Senseonics Holdings, Inc.

Current report

Our Commercialization Agreement with Ascensia to market Eversense may not be successful.

Current report

We have a Commercialization Agreement with Ascensia, pursuant to which we have granted Ascensia the exclusive right to distribute Eversense worldwide, subject to certain exceptions. Pursuant to this agreement, Ascensia has been responsible for the substantial majority of our historical revenue and our success is dependent on Ascensia effectively marketing and selling Eversense. Prior to our Commercialization Agreement with Ascensia, Ascensia had limited experience with marketing durable medical equipment and no experience marketing CGM systems. In order to strengthen commercial execution, in 2024, Ascensia established an independent dedicated business unit responsible for commercializing Eversense, which reports directly to Ascensia’s parent company, PHC Holdings Corporation (“PHC”), and Ascensia engaged a new president of CGM to lead that business unit.

Current report

In an effort to accelerate Ascensia’s commercialization efforts, we have taken steps to address challenges to Eversense adoption by establishing Eon Care, which maintains a network of nurses to perform insertions. We have also sought to complement Ascensia’s commercialization efforts by establishing a consignment program, whereby we sell the Eversense system and related components and supplies through a network of healthcare professionals, and supporting certain commercial programs such as direct to consumer (DTC) spending, certain key account activities, and market access support. Although the rate of Eversense adoption has increased following these initiatives, as well as the regulatory approval of Eversense 365, we continue to work closely with Ascensia to accelerate commercialization and further adoption of our product.

Current report

The Commercialization Agreement is terminable by either party if the other party materially breaches its obligations under the agreement; provided, however, that if Ascensia is unable to achieve the specified minimum spending or revenue targets outlined in the agreement, we will only have the right to convert Ascensia’s exclusive rights to nonexclusive rights. We regularly engage in discussions with Ascensia regarding the market opportunity for Eversense, the degree of spending on commercialization, and the potential impact of greater commercial support on product uptake. We also assess ways in which we can modify our plans and expand or introduce new commercial activities to accelerate commercialization and product adoption. As of the date of this report, we are assessing spending against targets for Ascensia’s fiscal year ended March 31, 2025, collaborating to determine what adjustments may be required in commercial support to better pursue the potential of Eversense, and considering any constraints to such support. If we and/or Ascensia were to elect to modify our Commercialization Agreement or other commercial arrangements, such changes could subject us to additional risks or uncertainties associated with product commercialization.

Current report

The agreement is terminable by Ascensia under a number of circumstances, including if we undergo a change of control. The agreement is also terminable by either party if the other party undergoes bankruptcy, dissolution or winding up.

Current report

We cannot guarantee this agreement with Ascensia will be successful, that it will continue, or that we will be able to achieve or maintain any particular volume of sales under the agreement or increase the volume of sales at a satisfactory pace or at all from this relationship in the future.

Current report

We have limited operating history as a commercial-stage company and may face difficulties encountered by companies early in their commercialization in competitive and rapidly evolving markets.

Current report

Our experience as a commercial-stage company upon which to evaluate our business, future sales expectations and operating results is limited. In assessing our business prospects, you should consider the various risks and difficulties frequently encountered by companies early in their commercialization in competitive and rapidly evolving markets, particularly companies that develop and sell medical devices. These risks include our ability to:

Current report

Due to our limited operating history as a commercial-stage company, we may not have the institutional knowledge or experience to be able to effectively address these and other risks that may face our business. In addition, we may not be able to develop insights into trends that could emerge and negatively affect our business and may fail to respond effectively to those trends. Additionally, if our collaboration with Ascensia were to be modified, we could seek to take a greater role in the commercialization of Eversense, which would subject us to additional risks and uncertainties associated with those activities. As a result of these or other risks, we may not be able to execute key components of our business strategy, and our business, financial condition and operating results may suffer.

Current report

If we are unable to successfully expand our commercialization of Eversense in the United States and Europe through our Commercialization Agreement with Ascensia, our business will be harmed.

Current report

We have limited commercialization experience in both the United States and Europe. We have invested substantially all of our efforts and financial resources to the development and commercialization of Eversense. Our ability to generate revenue from our products will depend heavily on successful commercialization of products in the United States and Europe, which is entirely dependent on our collaboration with Ascensia, and on continuing development of future generations of our Eversense system. The success of any products that we develop will depend on several factors, including:

Current report

Our revenue is dependent, in part, upon the size of the markets in the territories for which we have regulatory approval or certification, the accepted price for the product, the ability to obtain coverage and reimbursement, and whether we own the commercial rights for that territory. If the number of people with diabetes we target is not as

Current report

significant as we estimate or the treatment population is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products.

