executive's option, Executive may voluntarily pay up to one-half the costs and fees. The parties acknowledge and agree that their obligations to arbitrate under this Section survive the termination of this Agreement and continue after the termination of the employment relationship between Executive and the Company. The parties each further agree that the arbitration provisions of this Agreement shall provideeachpartywithitsexclusive remedy, andeachpartyexpressly waivesanyrightitmight have to seek redress in any other forum, except as otherwise expressly provided in this Agreement. By election arbitration as the means for final settlement of all claims, the parties hereby waive their respective rights to, and agree not to, sue each other in any action in a Federal, State or local court with respect to such claims, but may seek to enforce in court an arbitration award rendered pursuant to this Agreement. The parties specifically agree to waive their respective rights to a trial by jury, and further agree that no demand, request or motion will be made for trial by jury.

[SIGNATURES TO FOLLOW ON NEXT PAGE]

IN WITNESS WHEREOF, thepartieshavedulyexecutedthisAgreementasofthedatefirst abovewritten.

EXECUTIVE

/s/ Kenneth L. Horton

Kenneth L. Horton

SENSEONICS, INCORPORATED

By:/s/ Tim Goodnow

Tim Goodnow, Ph.D.

President & Chief Executive Officer

12

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Timothy T. Goodnow, Ph.D., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Senseonics Holdings, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2023

/s/ Timothy T. Goodnow, Ph.D. 

Timothy T. Goodnow, Ph.D.

President & Chief Executive Officer

(principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Rick Sullivan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Senseonics Holdings, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2023

/s/ Rick Sullivan

Rick Sullivan

Chief Financial Officer

(principal financial officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS OF

PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Timothy T. Goodnow, Ph.D., President and Chief Executive Officer of Senseonics Holdings, Inc. (the “Company”), and Rick Sullivan, Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the “Quarterly Report”), to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and

2. The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In Witness Whereof, the undersigned have set their hands hereto as of the 9th day of May 2023.

/s/ Timothy T. Goodnow, Ph.D.	/s/ Rick Sullivan
Timothy T. Goodnow, Ph.D.	Rick Sullivan
President & Chief Executive Officer	Chief Financial Officer
(principal executive officer)	(principal financial officer)

*This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 05, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Entity File Number	001-37717
Entity Registrant Name	Senseonics Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-1210911
Entity Address, Address Line One	20451 Seneca Meadows Parkway
Entity Address, City or Town	Germantown
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20876-7005
City Area Code	301
Local Phone Number	515-7260
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	SENS
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		479,871,695
Entity Central Index Key	0001616543
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 45,085	$ 35,793
Short term investments, net	83,359	108,222
Accounts receivable, net	451	127
Accounts receivable, net - related parties	2,953	2,324
Inventory, net	8,195	7,306
Prepaid expenses and other current assets	6,293	7,428
Total current assets	146,336	161,200
Deposits and other assets	2,998	3,108
Long term investments, net	8,157	12,253
Property and equipment, net	1,042	1,112
Total assets	158,533	177,673
Current liabilities:
Accounts payable	646	419
Accrued expenses and other current liabilities	12,808	14,616
Accrued expenses and other current liabilities, related parties	823	837
Note payable, current portion, net		15,579
Derivative liability, current portion		20
Total current liabilities	14,277	31,471
Long-term debt and notes payables, net	37,479	56,383
Derivative liabilities	2,081	52,050
Other liabilities	2,576	2,689
Total liabilities	56,413	142,593
Preferred stock and additional paid-in-capital, subject to possible redemption: $0.001 par value per share; 12,000 shares and 12,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022	37,656	37,656
Total temporary equity	37,656	37,656
Commitments and contingencies
Stockholders' equity (deficit):
Common stock, $0.001 par value per share; 900,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 479,780,414 shares and 479,637,138 shares issued and outstanding as of March 31, 2023 and December 31, 2022	480	480
Additional paid-in capital	871,746	806,488
Accumulated other comprehensive loss	(220)	(678)
Accumulated deficit	(807,542)	(808,866)
Total stockholders' equity (deficit)	64,464	(2,576)
Total liabilities and stockholders' equity (deficit)	$ 158,533	$ 177,673

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Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Class of stock information
Temporary equity, par or stated value per share	$ 0.001	$ 0.001
Temporary equity, shares issued	12,000	12,000
Temporary equity, shares outstanding	12,000	12,000
Common stock, par value per share (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	900,000,000	900,000,000
Common stock, shares issued	479,780,414	479,637,138
Common stock, shares outstanding	479,780,414	479,637,138

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Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
Revenue, net	$ 313	$ 292
Revenue, net - related parties	3,824	2,189
Total revenue	4,137	2,481
Cost of sales	3,723	1,954
Gross profit	414	527
Expenses:
Research and development expenses	12,405	7,804
Selling, general and administrative expenses	7,718	7,883
Operating loss	(19,709)	(15,160)
Other income (expense), net:
Interest income	1,108	93
Gain on fair value adjustment of option		21,701
Exchange related gain, net	18,776
Interest expense	(4,652)	(4,494)
Gain on change in fair value of derivatives	5,778	84,569
Impairment cost, net		30
Other income (expense)	23	(21)
Total other income (expense), net	21,033	101,878
Net Loss (Income)	1,324	86,718
Other comprehensive income (loss)
Unrealized gain (loss) on marketable securities	458	(625)
Total other comprehensive gain (loss)	458	(625)
Total comprehensive income	$ 1,782	$ 86,093
Basic net income per common share	$ 0.00	$ 0.19
Basic weighted-average shares outstanding	497,473,222	455,942,886
Diluted net income (loss) per common share	$ 0.00	$ (0.03)
Diluted weighted-average shares outstanding	540,532,813	605,198,839

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Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands	Preferred Stock Series B Preferred Stock	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Balance at Dec. 31, 2021		$ 447	$ 765,215	$ (212)	$ (950,985)	$ (185,535)
Balance (in shares) at Dec. 31, 2021		447,282
Changes in Stockholders' Equity (Deficit)
Issuance of common stock, net of issuance costs		$ 3	8,001			8,004
Issuance of common stock, net of issuance costs (in shares)		3,077
Exercise of stock options and warrants		$ 9	162			171
Exercise of stock options and warrants (in shares)		9,084
Issued common stock for vested RSUs and ESPP purchase		$ 4	58			62
Issued common stock for vested RSUs and ESPP purchase (in shares)		3,786
Stock-based compensation expense			1,736			1,736
Net income					86,718	86,718
Other comprehensive income (loss), net of tax				(625)		(625)
Balance at Mar. 31, 2022		$ 463	775,172	(837)	(864,267)	(89,469)
Balance (in shares) at Mar. 31, 2022		463,229
Balance at Dec. 31, 2021		$ 447	765,215	(212)	(950,985)	(185,535)
Balance (in shares) at Dec. 31, 2021		447,282
Balance at Dec. 31, 2022	$ 37,656	$ 480	806,488	(678)	(808,866)	(2,576)
Balance (in shares) at Dec. 31, 2022		479,637
Changes in Stockholders' Equity (Deficit)
Issuance of stock options, net of issuance costs			(65)			(65)
Issuance of stock options, net of issuance costs (in shares)		143
Issuance of warrants, net of issuance costs			63,542			63,542
Stock-based compensation expense			1,781			1,781
Net income					1,324	1,324
Other comprehensive income (loss), net of tax				458		458
Balance at Mar. 31, 2023	$ 37,656	$ 480	$ 871,746	$ (220)	$ (807,542)	$ 64,464
Balance (in shares) at Mar. 31, 2023		479,780

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Cash flows from operating activities
Net (loss) income	$ 1,324	$ 86,718
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization expense	236	263
Non-cash interest expense (debt discount and deferred costs)	2,625	2,772
Gain on change in fair value of derivatives	(5,778)	(84,569)
Gain on fair value adjustment of option		(21,701)
Exchange related gain, net	(18,776)
Impairment of option, net		(30)
Stock-based compensation expense	1,781	1,736
Provision for inventory obsolescence and net realizable value	(15)
Other	56
Changes in assets and liabilities:
Accounts receivable	(953)	(2,056)
Prepaid expenses and other current assets	1,136	(1,411)
Inventory	(874)	(837)
Deposits and other assets		163
Accounts payable	227	886
Accrued expenses and other liabilities	(267)	(2,031)
Accrued interest	(315)	(62)
Operating lease liabilities	(255)
Net cash used in operating activities	(19,848)	(20,159)
Cash flows from investing activities
Capital expenditures	(57)	(137)
Purchase of marketable securities	(9,653)
Proceeds from sale and maturity of marketable securities	39,657	19,803
Net cash provided by investing activities	29,947	19,666
Cash flows from financing activities
Issuance of common stock, net		8,004
Proceeds from issuance of stock options, net	(65)	233
Repayment of 2023 Note	(15,700)
Proceeds from issuance of warrants, net	14,958
Repayment of term loans		(2,194)
Net cash (used in) provided by financing activities	(807)	6,043
Net increase in cash and cash equivalents	9,292	5,550
Cash and cash equivalents, at beginning of period	35,793	33,461	$ 33,461
Cash and cash equivalents, at ending of period	45,085	39,011	$ 35,793
Supplemental disclosure of cash flow information
Cash paid during the period for interest	1,756	$ 1,762
Supplemental disclosure of non-cash investing and financing activities
Property and equipment purchases included in accounts payable and accrued expenses	48
Issuance of warrant in exchange for PHC Notes	$ 48,550

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Organization and Nature of Operations

3 Months Ended

Mar. 31, 2023

Organization and Nature of Operations

Organization and Nature of Operations

1. Organization and Nature of Operations

Senseonics Holdings, Inc., a Delaware corporation, is a medical technology company focused on the development and manufacturing of long-term, implantable continuous glucose monitoring (“CGM”) systems to improve the lives of people with diabetes by enhancing their ability to manage their disease with relative ease and accuracy.

Senseonics, Incorporated is a wholly owned subsidiary of Senseonics Holdings, Inc. and was originally incorporated on October 30, 1996 and commenced operations on January 15, 1997. Senseonics Holdings, Inc. and Senseonics, Incorporated are hereinafter collectively referred to as the “Company” unless otherwise indicated or the context otherwise requires.

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Liquidity and Capital Resources

3 Months Ended

Mar. 31, 2023

Liquidity and Capital Resources

Liquidity and Capital Resources

2. Liquidity and Capital Resources

From its founding in 1996 until 2010, the Company has devoted substantially all of its resources to researching various sensor technologies and platforms. Beginning in 2010, the Company narrowed its focus to developing and refining a commercially viable glucose monitoring system. The Company has incurred substantial losses and cumulative negative cash flows from operations since its inception in October 1996 and expects to incur additional losses in the near future. We incurred total gross profit (loss) of $2.7 million, ($0.8) million, and ($17.4) million for the years ended December 31, 2022, 2021 and 2020, respectively. For the period ending March 31, 2023, the Company had gross profit of $0.4 million and an accumulated deficit of $807.5 million. To date, the Company has funded its operations principally through the issuance of preferred stock, common stock, convertible notes and debt. As of March 31, 2023, the Company had cash, cash equivalents and marketable securities of $136.6 million.

