GERMANTOWN, Md. – Senseonics Holdings (NYSE:SENS), Inc. (NYSE American: SENS), a medical technology company specializing in the development and manufacturing of implantable continuous glucose monitoring (CGM) systems for diabetes management, has declared a definitive agreement for a registered direct offering and concurrent private placement. The transaction involves the sale of 45,714,286 shares of common stock at $0.35 per share, alongside warrants to purchase an equivalent number of shares, also at $0.35 per share.
These warrants will be exercisable six months post-issuance and are set to expire five years from the initial exercise date. The expected closing date of the offering is on or about October 28, 2024, contingent on customary closing conditions.
H.C. Wainwright & Co. is serving as the exclusive placement agent for this offering. Senseonics anticipates gross proceeds of approximately $16 million, before fees and other expenses. If the warrants are fully exercised for cash, the company could potentially garner an additional $16 million, though there is no guarantee this will occur.
The net proceeds from this offering are intended for general corporate purposes, working capital needs, and possibly to repay borrowings on its outstanding 5.25% Convertible Senior Notes due in 2025.
The shares are being offered pursuant to a shelf registration statement on Form S-3, filed with the Securities and Exchange Commission (SEC) on August 10, 2023, and effective as of September 12, 2023. The final prospectus supplement and accompanying base prospectus will be available on the SEC's website.
The warrants, on the other hand, are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933 and/or Rule 506(b) of Regulation D, and have not been registered under the Securities Act or state securities laws. Therefore, they may not be resold in the United States without registration or an applicable exemption.
This press release does not constitute an offer to sell these securities, nor a solicitation of an offer to buy them, in any jurisdiction where such offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of any such state or jurisdiction.
Senseonics' Eversense® E3 CGM system is an integral part of its product lineup, featuring a small sensor inserted under the skin that communicates with a smart transmitter, sending glucose data to a mobile app every five minutes.
The information for this article is based on a press release statement from Senseonics Holdings, Inc.
In other recent news, Senseonics Holdings, a medical technology company, has made significant strides in diabetes care. The company has collaborated with healthcare provider Mercy to launch the Eversense 365 Continuous Glucose Monitoring (CGM) system, the only system of its kind offering year-long glucose monitoring for adults with Type 1 and Type 2 diabetes. This technology, approved by the U.S. Food and Drug Administration, aims to alleviate routine disruptions experienced with traditional CGMs that necessitate frequent sensor replacements.
Senseonics' revenue increased by 18% year-over-year in the second quarter of 2024, totaling $4.9 million, aligning with the FDA's approval of the Eversense 365-day CGM system. Analysts from Stifel maintain a Buy rating on Senseonics, citing this FDA approval and the company's steady full-year financial outlook, with global net revenue expected to be between $22 million and $24 million. BTIG, however, maintains a Neutral rating on the company's shares.
These are recent developments that also include the initiation of in-human clinical testing for the Gemini system, Senseonics' fully implantable, self-powering CGM. The company anticipates a temporary decrease in revenue in the third quarter due to the transition from the 180-day to the 365-day CGM system, but predicts a rise in the fourth quarter following the launch of its Eversense 365-day CGM system.
InvestingPro Insights
Senseonics Holdings' recent move to secure additional funding through a registered direct offering and concurrent private placement aligns with its current financial position and market challenges. According to InvestingPro data, the company's market capitalization stands at $186.59 million, reflecting its relatively small size in the medical technology sector.
InvestingPro Tips reveal that Senseonics is "quickly burning through cash" and "net income is expected to drop this year." These insights provide context for the company's decision to raise approximately $16 million through this offering, with the potential for an additional $16 million if warrants are fully exercised. The funds are crucial for general corporate purposes and potentially repaying outstanding convertible notes.
The company's revenue growth of 30.25% over the last twelve months is a positive sign, indicating market traction for its Eversense® E3 CGM system. However, with an operating income margin of -306.79%, Senseonics is not yet profitable, which is common for growing medical technology firms investing heavily in research and development.
It's worth noting that Senseonics "holds more cash than debt on its balance sheet" and "liquid assets exceed short-term obligations," suggesting a degree of financial stability despite its growth-oriented spending. These factors may provide some reassurance to potential investors considering the new share offering.
For readers interested in a deeper financial analysis, InvestingPro offers 8 additional tips for Senseonics Holdings, providing a more comprehensive view of the company's financial health and market position.
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