Current report

Our revenue is dependent on the success of Ascensia in commercializing our product and its future versions. Our product is a new product for Ascensia globally and they must continue to establish certain functions of their U.S. commercial organization to successfully market and sell our CGM system. Ascensia’s continued organizational development of its sales and marketing capabilities will be critical to successful commercialization of our Eversense systems. If Ascensia is unable to maintain effective sales, marketing and other functions that are required to support the product, or achieve the increased levels of commercial support needed to support product expansion, it will have a materially negative impact on our net revenues from Eversense. As of the date of this report, we are assessing spending against targets for Ascensia’s fiscal year ended March 31, 2025, collaborating to determine what adjustments may be required in commercial support to better pursue the potential of Eversense, and considering any constraints to such support. If we and/or Ascensia were to elect to modify our Commercialization Agreement or other commercial arrangements, such changes could subject us to additional risks or uncertainties associated with product commercialization.

Current report

Approval in the United States by the FDA or approval, or certification by a regulatory agency or Notified Body in another country does not guarantee approval, or certification by the regulatory authorities or Notified Bodies in other countries or jurisdictions or ensure approval, or certification for the same conditions of use. In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Approval or certification processes vary among countries and can involve additional product testing and validation and additional administrative review periods. If we do not achieve one or more of these approvals, or certifications in a timely manner or at all, we could experience significant delays or an inability to fully commercialize Eversense and achieve profitability.

Current report

Both before and after a product is commercially released, we will have ongoing responsibilities under U.S. and EU regulations. We will also be subject to periodic inspections by the FDA, the Notified Bodies in the EEA and comparable foreign authorities to determine compliance with regulatory requirements, such as the QSR, of the FDA, medical device reporting regulations, vigilance in reporting of adverse events and regulations regarding notification, corrections, and recalls. These inspections can result in observations or reports, warning letters or other similar notices or forms of enforcement action. If the FDA, or any comparable foreign regulatory authority concludes that we are not in compliance with applicable laws or regulations, or that any of our products are ineffective or pose an unreasonable health risk, such authority could ban these products, suspend, vary or cancel our marketing authorizations or CE Certificates of Conformity, impose "stop-sale" and "stop-import" orders, refuse to issue export certificates, detain or seize adulterated or misbranded products, order a recall, repair, replacement, correction or refund of such products, or require us to notify health providers and others that the products present unreasonable risks of substantial harm to the public health. Discovery of previously unknown problems with our product's design or manufacture may result in restrictions on the use of Eversense, restrictions placed on us or our suppliers, or withdrawal or variation of an existing regulatory clearance or CE Certificate of Conformity for Eversense. The FDA, competent authorities of EEA countries and comparable foreign regulatory authorities may also impose operating restrictions, enjoin and restrain certain violations of applicable law pertaining to medical devices, assess civil or criminal penalties against our officers, employees or us, or recommend criminal prosecution of our company. Adverse regulatory action may restrict us from effectively marketing and selling our products. In addition, negative publicity and product liability claims resulting from any adverse regulatory action could have a material adverse effect on our business, financial condition, and operating results.

Current report

Foreign governmental regulations have become increasingly stringent and more extensive, and we may become subject to even more rigorous regulation by foreign governmental authorities in the future. Penalties for a company's noncompliance with foreign governmental regulation could be severe, including revocation or suspension of a company's business license and civil or criminal sanctions. In some jurisdictions, such as Germany, any violation of a law related to medical devices is also considered to be a violation of the unfair competition law. In such cases, governmental authorities, our competitors and business or consumer associations may then file lawsuits to prohibit us from commercializing Eversense in such jurisdictions. Our competitors may also sue us for damages. Any domestic or foreign governmental law or regulation imposed in the future may have a material adverse effect on our business, financial condition and operating results.

Current report

Our collaboration agreement with Sequel Med Tech may not lead to the benefits that we anticipate.

Current report

In April 2025, we entered into a collaboration agreement with Sequel Med Tech (the “Sequel Collaboration”), for the purpose of integrating the companies’ technologies to jointly create the first ever automated insulin delivery system with a once-yearly CGM. The development program seeks to integrate Eversense 365 and Sequel’s twiist™ automated insulin delivery system to enable improved outcomes for people living with diabetes. We currently expect the integration of the companies’ products to be available to consumers in the third quarter of 2025. The Sequel Collaboration subjects us to additional risks in our business operations, including but not limited to:

Current report

In addition, there is no guarantee that the Sequel Collaboration will result in the financial and economic benefits we anticipate. Any of the risks listed above and other risks may cause a delay in the technology integration under the Sequel Collaboration or even prevent us from completing the project altogether. If the Sequel Collaboration is not successful or if we are unable to generate sufficient revenue as a result of the Sequel Collaboration, it could adversely affect our business and results of operations, and may damage our reputation.