In November 2021, the Company entered into an Open Market Sale Agreement, (the “2021 Sales Agreement”) with Jefferies LLC (“Jefferies”), under which the Company could offer and sell, from time to time, at its sole discretion, shares of its common stock having an aggregate offering price of up to $150.0 million through Jefferies as its sales agent in an “at the market” offering. Jefferies will receive a commission up to 3.0% of the gross proceeds of any common stock sold through Jefferies under the 2021 Sales Agreement. During the three months ended March 31, 2023, the Company has not received any proceeds from the sale of shares of its common stock under the 2021 Sales Agreement. In 2022, Company received $34.4 million in net proceeds from the sale of 15,160,899 shares of its common stock under the 2021 Sales Agreement.

On November 9, 2020, the Company entered into an Equity Line Agreement (the “Equity Line Agreement”) with Energy Capital, LLC, a Florida limited liability company (“Energy Capital”), which provided that, upon the terms and subject to the conditions and limitations set forth therein, Energy Capital was committed to purchase up to an aggregate of $12.0 million of shares of the Company’s newly designated series B convertible preferred stock (the “Series B Preferred Stock”) at the Company’s request from time to time during the 24-month term of the Equity Line Agreement. Under the Equity Line Agreement, beginning January 21, 2021, subject to the satisfaction of certain conditions, including that the Company have less than $8.0 million of cash, cash equivalents and other available credit (aside from availability under the Equity Line Agreement), the Company had the right, at its sole discretion, to present Energy Capital with a purchase notice (each, a “Regular Purchase Notice”) directing Energy Capital (as principal) to purchase shares of Series B Preferred Stock at a price of $1,000 per share (not to exceed $4.0 million worth of shares) once per month, up to an aggregate of $12.0 million of the Company’s Series B Preferred Stock at a per share price (the “Purchase Price”) equal to $1,000 per share of Series B Preferred Stock, with each share of Series B Preferred Stock initially convertible into common stock, beginning six months after the date of its issuance, at a conversion price of $0.3951 per share, subject to customary anti-dilution adjustments, including in the event of any stock split. The Equity Line Agreement provided that the Company was not permitted to affect any Regular Purchase Notice under the Equity Line Agreement on any date where the closing price of the Company’s common stock on the NYSE American is less than $0.25 without the approval of Energy Capital. In addition, beginning on January 1, 2022, since there had been no sales of the Series B Preferred Stock pursuant to the Equity Line Agreement, Energy Capital had the right, at its sole

discretion, by its delivery to the Company of a Regular Purchase Notice, to purchase up to the $12.0 million of Series B Preferred Stock under the Equity Line Agreement at the Purchase Price. On November 7, 2022, Energy Capital exercised in full its right to purchase $12.0 million of Series B Preferred Stock. The excess of the Purchase Price and the fair value of the Energy Capital option in the total amount of $37.6 million was recorded in additional-paid-in-capital.

On August 9, 2020, the Company entered into a financing agreement with the parent company of Ascensia Diabetes Care Holdings AG (“Ascensia”), PHC Holdings Corporation (“PHC”), pursuant to which the Company issued $35.0 million in aggregate principal amount of Senior Secured Convertible Notes due on October 31, 2024 (the “PHC Notes”), to PHC. The Company also issued 2,941,176 shares of common stock to PHC as a financing fee. The Company also has the option to sell and issue PHC up to $15.0 million of convertible preferred stock on or before December 31, 2022, contingent upon obtaining U.S. Food and Drug Administration (“FDA”) approval for the 180-day Eversense product for marketing in the United States before such date. The Company successfully obtained FDA approval in February 2022 and the option was not exercised. As described in Note 11, on March 13, 2023, the Company entered into an Exchange Agreement (the “Exchange Agreement”) with PHC, pursuant to which PHC agreed to exchange (the “Exchange”) its $35.0 million aggregate principal amount of the PHC Notes, including all accrued and unpaid interest thereon, for a warrant (the “Exchange Warrant”) to purchase up to 68,525,311 shares of the Company’s common stock, $0.001 par value per share (the “Exchange Warrant Shares”). The Exchange Warrant is a “pre-funded” warrant with a nominal exercise price of $0.001 per Exchange Warrant Share. On March 31, 2023, the Exchange was consummated, and the Company issued the Exchange Warrant to PHC in consideration for the cancellation of the PHC Notes.

On March 13, 2023, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with PHC, pursuant to which the Company issued and sold to PHC in a private placement (the “Private Placement”) a warrant (the “Purchase Warrant”) to purchase 15,425,750 shares of the Company’s common stock, $0.001 par value per share (the “Purchase Warrant Shares”). The purchase price of the Purchase Warrant was approximately $0.97 per Purchase Warrant Share, representing the undiscounted, trailing 10-day volume weighted average price of the Company’s common stock through March 10, 2023. The Purchase Warrant is a “pre-funded” warrant with a nominal exercise price of $0.001 per Purchase Warrant Share. The issuance of the Purchase Warrants enabled PHC to maintain, as of the closing of the transaction, a 15% beneficial ownership for purposes of the Investor Rights Agreement, dated August 9, 2020, between the Company and PHC. The Private Placement closed on March 13, 2023 (the “Private Placement Closing Date”) and the Company received aggregate gross proceeds of $15.0 million, before deducting private placement expenses payable by the Company.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

3. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Although the Company considers the disclosures in these unaudited consolidated financial statements to be adequate to make the information presented not misleading, certain information or footnote information normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted under the rules and regulations of the SEC. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of financial position at March 31, 2023, and December 31, 2022, results of operations, comprehensive income (loss), and changes in stockholder’s deficit for the three months ended March 31, 2023, and 2022 and cash flows for the three months ended March 31, 2023, and 2022 have been included. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 16, 2023. The interim results for March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023, or for any future interim periods.

The consolidated financial statements reflect the accounts of Senseonics Holdings, Inc. and its wholly owned operating subsidiary Senseonics, Incorporated. The Company views its operations and manages its business in one segment, glucose monitoring products. Operating segments are defined as components of an enterprise about which

separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. 

Certain prior year amounts have been reclassified to conform to the current-year presentation. An adjustment has been made to the Consolidated Statements of Operations and Comprehensive Income (Loss) to consolidate the line items Sales and marketing expenses and General and administrative expenses to Selling, general and administrative expenses in order to conform to current year presentation. These reclassifications had no effect on the reported results of operations.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to record expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. For available-for-sale debt securities in unrealized loss positions, the new standard requires allowances to be recorded instead of reducing the amortized cost of the investment. The Company currently holds investments in available-for-sale securities. The Company has not historically experienced collection issues or bad debts with trade receivables. Accordingly, the Company does not expect this to have a significant impact on its consolidated financial statements and related disclosures at this time. The Company adopted this guidance as of January 1, 2023 and its adoption did not have a material impact on the consolidated financial statements and related disclosures.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period. In the accompanying unaudited consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, recoverability of long-lived assets, deferred taxes and valuation allowances, fair value of investments, derivative assets and liabilities, obsolete inventory, warranty obligations, variable consideration related to revenue, bad debts, depreciable lives of property and equipment, and accruals for clinical study costs, which are accrued based on estimates of work performed under contract. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ from those estimates; however, management does not believe that such differences would be material.

Significant Accounting Policies

The accounting policies used by the Company in its presentation of interim financial results are consistent with those presented in Note 3 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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Revenue Recognition

3 Months Ended

Mar. 31, 2023

Revenue Recognition

Revenue Recognition

4. Revenue Recognition

The Company generates product revenue from sales of the Eversense system and related components and supplies to Ascensia, through a collaboration and commercialization agreement (the “Ascensia Commercialization Agreement”), third-party distributors in the European Union and to strategic fulfillment partners in the United States (collectively, the “Customers”), who then resell the products to health care providers and patients. Customers pay the Company for sales, regardless of whether or not the Customers resell the products to health care providers and patients. The Company’s policies for recognizing sales have not changed from those described in our Annual Report on Form 10-K for the year ended December 31, 2022.

Revenue by Geographic Region

The following table sets forth net revenue derived from the Company’s two primary geographical markets, the United States and outside of the United States, based on the geographic location to which the Company delivers the product, for the three months ended March 31, 2023 and 2022:

	March 31, 2023
			%
(Dollars in thousands)	Amount		of Total
Revenue, net:
United States	$	2,162	52.3	%
Outside of the United States		1,975	47.7
Total	$	4,137	100.0	%
	Three Months Ended
	March 31, 2022
			%
(Dollars in thousands)	Amount		of Total
Revenue, net:
United States	$	767	30.9	%
Outside of the United States		1,714	69.1
Total	$	2,481	100.0	%

Contract Assets

Contract assets consist of unbilled receivables from customers and are recorded at net realizable value and relate to the revenue share variable consideration from the Ascensia Commercialization Agreement. Accounts receivable – related parties, net as of March 31, 2023, and December 31, 2022 included unbilled accounts receivable of $1.5 million and $1.7 million, respectively. The Company expects to invoice and collect all unbilled accounts receivable within 12 months.

Concentration of Revenue and Customers

For the three months ended March 31, 2023 and 2022, the Company derived 92% and 88%, respectively, of its total revenue from one customer, Ascensia. Revenues for these corresponding periods represent sales of sensors, transmitters and miscellaneous Eversense system components.

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Net Income (Loss) per Share

3 Months Ended

Mar. 31, 2023

Net Income (Loss) per Share

Net Income (Loss) per Share

5. Net Income (Loss) per Share

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. An aggregate of 83,951,061 shares of common stock issuable upon the exercise of the Exchange Warrant Shares

and the Purchase Warrant Shares held by PHC are included in the number of outstanding shares used for the computation of basic net income (loss) per share. Since the shares are issuable for little or no consideration, sometimes referred to as “penny warrants”, they are considered outstanding in the context of earnings per share, as discussed in ASC 260-10-45-13.

Dilutive net income (loss) per share is computed using the weighted average number of common shares outstanding during the period and, when dilutive, potential common share equivalents. Potentially dilutive common shares consist of shares issuable from restricted stock units, stock options, warrants and the Company’s convertible notes. Potentially dilutive common shares issuable upon vesting of restricted stock units and exercise of stock options and warrants are determined using the average share price for each period under the treasury stock method. Potentially dilutive common shares issuable upon conversion of the Company’s convertible notes are determined using the if converted method. The if-converted method assumes conversion of convertible securities at the beginning of the reporting period. Interest expense, dividends, and the changes in fair value measurement recognized during the period are added back to the numerator. The denominator includes the common shares issuable upon conversion of convertible securities.

In periods of net loss, all potentially dilutive common shares are excluded from the computation of the diluted net loss per share for those periods, as the effect would be anti-dilutive.

The following table sets forth the computation of basic and diluted net income (loss) per share for the periods shown:

		Three Months Ended March 31,
		2023		2022
Net income	$	1,324	$	86,718
Impact of conversion of dilutive securities		(2,293)		(104,575)
Dilutive Net loss	$	(969)	$	(17,857)
Net income (loss) per share
Basic	$	0.00	$	0.19
Diluted	$	(0.00)	$	(0.03)
Basic weighted average shares outstanding		497,473,222		455,942,886
Dilutive potential common stock outstanding
Stock-based awards		2,905,016		8,982,055
2023 Notes		—		4,617,646
2025 Notes		39,211,358		39,689,142
PHC Notes		—		65,151,893
Energy Capital Option		—		25,129,298
Warrants		943,217		5,685,919
Diluted weighted average shares outstanding		540,532,813		605,198,839

Outstanding anti-dilutive securities not included in the diluted net income (loss) per share calculations were as follows:

	Three Months Ended March 31,
	2023	2022
Stock-based awards	16,484,020	9,877,143
PHC Option	—	24,959,156
Energy Capital Preferred Shares	30,372,058	—
Warrants	427,821	179,606
Total anti-dilutive shares outstanding	47,283,899	35,015,905

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Marketable Securities

3 Months Ended

Mar. 31, 2023

Marketable Securities.

Marketable Securities

6. Marketable Securities

Marketable securities available for sale, were as follows (in thousands):

	March 31, 2023
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Commercial Paper	$	45,830		—		—	$	45,830
Corporate debt securities	$	13,327		—		(29)	$	13,298
Asset backed securities	$	8,223		—		(66)	$	8,157
Government and agency securities	$	24,356		—		(125)	$	24,231
Total	$	91,736	$	—	$	(220)	$	91,516

	December 31, 2022
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Commercial Paper	$	41,503		—		—	$	41,503
Corporate debt securities	$	32,331		—		(189)	$	32,142
Asset backed securities	$	8,363		—		(103)	$	8,260
Government and agency securities	$	38,956		—		(386)	$	38,570
Total	$	121,153	$	—	$	(678)	$	120,475

The following are the scheduled maturities as of March 31, 2023 (in thousands):

	Net		Fair
	Carrying Amount		Value
2023 (remaining nine months)	$	76,629	$	76,471
2024		8,364		8,361
2025		6,743		6,684
Total	$	91,736	$	91,516

The Company periodically reviews its portfolio of debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns. For debt securities where the fair value of the investment is less than the amortized cost basis, the Company assesses at the individual security level, for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment. Unrealized losses on available-for-sale securities at March 31, 2023 were not significant and were primarily due to changes in interest rates and not due to increased credit risk associated with specific securities. The Company does not intend to sell these impaired investments and it is not more likely than not that

the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity.

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Inventory, net

3 Months Ended

Mar. 31, 2023

Inventory, net

Inventory, net

7. Inventory, net

Inventory, net of reserves, consisted of the following (in thousands):

	March 31,		December 31,
	2023		2022
Finished goods	$	2,595	$	1,697
Work-in-process		4,074		4,057
Raw materials		1,526		1,552
Total	$	8,195	$	7,306

The Company charged less than $0.1 million to cost of sales for each of the three months ended March 31, 2023 and March 31, 2022 to reduce the value of inventory for items that are potentially obsolete due to expiry, in excess of product demand, or to adjust costs to their net realizable value.

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Prepaid Expenses and Other Current Assets, and Deposits and other assets

3 Months Ended

Mar. 31, 2023

Prepaid Expenses and Other Current Assets, and Deposits and other assets

Prepaid Expenses and Other Current Assets, and Deposits and other assets

8. Prepaid Expenses and Other Current Assets, and Deposits and other assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	March 31,		December 31,
	2023		2022
Contract manufacturing⁽¹⁾	$	3,868	$	4,097
Insurance		983		1,243
Clinical and Preclinical		695		924
Research and development		251		67
IT and software		133		189
Interest receivable		130		336
Sales and Marketing		113		158
Rent and utilities		106		132
Other		14		12
Accounting and Audit		—		270
Total prepaid expenses and other current assets	$	6,293	$	7,428

(1) Includes deposits to contract manufacturers for manufacturing process.

Deposits and other assets as of March 31, 2023 and December 31, 2022, were $3.0 million and $3.1 million, respectively. As of March 31, 2023, deposits and other assets is mainly comprised of $2.9 million for our right-of-use asset related to our operating lease of 33,000 square feet of research and office space for our corporate headquarters. In June 2022, the Company extended our lease for an additional five-year term.

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Accrued Expenses, Other Current Liabilities, and Other Liabilities

3 Months Ended

Mar. 31, 2023

Accrued Expenses, Other Current Liabilities, and Other Liabilities

Accrued Expenses, Other Current Liabilities, and Other Liabilities

9. Accrued Expenses, Other Current Liabilities, and Other Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	March 31,		December 31,
	2023		2022
Research and development	$	4,926	$	3,502
Contract manufacturing		2,643		2,480
Professional and administration services		2,162		1,053
Compensation and benefits		1,521		4,699
Product warranty and replacement obligations		772		781
Operating lease		661		725
Interest on notes payable		560		2,050
Sales and marketing services		315		149
Other		71		14
Total accrued expenses and other current liabilities	$	13,631	$	15,453

Other liabilities as of March 31, 2023 and December 31, 2022, were $2.6 million and $2.7 million, respectively. Other liabilities is comprised of the non-current portion of our operating lease liability for our corporate headquarters. In June 2022, the Company extended our lease for an additional five-year term. We recorded a modification to the lease liability upon renewal to reflect our obligation to make the additional lease payments.

The current portion of our operating lease liability is included in the line-item accrued expenses and other current liabilities on our balance sheet. As of March 31, 2023 and December 31, 2022, the current portion of the operating lease liability was $0.7 million and $0.7 million, respectively.

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Product Warranty Obligations

3 Months Ended

Mar. 31, 2023

Product Warranty Obligations

Product Warranty Obligations

10. Product Warranty Obligations

The Company provides a warranty of one year on its smart transmitters. Additionally, the Company may also replace Eversense system components that do not function in accordance with the product specifications. Estimated replacement costs are recorded at the time of shipment as a charge to cost of sales in the consolidated statement of operations and are developed by analyzing product performance data and historical replacement experience, including comparing actual replacements to revenue.

At each March 31, 2023, and December 31, 2022, the warranty reserve was $0.8 million and $0.8 million, respectively. The following table provides a reconciliation of the change in estimated warranty liabilities for the three months ended March 31, 2023, and for the twelve months ended December 31, 2022 (in thousands):

	March 31,		December 31,
	2023		2022
Balance at beginning of the period	$	781	$	723
Provision for warranties during the period		—		166
Settlements made during the period		(9)		(108)
Balance at end of the period	$	772	$	781

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Notes Payable, Preferred Stock and Stock Purchase Warrants

3 Months Ended

Mar. 31, 2023

Notes Payable, Preferred Stock and Stock Purchase Warrants

Notes Payable, Preferred Stock and Stock Purchase Warrants

11. Notes Payable, Preferred Stock and Stock Purchase Warrants

Term Loans

PPP Loan

On April 22, 2020, the Company received $5.8 million in loan funding from the PPP pursuant to the CARES Act, as amended by the Flexibility Act, and administered by the Small Business Administration (“SBA”). The unsecured loan (the “PPP Loan”) was evidenced by the PPP Note dated April 21, 2020 (the “PPP Note”) in the principal amount of $5.8 million with Silicon Valley Bank (“SVB”).

Under the terms of the PPP Note and the PPP Loan, interest accrued on the outstanding principal at a rate of 1.0% per annum. The term of the PPP Note was two years. In April 2022, the Company repaid the outstanding principal and accrued interest in full.

Convertible Preferred Stock and Warrants

On November 9, 2020, the Company entered into the Equity Line Agreement with Energy Capital, which provides that, upon the terms and subject to the conditions and limitations set forth therein, Energy Capital is committed to purchase up to an aggregate of $12.0 million of shares of the Company’s Series B Preferred Stock at the Company’s request from time to time during the 24-month term of the Equity Line Agreement. Under the Equity Line Agreement, beginning January 21, 2021, subject to the satisfaction of certain conditions, including the Company having less than $8 million of cash, cash equivalents and other available credit (aside from availability under the Equity Line Agreement), the Company has the right, at sole discretion, to present Energy Capital with a Regular Purchase Notice directing Energy Capital (as principal) to purchase shares of Series B Preferred Stock at a price of $1,000 per share (not to exceed $4.0 million worth of shares) once per month, up to an aggregate of $12.0 million of the Company’s Series B Preferred Stock at the Purchase Price equal to $1,000 per share of Series B Preferred Stock, with each share of Series B Preferred Stock initially convertible into common stock, beginning six months after the date of its issuance, at a conversion price of $0.3951 per share, subject to customary anti-dilution adjustments, including in the event of any stock split. The Equity Line Agreement provides that the Company shall not affect any Regular Purchase Notice under the Equity Line Agreement on any date where the closing price of the Company’s common stock on the NYSE American is less than $0.25 without the approval of Energy Capital. In addition, beginning on January 1, 2022, since there have been no sales of the Series B Preferred Stock pursuant to the Equity Line Agreement, Energy Capital has the right, at its sole discretion, by its delivery to the Company of a Regular Purchase Notice, to purchase up to the $12.0 million of Series B Preferred Stock under the Equity Line Agreement at the Purchase Price. On November 7, 2022, Energy Capital exercised in full its right to purchase $12.0 million of Series B Preferred Stock.

The Company accounted for the Equity Line Agreement as a put/call option (the “Energy Capital Option”). This put/call option was classified as a liability in accordance with ASC 480, Distinguishing liabilities from equity, on the Company’s balance sheet and was recorded at the estimated fair value of $4.2 million upon issuance. The put/call option was required to be remeasured to fair value at each reporting period with the change recorded in change in fair value of derivatives that is a component of other income (expense). In connection with the execution of the Equity Line Agreement, the Company incurred $7.6 million in debt issuance costs in fiscal year 2020. The fair value of the Energy Capital Option as of December 31, 2021 was $69.4 million. The Company adjusted the Energy Capital Option to its fair value of $25.7 million on the exercise date, recognizing a fair value adjustment gain of $43.7 million.

Concurrently with entry into the Equity Line Agreement, the Company issued a warrant to Energy Capital, exercisable beginning on May 9, 2021, to purchase up to 10,000,000 shares of common stock at an exercise price of $0.3951 per share (the “Warrant”). The Warrant was exercised on a net basis in February 2022 and Energy Capital received 8,917,535 shares of common stock upon the net exercise of the Warrants.

On March 13, 2023, pursuant to the Securities Purchase Agreement with PHC, the Company issued and sold to PHC in a Private Placement a Purchase Warrant to purchase 15,425,750 Purchase Warrant Shares. The Purchase Warrant is a “pre-funded” warrant with a nominal exercise price of $0.001 per Purchase Warrant Share. On the Private Placement

Closing Date, the Company received aggregate gross proceeds of $15.0 million, before deducting private placement expenses payable by the Company. After issuance, all or any part of the Purchase Warrant shall be exercisable by the holder at any time and from time to time.

The Company determined that the Purchase Warrant shall be classified as equity in accordance with ASC Topic 480, Distinguishing Liabilities from Equity and ASC Topic 815. At issuance, the Company recorded the estimated fair value of the Purchase Warrant in the amount of $14.3 million as additional paid-in-capital in the Company’s consolidated balance sheets.

Because PHC was an existing stockholder of the Company at the time of the transaction, the $0.7 million excess of the purchase price over the fair value of the Purchase Warrant was recognized as an equity transaction and recorded as a capital contribution made by PHC to the Company as additional paid-in-capital in the Company’s consolidated balance sheets.

Additionally, on March 13, 2023, the Company entered into an Exchange Agreement with PHC, pursuant to which PHC agreed to exchange its $35.0 million aggregate principal amount of the PHC Notes, including all accrued and unpaid interest thereon, for the Exchange Warrant to purchase up to 68,525,311 Exchange Warrant Shares. The Exchange Warrant is a “pre-funded” warrant with a nominal exercise price of $0.001 per Exchange Warrant Share. After issuance, all or any part of the Purchase Warrant shall be exercisable by the holder at any time and from time to time. The number of Exchange Warrant Shares represents the number of shares of common stock previously issuable upon conversion of the PHC Notes, in accordance with the original terms of the notes, including a number of shares in respect of accrued and unpaid interest through the closing date, plus additional shares with a value of $675,000 reflecting a portion of the future interest payments forgone by PHC. On March 31, 2023 (6:00 am Japan Standard Time on April 1, 2023), the Exchange was consummated, and the Company issued the Exchange Warrant to PHC in consideration for the cancellation of the PHC Notes.