Current report

We operate in a global economy, and our business depends on a global supply chain for the development, manufacturing, and distribution of our products, and for the advancement of the development programs for our future generation products. There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty.

Current report

We do not own or operate any manufacturing facilities. We currently rely, and expect to continue to rely, on third parties for the manufacture of our products as well as the future generations of our products under development. Currently, several of our suppliers are located outside of the United States. Tariff policies, particularly those affecting countries where our suppliers are located and medical devices generally, could materially increase our costs and reduce our profitability, including as a result of our inability to adjust pricing for our products. Although these tariff policies have not, to date, had a material effect on our production costs, recent and potential future changes in international trade policies, and medical device-specific tariffs, could present material risks to our operations and financial performance.

Current report

Recent policy discussions have included potential targeted tariffs or other trade measures specifically aimed at medical technologies as part of broader healthcare cost control or national security initiatives. Unlike consumer goods, medical devices are subject to unique regulatory constraints that make rapid supply chain adjustments particularly difficult and costly. Should additional tariffs be imposed specifically targeting medical device components, our production costs could rise significantly, and it may be difficult and costly to qualify alternative sources within another country with a lower tariff rate or within the United States, as developing and qualifying alternative sources typically requires at least several months and substantial investment and regulatory approvals. Moreover, the dynamic and unpredictable tariff and trade landscape creates substantial uncertainty and significant planning challenges for our

Current report

operations. Changes in tariff classifications, country-of-origin requirements, or customs procedures can occur with limited notice. This uncertainty complicates our long-term investment decisions regarding manufacturing facilities, supply chain optimization, and research and development activities.

Current report

Unlike many industries, our ability to pass increased costs to customers is limited by the nature of medical device pricing and reimbursement systems. Many of our products are distributed pursuant to pricing established through annual or multi-year contracts with commercial, third-party payors, and reimbursement methodologies established by government programs, such as Medicare. These arrangements typically include fixed pricing terms that were negotiated prior to the implementation of the recently announced tariffs. As a result, and depending on the timing and scope of the implementation of these tariffs, cost increases due to tariffs may be difficult or impossible to pass through to customers until the next negotiation cycle.

Current report

Current or future tariffs will also result in increased research and development expenses, including with respect to increased costs associated with raw materials, laboratory equipment and research materials and components. Trade restrictions affecting the import of materials necessary for the clinical trials of our future generation products could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence and negatively impact our business, results of operations, financial condition and growth prospects.

Current report

Risks Related to our Financial Results and Need for Financing

Current report

We will need to generate significant sales to achieve profitable operations.

Current report

We intend to continue to increase our operating expenses in connection with the commercialization of Eversense with our collaboration partner Ascensia, our ongoing research and development activities including the development of next generation products and the clinical trials for those products, and the commensurate development of our management and administrative functions. We will need to generate significant sales to achieve profitability, and we might not be able to do so. Even if we do generate significant sales, we might not be able to achieve, sustain or increase profitability on a quarterly or annual basis in the future. If our sales grow more slowly than we expect, if we take on additional commercialization responsibilities for Eversense, or if our operating expenses otherwise exceed our expectations, our financial performance and operating results will be adversely affected.

Current report

We are highly dependent on the management, research and development, clinical, financial and business development expertise of Tim Goodnow, our Chief Executive Officer, Rick Sullivan, our Chief Financial Officer, Mukul Jain, our Chief Operating Officer, and Ken Horton, our General Counsel and Corporate Development Advisor, as well as the other members of our scientific and clinical teams. Although we have employment agreements with our executive officers, each of them may terminate their employment with us at any time and will continue to be able to do so. We do not maintain "key person" insurance for any of our executives or employees.

Current report

Recruiting and retaining qualified scientific, clinical and marketing personnel are critical to our success. The loss of the services of our executive officers or other key employees, or the inability to add required staff, could impede the achievement of our research, development and commercialization objectives or the expansion of activities to support Eversense, and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize our products. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous medical device companies for similar personnel, many of which have greater financial and other resources dedicated to attracting and retaining personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.

Current report

Although it will be subject to restrictions on trading, a portion of the equity of our management team will not contain other contractual transfer restrictions. This liquidity may represent material wealth to such individuals and impact retention and focus of existing key members of management.

Current report

We may need to expand our development and regulatory capabilities and our marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

Current report

As of December 31, 2024, we had 117 full-time employees. As our commercialization progresses, we may experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of research, product development, clinical sciences, regulatory affairs, supply chain, logistics, marketing, clinical/insertion services, or additional commercial activities. To manage our future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

Current report

Additionally, we have and may undertake cost reduction plans, which may include reorganization of our workforce. These actions could disrupt the employee base, our ability to attract and retain qualified personnel, or cause other operational and administrative inefficiencies.