The Company determined that the Exchange Warrant shall be classified as equity in accordance with ASC 480 and ASC 815. At March 31, 2023, the Company recorded the estimated fair value of the Exchange Warrant in the amount of $48.6 million as additional paid-in-capital in the Company’s consolidated balance sheets.

As of March 31, 2023, the Purchase Warrant and the Exchange Warrant remained unexercised and outstanding. As they are prefunded warrants, the Company included the entirety of the warrant shares as weighted average outstanding shares in the calculation of its basic earnings per share.

Convertible Notes

PHC Notes

On August 9, 2020, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with PHC, as the purchaser (together with the other purchasers from time-to-time party thereto, the “Note Purchasers”) and Alter Domus (US) LLC, as collateral agent. Pursuant to the Note Purchase Agreement, the Company borrowed $35.0 million in aggregate principal through the issuance and sale of the PHC Notes on August 14, 2020 (the “Closing Date”). The Company also issued 2,941,176 shares of its common stock, $0.001 par value per share to PHC as a financing fee (the “Financing Fee Shares”) on the Closing Date. The Financing Fee Shares are accounted for as debt discount in the amount of $1.5 million.

The PHC Notes are senior secured obligations of the Company and will be guaranteed on a senior secured basis by the Company’s wholly owned subsidiary, Senseonics, Incorporated. Interest at the initial annual rate of 9.5% is payable semi-annually in cash or, at the Company’s option, payment in kind. The interest rate decreased to 8.0% in April 2022 as a result of the Company having obtained FDA approval for the 180-day Eversense E3 system for marketing in the United States. The maturity date for the PHC Notes is October 31, 2024 (the “Maturity Date”). The obligations under the PHC Notes are secured by substantially all of the Company’s and its subsidiary’s assets.

The Note Purchasers are entitled to convert the PHC Notes to common stock at a conversion rate of 1,867.4136 shares per $1,000 principal amount of the PHC Notes (including any interest added thereto as payment in kind), equivalent to a conversion price of approximately $0.54 per share, subject to specified anti-dilution adjustments, including adjustments for the Company’s issuance of equity securities on or prior to April 30, 2022 below the conversion price. In addition, following a notice of redemption or certain corporate events that occur prior to the maturity date, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its PHC Notes in connection with such notice of redemption or corporate event. In certain circumstances, the Company will be required to pay cash in lieu of delivering make whole shares unless the Company obtains stockholder approval to issue such shares.

Subject to specified conditions, on or after October 31, 2022, the PHC Notes are redeemable by the Company if the closing sale price of the common stock exceeds 275% of the conversion price for a specified period of time and subject to certain conditions upon 10 days prior written notice at a cash redemption price equal to the then outstanding principal amount (including any payment in kind interest which has been added to such amount), plus any accrued but unpaid interest. On or after October 31, 2023, the PHC Notes are redeemable by the Company upon 10 days prior written notice at a cash redemption price equal to the then outstanding principal amount (including any payment in kind interest which has been added to such amount), plus any accrued but unpaid interest, plus a call premium of 130% if redeemed at least six months prior to the Maturity Date or a call premium of 125% if redeemed within six months of the Maturity Date.

The Note Purchase Agreement contains customary terms and covenants, including financial covenants, such as operating within an approved budget and achieving minimum revenue and liquidity targets, and negative covenants, such as limitations on indebtedness, liens, mergers, asset transfers, certain investing activities and other matters customarily restricted in such agreements. Most of these restrictions are subject to certain minimum thresholds and exceptions. The Note Purchase Agreement also contains customary events of default, after which the PHC Notes become due and payable immediately, including defaults related to payment compliance, material inaccuracy of representations and warranties, covenant compliance, material adverse changes, bankruptcy and insolvency proceedings, cross defaults to certain other agreements, judgments against the Company, change of control or delisting events, termination of any guaranty, governmental approvals, and lien priority.

The Company also has the option to sell and issue PHC up to $15.0 million of convertible preferred stock on or before December 31, 2022 (the “PHC Option”), which was initially contingent upon obtaining FDA approval for the 180-day Eversense product for marketing in the United States before such date, and which approval the Company successfully obtained in February 2022. The PHC option was not exercised and expired on December 31, 2022 and the Company recognized a loss on extinguishment of $0.1 million.

The Note Purchase Agreement also contained several provisions requiring bifurcation as a separate derivative liability including an embedded conversion feature, mandatory prepayment upon event of default that constitutes a breach of the minimum revenue financial covenant, optional redemption upon an event of default, change in interest rate after PMA approval and default interest upon an event of default. On the date of issuance, the Company recorded the fair value of the embedded features in the amount of $25.8 million as a derivative liability in the Company’s consolidated balance sheets in accordance with ASC 815. The derivative is adjusted to fair value at each reporting period, with the change in the fair value recorded in change in fair value of derivatives that is a component of other income (expense) in the Company’s consolidated statement of operations and comprehensive loss.

In connection with the issuance of the Note Purchase Agreement, the Company incurred $2.9 million in debt issuance costs and debt discounts. The associated debt issuance costs were recorded as a contra liability in the amount of $1.4 million and are deferred and amortized as additional interest expense over the term of the notes. There have been no conversions of PHC Notes since inception of the Note Purchase Agreement.

As described above, the Exchange Agreement with PHC was consummated on March 31, 2023, whereby PHC exchanged the PHC Notes in $35.0 million principal amount and all accrued and unpaid interest for the Exchange Warrant. On March 31, 2023, the Company was released from its obligation under the PHC Notes.

Upon execution of the Exchange Agreement, the exercise of the original conversion feature of the PHC Notes became remote. Accordingly, the Company remeasured the embedded derivative to its fair value of $0. The Company recognized a change in fair value of the embedded derivative of $44.2 million in the caption “Exchange related gain, net” that is a component of other income (expense) in the Company’s consolidated statement of operations and comprehensive loss.

The Company accounted for the Exchange as an extinguishment of the PHC Notes, and thus, it derecognized the PHC Notes in its consolidated balance sheets and recognized a loss of $25.4 million as the difference between the carrying value plus accrued interest of the PHC Notes of $23.2 million and the $48.6 million fair value of the Exchange Warrant as an extinguishment loss in the caption “Exchange related gain, net” that is a component of other income (expense) in the Company’s consolidated statement of operations and comprehensive loss. As a result of the Exchange, the Company recognized a total net gain on exchange of the PHC notes of $18.8 million representing the gain on change in the fair value of the PHC Notes conversion feature recognized as an embedded derivative and the loss on extinguishment of the PHC Notes in exchange for the Exchange Warrant.

2025 Notes

In July 2019, the Company issued $82.0 million in aggregate principal amount of senior convertible notes that will mature on January 15, 2025 (the “2025 Notes”), unless earlier repurchased or converted. The 2025 Notes are convertible, at the option of the holders, into shares of the Company’s common stock, at an initial conversion rate of 757.5758 shares per $1,000 principal amount of the 2025 Notes (equivalent to an initial conversion price of approximately $1.32 per share).

The 2025 Notes also contained an embedded conversion option requiring bifurcation as a separate derivative liability, along with the fundamental change make-whole provision and the cash settled fundamental make-whole shares provision. The derivative is adjusted to fair value at each reporting period, with the change in the fair value recorded to other income (expense) in the Company’s consolidated statement of operations and comprehensive loss. The fair value of the derivative at March 31, 2023 and December 31, 2022 was $2.1 million and $7.9 million, respectively.

On April 24, 2020, $24.0 million aggregate principal of the Company’s outstanding 2025 Notes held by Highbridge Capital Management, LLC (“Highbridge”) were exchanged for (i) $15.7 million of Second Lien Notes (the “Second Lien Notes”), (ii) 11,026,086 shares of common stock, (iii) warrants to purchase up to 4,500,000 shares of common stock at an exercise price of $0.66 per share, and (iv) $0.3 million in accrued and unpaid interest on the 2025 Notes being exchanged. This transaction modified the original 2025 Notes outstanding with Highbridge and resulted in $13.2 million of deferred issuance fees and debt discounts associated with the exchanged 2025 Notes being transferred as a discount to the Second Lien Notes.

In January 2021, there were conversions of $6.5 million of outstanding principal amount of the 2025 notes for 4,924,998 shares of common stock. Accordingly, $3.2 million of allocated deferred issuance costs and debt discounts were recognized as a loss on extinguishment of debt. There were no conversions of 2025 Notes during the three months ended March 31, 2023.

2023 Notes

In the first quarter of 2018, the Company issued $53.0 million in aggregate principal amount of senior convertible notes due February 1, 2023 (the “2023 Notes”). In July 2019, the Company used the net proceeds from the issuance of the 2025 Notes to repurchase $37.0 million aggregate principal amount of the outstanding 2023 Notes. Each $1,000 of principal of the 2023 Notes is initially convertible into 294.1176 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $3.40 per share, subject to adjustment upon the occurrence of specified events. Holders may convert at any time prior to February 1, 2023. Holders who convert on or after the date that is six months after the last date of original issuance of the 2023 Notes but prior to February 1, 2021, may also be entitled to receive, under certain circumstances, an interest make-whole payment payable in shares of common stock. If specific corporate events occur prior to the maturity date, the Company will increase the conversion rate pursuant to the make-whole fundamental change provision for a holder who elects to convert their 2023 Notes in

connection with such an event in certain circumstances. Additionally, if a fundamental change occurs prior to the maturity date, holders of the 2023 Notes may require the Company to repurchase all or a portion of their 2023 Notes for cash at a repurchase price equal to 100% of the principal amount plus any accrued and unpaid interest.

The Company bifurcated the embedded conversion option, along with the interest make-whole provision and make-whole fundamental change provision, and in January 2018 recorded the embedded features as a debt discount and derivative liability in the Company’s consolidated balance sheets at its initial fair value of $17.3 million. Additionally, the Company incurred transaction costs of $2.2 million. The debt discount and transaction costs are being amortized to interest expense over the term of the 2023 Notes at an effective interest rate of 9.30%. The derivative is adjusted to fair value at each reporting period, with the change in the fair value recorded to other income (expense) in the Company’s consolidated statement of operations and comprehensive loss. On January 31, 2023, the Company repaid the outstanding principal and accrued interest in full. The derivative was unexercised upon maturity and the fair value in the amount of $0.02 million was recognized as an extinguishment gain in the caption “Other income (expense)” in Company’s consolidated statement of operations and comprehensive loss.

The following carrying amounts were outstanding under the Company’s notes payable as of March 31, 2023 and December 31, 2022 (in thousands):

	March 31, 2023
	Principal ($)	Debt Discount ($)	Issuance Costs ($)	Carrying Amount ($)
2025 Notes	51,199	(13,494)	(226)	37,479
	December 31, 2022
	Principal ($)	Debt Discount ($)	Issuance Costs ($)	Carrying Amount ($)
2023 Notes	15,700	(121)	-	15,579
2025 Notes	51,199	(15,029)	(252)	35,918
PHC Notes	35,000	(13,698)	(837)	20,465

Interest expense related to the notes payable for the three months ended March 31, 2023 and 2022 was as follows (dollars in thousands):

	Three Months Ended March 31, 2023
	Interest Rate	Interest ($)	Debt Discount and Fees ($)	Issuance Costs ($)	Total Interest Expense ($)
2023 Notes	5.25%	69	120	-	189
2025 Notes	5.25%	672	1,535	26	2,233
PHC Notes	8.00%	700	1,442	88	2,230
Total		1,441	3,097	114	4,652
	Three Months Ended March 31, 2022
	Interest Rate	Interest ($)	Debt Discount and Fees ($)	Issuance Costs ($)	Total Interest Expense ($)
2023 Notes	5.25%	206	333	-	539
2025 Notes	5.25%	658	1,274	21	1,953
PHC Notes	9.50%	831	1,076	66	1,973
PPP Loan	1.00%	5	-	-	5
Total		1,700	2,683	87	4,470

The following are the scheduled maturities of the Company’s notes payable as of March 31, 2023 (in thousands):

2023 (remaining nine months)	$	—
2024		—
2025		51,199
Total	$	51,199

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Stockholders' Equity (Deficit)

3 Months Ended

Mar. 31, 2023

Stockholders' Equity (Deficit)

Stockholders' Equity (Deficit)

12. Stockholders’ Equity (Deficit)

In November 2021, the Company entered into the 2021 Sales Agreement with Jefferies, under which the Company could offer and sell, from time to time, at its sole discretion, shares of its common stock having an aggregate offering price of up to $150.0 million through Jefferies as the sales agent in an “at the market” offering. Jefferies will receive a commission up to 3.0% of the gross proceeds of any common stock sold through Jefferies under the 2021 Sales Agreement. In 2022, the Company received $34.4 million in net proceeds from the sale of 15,160,899 shares of its common stock under the 2021 Sales Agreement. There were no shares sold under the 2021 Sales Agreement during the three months ended March 31, 2023.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Stock-Based Compensation

Stock-Based Compensation

13. Stock-Based Compensation

2015 Plan

In December 2015, the Company adopted the 2015 Equity Incentive Plan (the “2015 Plan”), under which incentive stock options, non-qualified stock options and restricted stock units may be granted to the Company’s employees and certain other persons, such as officers and directors, in accordance with the 2015 Plan provisions. In February 2016, the Company’s Board of Directors adopted, and the Company’s stockholders approved, an Amended and Restated 2015 Equity Incentive Plan (the “Amended and Restated 2015 Plan”), which became effective on February 20, 2016. The Company’s Board of Directors may terminate the Amended and Restated 2015 Plan at any time. Options granted under the Amended and Restated 2015 Plan expire ten years after the date of grant.

Pursuant to the Amended and Restated 2015 Plan, the number of shares of the Company’s common stock reserved for issuance automatically increases on January 1 of each year, ending on January 1, 2026, by 3.5% of the total number of shares of its common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by its Board of Directors. As of March 31, 2023, 39,680,701 shares remained available for grant under the Amended and Restated 2015 Plan.

Inducement Plan

On May 30, 2019, the Company adopted the Senseonics Holdings, Inc. Inducement Plan (the “Inducement Plan”), pursuant to which the Company reserved 1,800,000 shares of the Company’s common stock for issuance. The only persons eligible to receive grants of awards under the Inducement Plan are individuals who satisfy the standards for inducement grants in accordance with NYSE American Company Guide Section 711(a), including individuals who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company. An “Award” is any right to receive the Company’s common stock pursuant to the Inducement Plan, consisting of non-statutory options, restricted stock unit awards and other equity incentive awards. As of March 31, 2023, 579,056 shares remained available for grant under the Inducement Plan.

Commercial Equity Plan

On January 30, 2023, the Company adopted the Senseonics Holdings, Inc. 2023 Commercial Equity Plan (the “Commercial Equity Plan”), pursuant to which the Company reserved 10,000,000 shares of common stock for issuance. Eligible recipients under the plan are non-employees of Senseonics, including employees of our global commercial partner, Ascensia, who assist with the commercialization of our products. An “Award” is any right to receive the Company’s common stock pursuant to the Commercial Equity Plan, consisting of non-statutory options and restricted stock unit awards. As of March 31, 2023, there were no grants made under the plan.

2016 Employee Stock Purchase Plan

In February 2016, the Company adopted the 2016 Employee Stock Purchase Plan, (the “2016 ESPP”). The 2016 ESPP became effective on March 17, 2016. The maximum number of shares of common stock that may be issued under the 2016 ESPP was initially 800,000 shares and automatically increases on January 1 of each year, ending on and

including January 1, 2026, by 1.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year; provided, however, the Board of Directors may act prior to the first day of any calendar year to provide that there will be no January 1 increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year will be a lesser number of shares of common stock. As of March 31, 2023, there were 17,760,078 shares of common stock available for issuance under the 2016 ESPP. For the three months ended March 31, 2023, there were purchases of 86,816 shares of common stock pursuant to this plan.

The 2016 ESPP permits participants to purchase shares of the Company’s common stock through payroll deductions of up to 15% of their earnings. Unless otherwise determined by the administrator, the purchase price of the shares will be 85% of the lower of the fair market value of common stock on the first day of an offering or on the date of purchase. Participants may end their participation at any time and deductions not yet used in a purchase are refundable upon employment termination. The Company initiated its first 2016 ESPP offering period on August 1, 2019 and new offering periods occur every six months thereafter, each consisting of two purchase periods of six months in duration ending on or about January 31^st and July 31^st of each year. A participant may only be in one offering at a time. On February 1, 2020, there were 566,573 shares purchased in connection with the offering period. The 2016 ESPP contains an offering reset provision whereby if the fair market value of a share on offering date of an ongoing offering is less than or equal to the fair market value of a share on a new offering date, the ongoing offering will terminate immediately after the purchase date and rolls over to the new offering.

The 2016 ESPP is considered compensatory for financial reporting purposes.

1997 Plan

On May 8, 1997, the Company adopted the 1997 Stock Option Plan (the “1997 Plan”), under which incentive stock options, non-qualified stock options, and restricted stock awards may be granted to the Company’s employees and certain other persons in accordance with the 1997 Plan provisions. Approximately 1,223,273 shares of the Company’s common stock underlying options have vested under the 1997 Plan. Upon the effectiveness of the 2015 Plan, the Company no longer grants any awards under the 1997 Plan.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Measurements

Fair Value Measurements

14. Fair Value Measurements

The following table represents the fair value hierarchy of the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2023 and December 31, 2022 (in thousands):

	March 31, 2023
	Total		Level 1		Level 2		Level 3
Assets
Money market funds⁽¹⁾	$	39,197	$	39,197		—		—
Commercial paper		45,830		—		45,830		—
Corporate debt securities		13,298		—		13,298		—
Asset backed securities		8,157		—		8,157		—
Government and agency securities		24,231		19,750		4,481		—
Liabilities
Embedded features of the 2025 Notes		2,081		—		—		2,081

	December 31, 2022
	Total		Level 1		Level 2		Level 3
Assets
Money market funds⁽¹⁾	$	34,658	$	34,658		—		—
Commercial paper		41,503		—		41,503		—
Corporate debt securities		32,142		—		32,142		—
Asset backed securities		8,260		—		8,260		—
Government and agency securities		38,570		31,627		6,943		—
Liabilities
Embedded features of the 2023 Notes		20		—		20		—
Embedded features of the PHC Notes		44,191		—		—		44,191
Embedded features of the 2025 Notes		7,859		—		—		7,859

(1)Classified as cash and cash equivalents due to their short-term maturity

The following table provides a reconciliation of the beginning and ending net balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands):

	Level 3
	Instruments
December 31, 2022	$	52,050
Gain on change in fair value of embedded features of the PHC Notes		(44,191)
Gain on change in fair value of embedded features of the 2025 Notes		(5,778)
March 31, 2023	$	2,081

The recurring Level 3 fair value measurements of the embedded features of the notes payable and preferred stock, include the following significant unobservable inputs at March 31, 2023:

	2025 Notes
Unobservable Inputs	Assumptions
Stock price volatility	40.0 - 50.0	%
Probabilities of conversion provisions	5.0 - 95.0	%
Credit spread	13.24	%
Recovery rate	(1.26)	%
Dividend yield	-	%

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Income Taxes

3 Months Ended

Mar. 31, 2023

Income Taxes

Income Taxes

15. Income Taxes

The Company has not recorded any tax provision or benefit for the three months ended March 31, 2023 or March 31, 2022. The Company has provided a valuation allowance for the full amount of its net deferred tax assets since realization of any future benefit from deductible temporary differences, NOL carryforwards and research and development credits is not more-likely-than-not to be realized at March 31, 2023 and December 31, 2022.

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Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions

Related Party Transactions

16. Related Party Transactions

PHC has a noncontrolling ownership interest in the Company. In addition, PHC has representation on the Company’s board of directors. The Company entered into a financing agreement with PHC on August 9, 2020 and entered into an exchange agreement with PHC during 2023 (see Note 11 for further discussion). Ascensia, through the ownership interests of its parent company, PHC, is a related party. Revenue from Ascensia during the three months ended March 31, 2023 and March 31, 2022 was $3.8 million and $2.2 million, respectively.

The amount due from Ascensia as of March 31, 2023 and December 31, 2022 was $2.9 million and $2.3 million, respectively. The amount due to Ascensia as of March 31, 2023 and December 31, 2022 was $0.8 million and $0.9 million, respectively.

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Subsequent Events

3 Months Ended

Mar. 31, 2023

Subsequent Events

Subsequent Events

17. Subsequent Events

The Company has evaluated all subsequent events through the filing date of this Form 10-Q with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of March 31, 2023, and events which occurred subsequently but were not recognized in the financial statements. There were no subsequent events that required recognition or disclosure.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Although the Company considers the disclosures in these unaudited consolidated financial statements to be adequate to make the information presented not misleading, certain information or footnote information normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted under the rules and regulations of the SEC. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of financial position at March 31, 2023, and December 31, 2022, results of operations, comprehensive income (loss), and changes in stockholder’s deficit for the three months ended March 31, 2023, and 2022 and cash flows for the three months ended March 31, 2023, and 2022 have been included. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 16, 2023. The interim results for March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023, or for any future interim periods.

The consolidated financial statements reflect the accounts of Senseonics Holdings, Inc. and its wholly owned operating subsidiary Senseonics, Incorporated. The Company views its operations and manages its business in one segment, glucose monitoring products. Operating segments are defined as components of an enterprise about which

separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. 

Certain prior year amounts have been reclassified to conform to the current-year presentation. An adjustment has been made to the Consolidated Statements of Operations and Comprehensive Income (Loss) to consolidate the line items Sales and marketing expenses and General and administrative expenses to Selling, general and administrative expenses in order to conform to current year presentation. These reclassifications had no effect on the reported results of operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to record expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. For available-for-sale debt securities in unrealized loss positions, the new standard requires allowances to be recorded instead of reducing the amortized cost of the investment. The Company currently holds investments in available-for-sale securities. The Company has not historically experienced collection issues or bad debts with trade receivables. Accordingly, the Company does not expect this to have a significant impact on its consolidated financial statements and related disclosures at this time. The Company adopted this guidance as of January 1, 2023 and its adoption did not have a material impact on the consolidated financial statements and related disclosures.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period. In the accompanying unaudited consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, recoverability of long-lived assets, deferred taxes and valuation allowances, fair value of investments, derivative assets and liabilities, obsolete inventory, warranty obligations, variable consideration related to revenue, bad debts, depreciable lives of property and equipment, and accruals for clinical study costs, which are accrued based on estimates of work performed under contract. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ from those estimates; however, management does not believe that such differences would be material.