Previous report

The medical device industry is characterized by patent litigation, and we could become subject to litigation that could be costly, result in the diversion of management's time and efforts, stop our development and commercialization measures, harm our reputation or require us to pay damages.

Previous report

Our success will depend in part on not infringing the patents or violating the other proprietary rights of third parties. Significant litigation regarding patent rights exists in our industry. Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make and sell our products. The large number of patents, the rapid rate of new patent issuances, and the complexities of the technology involved increase the risk of patent litigation.

Previous report

The medical device industry in general, and the glucose testing sector of this industry in particular, are characterized by the existence of a large number of patents and frequent litigation based on assertions of patent infringement. We are aware of numerous patents issued to third parties that may relate to the technology used in our business, including the design and manufacture of CGM sensors and CGM systems, as well as methods for continuous glucose monitoring. Each of these patents contains multiple claims, any one of which may be independently asserted against us. The owners of these patents may assert that the manufacture, use, sale or offer for sale of our CGM sensors or CGM systems infringes one or more claims of their patents. For example, as noted above, in May 2024, we were served with a complaint by Cellspin Soft, Inc., a non-practicing entity, filed against us in the United States District Court for the Eastern District of Texas, alleging that we infringe certain patents owned by it and seeking unspecified damages. We note that the validity of all three patents-in-suit is currently being challenged in Inter Partes Review proceedings at the U.S. Patent and Trademark Office, where the Patent Trial and Appeal Board instituted a review which the Company has joined. We are further reviewing the allegations, and intend to vigorously defend this matter, however, the outcome of any litigation, such as this, is inherently unpredictable.

Previous report

Furthermore, there may be additional patents issued to third parties of which we are presently unaware that may relate to aspects of our technology that such third parties could assert against us and materially and adversely affect our business. In addition, because patent applications can take many years to issue, there may be patent applications that are currently pending and unknown to us, which may later result in issued patents that third parties could assert against us and harm our business.

Previous report

In preparation for commercializing our Eversense products, we perform ongoing analyses, the purpose of which is to review and assess publicly available information to determine whether third parties hold any valid patent rights that a well-informed court would more likely than not find that we would infringe by commercializing our products, understanding that there are risks and uncertainties associated with any litigation and no predictions or assurances can be made regarding the outcome of any such litigation. Although our review and analysis are not complete and subject to the express limitations in the preceding sentence, we are not aware of any such valid patent rights. Moreover, we have not previously performed an exhaustive review of this type, and we cannot be certain that it will not result in our locating patent rights relating to our products of which we were not previously aware.

Previous report

In the future, we could receive communications from other parties alleging our infringement of their intellectual property rights. Any intellectual property litigation, including the pending litigation described above, could force us to do one or more of the following:

Previous report

Patent litigation can involve complex factual and legal questions, and its outcome is uncertain. Any litigation or claim against us, even those without merit, may cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business, stop our development and commercialization measures and harm our reputation. Further, as the number of participants in the diabetes market increases, the possibility of intellectual property infringement claims against us increases.

Previous report

There is uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt about our ability to continue as a going concern.

Previous report

Our unaudited condensed consolidated financial statements as of September 30, 2024 have been prepared assuming the Company will continue as a going concern for the next twelve months. Our management concluded that our recurring

Previous report

losses from operations, existing unrestricted cash, cash equivalents and marketable securities, anticipated debt repayments, and minimum cash and satisfaction of performance milestones to comply with debt covenants under its Loan and Security Agreement raise substantial doubt about our ability to continue as a going concern for the next twelve months after issuance of our financial statements included in this Quarterly Report on Form 10-Q. As of September 30, 2024, we had unrestricted cash, cash equivalents and marketable securities of $74.5 million consisting of cash and investments in highly liquid U.S. money market funds. Subsequent to September 30, 2024, we raised additional proceeds of approximately $15.0 million before expenses incurred by the Company in a registered direct offering of the Company’s common stock and concurrent private placement of warrants to purchase shares of the Company’s common stock. We do not expect our existing cash and cash equivalents will be sufficient to fund our operations through the next twelve months and we will need to seek additional capital to fund our operations, working capital needs, capital expenditures and other strategic initiatives beyond that time. Although management has been successful in raising capital in the past, there can be no assurance that we will be successful or that any needed financing will be available in the future at terms acceptable to us. As such, we cannot conclude that such plans will be effectively implemented within one year after the date that the financial statements included in this Quarterly Report on Form 10-Q and there is uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt about our ability to continue as a going concern.