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2023

Revenue Recognition

Schedule of revenue by geographic region

	March 31, 2023
			%
(Dollars in thousands)	Amount		of Total
Revenue, net:
United States	$	2,162	52.3	%
Outside of the United States		1,975	47.7
Total	$	4,137	100.0	%
	Three Months Ended
	March 31, 2022
			%
(Dollars in thousands)	Amount		of Total
Revenue, net:
United States	$	767	30.9	%
Outside of the United States		1,714	69.1
Total	$	2,481	100.0	%

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Net Income (Loss) per Share (Tables)

3 Months Ended

Mar. 31, 2023

Net Income (Loss) per Share

Schedule of computation of basic and diluted net income per share

		Three Months Ended March 31,
		2023		2022
Net income	$	1,324	$	86,718
Impact of conversion of dilutive securities		(2,293)		(104,575)
Dilutive Net loss	$	(969)	$	(17,857)
Net income (loss) per share
Basic	$	0.00	$	0.19
Diluted	$	(0.00)	$	(0.03)
Basic weighted average shares outstanding		497,473,222		455,942,886
Dilutive potential common stock outstanding
Stock-based awards		2,905,016		8,982,055
2023 Notes		—		4,617,646
2025 Notes		39,211,358		39,689,142
PHC Notes		—		65,151,893
Energy Capital Option		—		25,129,298
Warrants		943,217		5,685,919
Diluted weighted average shares outstanding		540,532,813		605,198,839

Schedule of anti-dilutive shares which have been excluded from the computation of diluted net loss per share

	Three Months Ended March 31,
	2023	2022
Stock-based awards	16,484,020	9,877,143
PHC Option	—	24,959,156
Energy Capital Preferred Shares	30,372,058	—
Warrants	427,821	179,606
Total anti-dilutive shares outstanding	47,283,899	35,015,905

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Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2023

Marketable Securities.

Schedule of marketable securities available for sale

Marketable securities available for sale, were as follows (in thousands):

	March 31, 2023
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Commercial Paper	$	45,830		—		—	$	45,830
Corporate debt securities	$	13,327		—		(29)	$	13,298
Asset backed securities	$	8,223		—		(66)	$	8,157
Government and agency securities	$	24,356		—		(125)	$	24,231
Total	$	91,736	$	—	$	(220)	$	91,516

	December 31, 2022
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
Commercial Paper	$	41,503		—		—	$	41,503
Corporate debt securities	$	32,331		—		(189)	$	32,142
Asset backed securities	$	8,363		—		(103)	$	8,260
Government and agency securities	$	38,956		—		(386)	$	38,570
Total	$	121,153	$	—	$	(678)	$	120,475

Schedule of maturities of marketable securities

The following are the scheduled maturities as of March 31, 2023 (in thousands):

	Net		Fair
	Carrying Amount		Value
2023 (remaining nine months)	$	76,629	$	76,471
2024		8,364		8,361
2025		6,743		6,684
Total	$	91,736	$	91,516

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Inventory, net (Tables)

3 Months Ended

Mar. 31, 2023

Inventory, net

Schedule of Inventory, net

Inventory, net of reserves, consisted of the following (in thousands):

	March 31,		December 31,
	2023		2022
Finished goods	$	2,595	$	1,697
Work-in-process		4,074		4,057
Raw materials		1,526		1,552
Total	$	8,195	$	7,306

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Prepaid Expenses and Other Current Assets, and Deposits and other assets (Tables)

3 Months Ended

Mar. 31, 2023

Prepaid Expenses and Other Current Assets, and Deposits and other assets

Schedule of prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	March 31,		December 31,
	2023		2022
Contract manufacturing⁽¹⁾	$	3,868	$	4,097
Insurance		983		1,243
Clinical and Preclinical		695		924
Research and development		251		67
IT and software		133		189
Interest receivable		130		336
Sales and Marketing		113		158
Rent and utilities		106		132
Other		14		12
Accounting and Audit		—		270
Total prepaid expenses and other current assets	$	6,293	$	7,428

(1) Includes deposits to contract manufacturers for manufacturing process.

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Accrued Expenses, Other Current Liabilities, and Other Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Accrued Expenses, Other Current Liabilities, and Other Liabilities

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	March 31,		December 31,
	2023		2022
Research and development	$	4,926	$	3,502
Contract manufacturing		2,643		2,480
Professional and administration services		2,162		1,053
Compensation and benefits		1,521		4,699
Product warranty and replacement obligations		772		781
Operating lease		661		725
Interest on notes payable		560		2,050
Sales and marketing services		315		149
Other		71		14
Total accrued expenses and other current liabilities	$	13,631	$	15,453

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Product Warranty Obligations (Tables)

3 Months Ended

Mar. 31, 2023

Product Warranty Obligations

Schedule of change in estimated warranty liabilities

	March 31,		December 31,
	2023		2022
Balance at beginning of the period	$	781	$	723
Provision for warranties during the period		—		166
Settlements made during the period		(9)		(108)
Balance at end of the period	$	772	$	781

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Notes Payable, Preferred Stock and Stock Purchase Warrants (Tables)

3 Months Ended

Mar. 31, 2023

Notes Payable, Preferred Stock and Stock Purchase Warrants

Schedule of carrying amounts outstanding under the Company's notes payable

	March 31, 2023
	Principal ($)	Debt Discount ($)	Issuance Costs ($)	Carrying Amount ($)
2025 Notes	51,199	(13,494)	(226)	37,479
	December 31, 2022
	Principal ($)	Debt Discount ($)	Issuance Costs ($)	Carrying Amount ($)
2023 Notes	15,700	(121)	-	15,579
2025 Notes	51,199	(15,029)	(252)	35,918
PHC Notes	35,000	(13,698)	(837)	20,465

Schedule of interest expense related to the notes payable

	Three Months Ended March 31, 2023
	Interest Rate	Interest ($)	Debt Discount and Fees ($)	Issuance Costs ($)	Total Interest Expense ($)
2023 Notes	5.25%	69	120	-	189
2025 Notes	5.25%	672	1,535	26	2,233
PHC Notes	8.00%	700	1,442	88	2,230
Total		1,441	3,097	114	4,652
	Three Months Ended March 31, 2022
	Interest Rate	Interest ($)	Debt Discount and Fees ($)	Issuance Costs ($)	Total Interest Expense ($)
2023 Notes	5.25%	206	333	-	539
2025 Notes	5.25%	658	1,274	21	1,953
PHC Notes	9.50%	831	1,076	66	1,973
PPP Loan	1.00%	5	-	-	5
Total		1,700	2,683	87	4,470

Schedule of future maturities

2023 (remaining nine months)	$	—
2024		—
2025		51,199
Total	$	51,199

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Measurements

Schedule of fair value hierarchy of the Company's financial assets and liabilities measured at fair value on a recurring basis

The following table represents the fair value hierarchy of the Company’s financial assets and liabilities measured at fair value on a recurring basis at March 31, 2023 and December 31, 2022 (in thousands):

	March 31, 2023
	Total		Level 1		Level 2		Level 3
Assets
Money market funds⁽¹⁾	$	39,197	$	39,197		—		—
Commercial paper		45,830		—		45,830		—
Corporate debt securities		13,298		—		13,298		—
Asset backed securities		8,157		—		8,157		—
Government and agency securities		24,231		19,750		4,481		—
Liabilities
Embedded features of the 2025 Notes		2,081		—		—		2,081

	December 31, 2022
	Total		Level 1		Level 2		Level 3
Assets
Money market funds⁽¹⁾	$	34,658	$	34,658		—		—
Commercial paper		41,503		—		41,503		—
Corporate debt securities		32,142		—		32,142		—
Asset backed securities		8,260		—		8,260		—
Government and agency securities		38,570		31,627		6,943		—
Liabilities
Embedded features of the 2023 Notes		20		—		20		—
Embedded features of the PHC Notes		44,191		—		—		44,191
Embedded features of the 2025 Notes		7,859		—		—		7,859

(1)Classified as cash and cash equivalents due to their short-term maturity

Schedule of changes in the fair value of Level 3 derivative liability measured at fair value

The following table provides a reconciliation of the beginning and ending net balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands):

	Level 3
	Instruments
December 31, 2022	$	52,050
Gain on change in fair value of embedded features of the PHC Notes		(44,191)
Gain on change in fair value of embedded features of the 2025 Notes		(5,778)
March 31, 2023	$	2,081

Schedule of assumptions used to determine fair value

	2025 Notes
Unobservable Inputs	Assumptions
Stock price volatility	40.0 - 50.0	%
Probabilities of conversion provisions	5.0 - 95.0	%
Credit spread	13.24	%
Recovery rate	(1.26)	%
Dividend yield	-	%

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Liquidity and Capital Resources (Details) - USD ($) $ / shares in Units, $ in Thousands							1 Months Ended	3 Months Ended		12 Months Ended
	Mar. 13, 2023	Nov. 07, 2022	Jan. 01, 2022	Jan. 21, 2021	Nov. 09, 2020	Aug. 09, 2020	Nov. 30, 2021	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Net income								$ 1,324	$ 86,718
Gross profit								414	527	$ 2,700	$ (800)	$ (17,400)
Accumulated deficit								(807,542)		$ (808,866)
Amounts repaid under term loan								15,700
Issuance of common stock, net of issuance costs									$ 8,004
Cash, cash equivalents and marketable securities								$ 136,600
Common stock, par value per share (in dollars per share)								$ 0.001		$ 0.001
Proceeds from issuance of warrants	$ 15,000							$ 14,958
Purchase Warrant
Beneficial ownership by PHC (%)	15.00%
PHC Notes
Aggregate principal amount						$ 35,000		$ 35,000		$ 35,000
Financing fee shares issued						2,941,176
Conversion price						$ 0.54
Common stock, par value per share (in dollars per share)						$ 0.001
Ascensia | PHC Notes
Aggregate principal amount	$ 35,000					$ 35,000
Energy Capital, LLC
Cash and cash equivalents and other available credit				$ 8,000
Excess of the purchase price and fair value of option recorded in additional-paid-in-capital		$ 37,600
Energy Capital, LLC | Minimum
Issuance of convertible preferred stock, net of issuance costs				4,000
Energy Capital, LLC | Maximum
Issuance of convertible preferred stock, net of issuance costs				$ 12,000
Share price				$ 0.25
Exchange Warrant
Number of shares of common stock called by warrant	68,525,311
Exercise price of warrant (in dollars per share)	$ 0.001
Purchase Warrant
Number of shares of common stock called by warrant	15,425,750
Exercise price of warrant (in dollars per share)	$ 0.001
Purchase price of warrant (in dollars per share)	$ 0.97
Convertible Preferred Equity
Amount of possible additional debt principal amount						$ 15,000
Convertible Preferred Equity | Energy Capital, LLC
Issuance of convertible preferred stock, net of issuance costs					$ 12,000
Price per share (in dollars per share)				1,000
Collaboration and commercialization agreement term					24 months
Share price				$ 1,000
Threshold redemption period of temporary equity				6 months
Conversion price				$ 0.3951
Series B Preferred Stock
Issuance of convertible preferred stock, net of issuance costs		12,000
Regular Purchase, Shares Sold			0
Series B Preferred Stock | Energy Capital, LLC
Issuance of convertible preferred stock, net of issuance costs		$ 12,000
Open Market Sale Agreement
Shares issued								15,160,899		15,160,899
Proceeds from issuance of stock								$ 34,400		$ 34,400
Open Market Sale Agreement | Maximum
Issuance of common stock, net of issuance costs							$ 150,000
Percentage of commission on proceeds from common stock							3.00%

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Summary of Significant Accounting Policies - Segment Information (Details)	3 Months Ended
	Mar. 31, 2023 segment
Segment Information
Number of operating segments	1

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Revenue Recognition - Revenue by Geographic Region (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) item	Mar. 31, 2022 USD ($)
Revenue, net:
Revenue	$ 4,137	$ 2,481
Percent of total revenue	100.00%	100.00%
Number of geographical markets | item	2
Outside of the United States
Revenue, net:
Revenue	$ 1,975	$ 1,714
Percent of total revenue	47.70%	69.10%
United States
Revenue, net:
Revenue	$ 2,162	$ 767
Percent of total revenue	52.30%	30.90%

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Revenue Recognition - Contract Assets (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Revenue Recognition
Unbilled receivables from customers	$ 1.5	$ 1.7

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Revenue Recognition - Concentration of Revenue and Customers (Details) - Customer concentration risk - Ascensia - customer	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Concentration Risk [Line Items]
Number of customers	1	1
Revenue
Concentration Risk [Line Items]
Concentration Risk, Percentage	92.00%	88.00%

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Net Income (Loss) per Share - Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income	$ 1,324	$ 86,718
Impact of conversion of dilutive securities	(2,293)	(104,575)
Dilutive Net Loss	$ (969)	$ (17,857)
Net income (loss) per share
Basic	$ 0.00	$ 0.19
Diluted	$ 0.00	$ (0.03)
Basic weighted average shares outstanding	497,473,222	455,942,886
Dilutive potential common stock outstanding
Stock-based awards	2,905,016	8,982,055
Warrants	943,217	5,685,919
Diluted weighted average shares outstanding	540,532,813	605,198,839
Anti-dilutive shares outstanding	47,283,899	35,015,905
Stock-based awards
Dilutive potential common stock outstanding
Anti-dilutive shares outstanding	16,484,020	9,877,143
2023 Notes
Dilutive potential common stock outstanding
Convertible Notes		4,617,646
2025 Notes
Dilutive potential common stock outstanding
Convertible Notes	39,211,358	39,689,142
PHC Notes
Dilutive potential common stock outstanding
Convertible Notes		65,151,893
PHC Option
Dilutive potential common stock outstanding
Anti-dilutive shares outstanding		24,959,156
Energy Capital Option
Dilutive potential common stock outstanding
Convertible Notes		25,129,298
Anti-dilutive shares outstanding	30,372,058
Warrants
Dilutive potential common stock outstanding
Anti-dilutive shares outstanding	427,821	179,606
Number of shares called by warrants	83,951,061

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Marketable Securities - AFS Debt Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Marketable securities available for sale, consisting of debt securities:
Amortized Cost	$ 91,736	$ 121,153
Gross Unrealized Losses	(220)	(678)
Estimated Market Value	91,516	120,475
Commercial paper
Marketable securities available for sale, consisting of debt securities:
Amortized Cost	45,830	41,503
Estimated Market Value	45,830	41,503
Corporate debt securities
Marketable securities available for sale, consisting of debt securities:
Amortized Cost	13,327	32,331
Gross Unrealized Losses	(29)	(189)
Estimated Market Value	13,298	32,142
Asset backed Securities
Marketable securities available for sale, consisting of debt securities:
Amortized Cost	8,223	8,363
Gross Unrealized Losses	(66)	(103)
Estimated Market Value	8,157	8,260
Government and agency securities
Marketable securities available for sale, consisting of debt securities:
Amortized Cost	24,356	38,956
Gross Unrealized Losses	(125)	(386)
Estimated Market Value	$ 24,231	$ 38,570

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Marketable Securities - AFS Debt Securities - Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Net Carrying Amount
2023 (remaining nine months)	$ 76,629
2024	8,364
2025	6,743
Total	91,736	$ 121,153
Fair Value
2023 (remaining nine months)	76,471
2024	8,361
2025	6,684
Total	$ 91,516

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Inventory, net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Finished goods	$ 2,595		$ 1,697
Work-in-process	4,074		4,057
Raw materials	1,526		1,552
Total	8,195		$ 7,306
Inventory adjustments included in cost of sales
Provision for inventory obsolescence and net realizable value	(15)
Inventory Valuation and Obsolescence
Inventory adjustments included in cost of sales
Cost of sales	$ 100	$ 100

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Prepaid Expenses and Other Current Assets, and Deposits and other assets (Details) $ in Thousands	Mar. 31, 2023 USD ($) ft²	Dec. 31, 2022 USD ($)	Jun. 30, 2022
Prepaid Expenses and Other Current Assets, and Deposits and other assets
Contract manufacturing	$ 3,868	$ 4,097
Insurance	983	1,243
Clinical and Preclinical	695	924
Research and development	251	67
IT and software	133	189
Interest receivable	130	336
Sales and Marketing	113	158
Rent and utilities	106	132
Other	14	12
Accounting and Audit		270
Total prepaid expenses and other current assets	6,293	7,428
Operating lease ROU assets	$ 2,900
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Deposits and other assets
Deposits and other assets	$ 2,998	$ 3,108
Right of use asset, building	$ 2,900
Leased space, in square feet | ft²	33,000
Renewal term of lease			5 years

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Accrued Expenses, Other Current Liabilities, and Other Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022
Accrued Expenses, Other Current Liabilities, and Other Liabilities
Research and development	$ 4,926	$ 3,502
Contract manufacturing	2,643	2,480
Professional and administration services	2,162	1,053
Compensation and benefits	1,521	4,699
Product warranty and replacement obligations	772	781
Operating lease	$ 661	$ 725
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued Liabilities and Other Liabilities, Current	Accrued Liabilities and Other Liabilities, Current
Interest on notes payable	$ 560	$ 2,050
Sales and marketing services	315	149
Other	71	14
Total accrued expenses and other current liabilities	13,631	15,453
Non-current operating lease liabilities	$ 2,600	$ 2,700
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent	Other Liabilities, Noncurrent
Renewal term of lease			5 years

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Product Warranty Obligations (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Product Warranty Obligations
Warranty term	1 year
Warranty reserve	$ 772	$ 781
Reconciliation of the change in estimated warranty liabilities
Balance at beginning of the period	781	723
Provision for warranties during the period (reversals from prior period)		166
Settlements made during the period	(9)	(108)
Balance at end of the period	$ 772	$ 781

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Notes Payable, Preferred Stock and Stock Purchase Warrants (Details)											3 Months Ended		12 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares	Mar. 13, 2023 USD ($) $ / shares shares	Jan. 31, 2023 USD ($)	Nov. 07, 2022 USD ($)	Jan. 01, 2022 USD ($) shares	Jan. 21, 2021 USD ($) $ / shares shares	Nov. 09, 2020 USD ($) $ / shares	Aug. 09, 2020 USD ($) $ / shares shares	Apr. 24, 2020 USD ($) $ / shares shares	Apr. 22, 2020 USD ($)	Mar. 31, 2023 USD ($) $ / shares shares	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($) $ / shares	Apr. 30, 2022	Feb. 28, 2022 shares	Dec. 31, 2021 USD ($)	May 09, 2021 $ / shares shares	Mar. 31, 2018 USD ($)
Notes payable
Derivative liabilities	$ 2,081,000										$ 2,081,000		$ 52,050,000
Common stock, par value per share (in dollars per share) | $ / shares	$ 0.001										$ 0.001		$ 0.001
Proceeds from Issuance of Warrants		$ 15,000,000.0									$ 14,958,000
Gain on fair value adjustment of option												$ 21,701,000
Carrying Amount	$ 37,479,000										37,479,000		$ 56,383,000
Exchange Agreement with Highbridge
Debt Instrument [Line Items]
Warrants to purchase shares | shares									4,500,000
Exercise price of warrant (in dollars per share) | $ / shares									$ 0.66
Notes payable
Shares issued | shares									11,026,086
Accrued and unpaid interest									$ 300,000
2023 Notes.
Debt Instrument [Line Items]
Gain (Loss) on extinguishment of debt			$ 20,000.00
Notes payable
Derivative liabilities																		$ 17,300,000
2025 Notes.
Notes payable
Fair value of the embedded conversion option	2,100,000										2,100,000		7,900,000
2025 Notes. | Exchange Agreement with Highbridge
Notes payable
Principal amount									24,000,000.0
Deferred issuance costs and debt discounts									13,200,000
PHC Notes
Debt Instrument [Line Items]
Gain (Loss) on extinguishment of debt	48,600,000												100,000
Notes payable
Principal amount	35,000,000.0							$ 35,000,000.0			35,000,000.0		35,000,000
Interest rate (as a percent)								9.50%						8.00%
Debt issuance costs and discounts								$ 1,400,000
Fair value of the embedded conversion option	0							$ 25,800,000			0
Original debt conversion amount											0
Financing fee shares issued | shares								2,941,176
Common stock, par value per share (in dollars per share) | $ / shares								$ 0.001
Debt discount of financing fee shares								$ 1,500,000
Conversion rate								1,867.4136
Conversion price | $ / shares								$ 0.54
Conversion of Stock, Amount Issued								$ 15,000,000.0
Issuance costs incurred								2,900,000					837,000
Amount of principal which is converted to shares								$ 1,000
Interest Payable	23,200,000										23,200,000
Carrying Amount	25,400,000										$ 25,400,000		$ 20,465,000
Net gain on exchange of debt instrument	18,800,000
PHC Notes | Other income
Notes payable
Change in fair value of embedded derivative	$ 44,200,000
PHC Notes | Debt Redemption on or After October 31, 2022
Notes payable
Threshold percentage of stock trigger								275.00%
Notice period								10 days
PHC Notes | Debt Redemption on or After October 31, 2023
Notes payable
Notice period								10 days
PHC Notes | Debt Redemption Six Months Prior to Maturity Date
Notes payable
Call premium percentage								130.00%
PHC Notes | Debt Redemption Within Six Months of Maturity Date
Notes payable
Call premium percentage								125.00%
PPP Loan
Notes payable
Amount received from loan funding										$ 5,800,000
Interest rate (as a percent)										1.00%
Note term										2 years
PPP Loan | Silicon Valley Bank
Notes payable
Principal amount										$ 5,800,000
Second Lien Notes | Exchange Agreement with Highbridge
Notes payable
Principal amount									$ 15,700,000
Energy Capital Facility
Debt Instrument [Line Items]
Net exercise of warrants | shares															8,917,535
Exercise price of warrant (in dollars per share) | $ / shares																	$ 0.3951
Notes payable
Deferred issuance costs and debt discounts																$ 7,600,000
Period to purchase stock							24 months
Derivative liabilities							$ 4,200,000									$ 69,400,000
Adjusted of option to fair value							25,700,000
Gain on fair value adjustment of option							43,700,000
Energy Capital Facility | Maximum
Debt Instrument [Line Items]
Warrants to purchase shares | shares																	10,000,000
Notes payable
Share price for debt conversion | $ / shares						$ 0.25
Cash Cash Equivalents and Other Available Credit Threshold						$ 8,000,000
Purchase Warrant
Debt Instrument [Line Items]
Exercise price of warrant (in dollars per share) | $ / shares		$ 0.001
Purchase Warrant | PHC
Debt Instrument [Line Items]
Warrants to purchase shares | shares		15,425,750
Exercise price of warrant (in dollars per share) | $ / shares		$ 0.001
Notes payable
Aggregate gross proceeds		$ 15,000,000.0
Warrants fair value | shares		14,300,000
Additional paid-in-capital		$ 700,000
Exchange Warrant
Debt Instrument [Line Items]
Warrants to purchase shares | shares		68,525,311
Exercise price of warrant (in dollars per share) | $ / shares		$ 0.001
Notes payable
Warrants fair value | shares	48,600,000										48,600,000
Interest payments		$ 675,000
Exchange Warrant | PHC Notes
Notes payable
Original debt conversion amount		$ 35,000,000.0
Series B Preferred Stock
Notes payable
Number of shares sold pursuant to regular purchases | shares					0
Maximum amount of shares that can be purchased under the equity line agreement at purchase price					$ 12,000,000.0
Aggregate principal amount of convertible preferred equity				$ 12,000,000.0
Series B Preferred Stock | Energy Capital Facility
Notes payable
Preferred stock value							$ 12,000,000.0
Share price for debt conversion | $ / shares						$ 1,000
Number of shares sold pursuant to regular purchases | shares						0
Maximum amount of shares that can be purchased under the equity line agreement at purchase price						$ 12,000,000.0
Period to purchase stock						6 months
Daily limit						$ 4,000,000.0
Conversion price | $ / shares							$ 0.3951

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Notes Payable, Preferred Stock and Stock Purchase Warrants - Term Notes Payable (Details)	1 Months Ended		3 Months Ended
	Jan. 31, 2021 USD ($) shares	Jul. 31, 2019 USD ($) $ / shares	Mar. 31, 2023 USD ($)	Mar. 31, 2018 USD ($) $ / shares	Dec. 31, 2022 USD ($)
Long term debt
Derivative liabilities			$ 2,081,000		$ 52,050,000
2023 Notes.
Long term debt
Derivative liabilities				$ 17,300,000
2023 Notes
Long term debt
Principal amount			51,199,000	$ 53,000,000.0	15,700,000
Conversion rate (per $1,000 of principal)				294.1176
Conversion price (in dollars per share) | $ / shares				$ 3.40
Repurchase price as a percent of principal amount				100.00%
Transaction costs				$ 2,200,000
Amortization percent				9.30%
Repurchase amount				$ 37,000,000.0
Amount of principal which is converted to shares				$ 1,000
Issuance costs incurred			226,000
2025 Notes
Long term debt
Principal amount		$ 82,000,000.0			51,199,000
Conversion rate (per $1,000 of principal)		757.5758
Conversion price (in dollars per share) | $ / shares		$ 1.32
Amount of principal which is converted to shares		$ 1,000
Original debt conversion amount	$ 6,500,000		$ 0
Debt converted, Shares issued | shares	4,924,998
Issuance costs incurred					$ 252,000

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Notes Payable, Preferred Stock and Stock Purchase Warrants - Carrying amount of notes payable (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Aug. 09, 2020	Jul. 31, 2019	Mar. 31, 2018
Debt Instrument [Line Items]
Carrying Amount	$ 37,479	$ 56,383
2023 Notes
Debt Instrument [Line Items]
Principal	51,199	15,700			$ 53,000
Debt Discount	(13,494)	(121)
Issuance Costs	(226)
Carrying Amount	37,479	15,579
2025 Notes
Debt Instrument [Line Items]
Principal		51,199		$ 82,000
Debt Discount		(15,029)
Issuance Costs		(252)
Carrying Amount		35,918
PHC Notes
Debt Instrument [Line Items]
Principal	35,000	35,000	$ 35,000
Debt Discount		(13,698)
Issuance Costs		(837)	$ (2,900)
Carrying Amount	$ 25,400	$ 20,465

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Notes Payable, Preferred Stock and Stock Purchase Warrants - Interest expense (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Jan. 31, 2021	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Long term debt
Interest			$ 1,441	$ 1,700
Debt Discount and Fees			3,097	2,683
Issuance Costs			114	87
Total Interest Expense			$ 4,652	$ 4,470
2023 Notes
Long term debt
Interest Rate	5.25%		5.25%	5.25%
Interest			$ 69	$ 206
Debt Discount and Fees			120	333
Total Interest Expense			$ 189	$ 539
2025 Notes
Long term debt
Interest Rate	5.25%		5.25%	5.25%
Interest			$ 672	$ 658
Debt Discount and Fees			1,535	1,274
Issuance Costs			26	21
Loss on Extinguishment		$ 3,200
Total Interest Expense			$ 2,233	$ 1,953
PHC Notes
Long term debt
Interest Rate	8.00%		8.00%	9.50%
Interest			$ 700	$ 831
Debt Discount and Fees			1,442	1,076
Issuance Costs			88	66
Loss on Extinguishment	$ (48,600)				$ (100)
Total Interest Expense			$ 2,230	$ 1,973
PPP Loan
Long term debt
Interest Rate				1.00%
Interest				$ 5
Total Interest Expense				$ 5

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Notes Payable, Preferred Stock and Stock Purchase Warrants - Scheduled Maturities (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Scheduled maturities
2024	$ 51,199
Total	$ 51,199

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Stockholders' Equity (Deficit) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Nov. 30, 2021	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Class of Stock [Line Items]
Proceeds from offering			$ 8,004
Open Market Sale Agreement
Class of Stock [Line Items]
Proceeds from issuance of common stock, net		$ 34,400		$ 34,400
Shares issued		15,160,899		15,160,899
Open Market Sale Agreement | Maximum
Class of Stock [Line Items]
Proceeds from offering	$ 150,000
Percentage of commission on proceeds from common stock	3.00%
2021 Sales Agreement
Class of Stock [Line Items]
Shares issued		0

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Stock-Based Compensation (Details)		1 Months Ended		3 Months Ended
	Feb. 01, 2023 shares	Feb. 29, 2016 shares	Dec. 31, 2015	Mar. 31, 2023 item shares	Jan. 30, 2023 shares	May 30, 2019 shares
2015 Equity Incentive Plan
Stock-based compensation
Expiration period			10 years
Automatic annual increase in shares authorized, percent of common stock outstanding				3.50%
Shares available for grant				39,680,701
Inducement Plan
Stock-based compensation
Shares available for grant				579,056
Total shares that may be issued						1,800,000
Commercial Equity Plan
Stock-based compensation
Total shares that may be issued					10,000,000
Grants made				0
2016 Employee Stock Purchase Plan
Stock-based compensation
Automatic annual increase in shares authorized, percent of common stock outstanding		1.00%
Total shares that may be issued		800,000		17,760,078
Payroll deductions for ESPP participants (as a percent)				15.00%
Percentage on share price issued				85.00%
Offering period duration				6 months
Purchase periods | item				2
Stock issued	566,573			86,816
1997 Stock Option Plan
Stock-based compensation
Options vested and expected to vest				1,223,273

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Fair Value Measurements - Recurring (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Nov. 09, 2020
Fair Value Measurements
Cash and cash equivalents	$ 45,085	$ 35,793
Marketable securities	91,516	120,475
Derivative liabilities	$ 2,081	52,050
2025 Notes
Reconciliation of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3)
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Nonoperating Income (Expense)
Energy Capital Facility
Fair Value Measurements
Derivative liabilities			$ 69,400	$ 4,200
Recurring | Embedded conversion option | 2023 Notes
Fair Value Measurements
Derivative liabilities		20
Recurring | Embedded conversion option | PHC Notes
Fair Value Measurements
Derivative liabilities		44,191
Recurring | Embedded conversion option | 2025 Notes
Fair Value Measurements
Derivative liabilities	$ 2,081	7,859
Recurring | Money market funds
Fair Value Measurements
Cash and cash equivalents	39,197	34,658
Recurring | Corporate debt securities
Fair Value Measurements
Marketable securities	13,298	41,503
Recurring | Commercial paper
Fair Value Measurements
Marketable securities	45,830	32,142
Recurring | Asset backed Securities
Fair Value Measurements
Marketable securities	8,157	8,260
Recurring | Government and agency securities
Fair Value Measurements
Marketable securities	24,231	38,570
Recurring | Level 1 | Money market funds
Fair Value Measurements
Cash and cash equivalents	39,197	34,658
Recurring | Level 1 | Government and agency securities
Fair Value Measurements
Marketable securities	19,750	31,627
Recurring | Level 2 | Embedded conversion option | 2023 Notes
Fair Value Measurements
Derivative liabilities		20
Recurring | Level 2 | Corporate debt securities
Fair Value Measurements
Marketable securities	13,298	41,503
Recurring | Level 2 | Commercial paper
Fair Value Measurements
Marketable securities	45,830	32,142
Recurring | Level 2 | Asset backed Securities
Fair Value Measurements
Marketable securities	8,157	8,260
Recurring | Level 2 | Government and agency securities
Fair Value Measurements
Marketable securities	4,481	6,943
Recurring | Level 3
Reconciliation of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3)
Balance at the beginning of the period	52,050
Balance at the end of the period	2,081
Recurring | Level 3 | PHC Notes
Reconciliation of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3)
(Gain) Loss on change in fair value of derivatives	(44,191)
Recurring | Level 3 | 2025 Notes
Reconciliation of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3)
(Gain) Loss on change in fair value of derivatives	(5,778)
Recurring | Level 3 | Embedded conversion option | PHC Notes
Fair Value Measurements
Derivative liabilities		44,191
Recurring | Level 3 | Embedded conversion option | 2025 Notes
Fair Value Measurements
Derivative liabilities	$ 2,081	$ 7,859

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Fair Value Measurements - Valuation Assumptions (Details) - 2025 Notes - Recurring - Level 3	Mar. 31, 2023
Stock price volatility | Minimum
Fair value valuation assumptions
Embedded Derivative Liability, Measurement Input	0.400
Stock price volatility | Maximum
Fair value valuation assumptions
Embedded Derivative Liability, Measurement Input	0.500
Probabilities of conversion provisions | Minimum
Fair value valuation assumptions
Embedded Derivative Liability, Measurement Input	0.050
Probabilities of conversion provisions | Maximum
Fair value valuation assumptions
Embedded Derivative Liability, Measurement Input	0.950
Credit spread
Fair value valuation assumptions
Embedded Derivative Liability, Measurement Input	0.1324
Recovery rate
Fair value valuation assumptions
Embedded Derivative Liability, Measurement Input	(0.0126)

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Income Taxes - Tax Provision (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Taxes
Income tax provision	$ 0	$ 0

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Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Related party transactions
Revenue	$ 3,824	$ 2,189
Due from related party	2,953		$ 2,324
Due to related party	823		837
Ascensia
Related party transactions
Revenue	3,800	$ 2,200
Due from related party	2,900		2,300
Due to related party	$ 800		$ 900

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Subsequent Events (Details) - USD ($) $ in Millions	Nov. 07, 2022	Jun. 30, 2022
Subsequent Event [Line Items]
Lease		5 years
Series B Preferred Stock
Subsequent Event [Line Items]
Aggregate principal amount of convertible preferred equity	$ 12.0
Energy Capital, LLC | Series B Preferred Stock
Subsequent Event [Line Items]
Aggregate principal amount of convertible preferred equity	$ 12.0