What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2020-07-28 compared with 2020-04-28 · 85 added, 73 removed, 1117 unchanged (12% of the section changed)

26 unchanged sentences

Additionally, as a result of the impact of the COVID-19 pandemic, some customers have and others may lose access to their private health insurance plan if they lose their job.

Any prolonged economic downturn or recession as a result of the COVID-19 pandemic could result in layoffs of employees and a significant increase in unemployment in the United States and elsewhere, which may continue even after the COVID-19 pandemic is contained.

An impact to job status may extend for a prolonged period of time, beyond possible coverage periods through COBRA, or where the cost to maintain coverage may not be affordable to our customer.

As most of our customers rely on third-party payors, including government programs and private health insurance plans, to cover the cost of our products, our customers may lose coverage to our products, which may harm our business and results of operations.

16 unchanged sentences

We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole.

However, these effects could have a material impact on our business, and

we will continue to monitor the situation closely.

However, these effects could have a material impact on our business, and we will continue to monitor the situation closely.

If our manufacturing capabilities are insufficient to produce an adequate supply of product at appropriate quality levels, our growth could be limited and our business could be harmed.

28 unchanged sentences

We take precautions to safeguard our facilities, which include manufacturing protocols, insurance, health and safety protocols, and off-site storage of data.

substantial delays in our operations, damage, destroy or limit our manufacturing equipment, inventory, or records and cause us to incur additional expenses.

However, a natural or man-made disaster, such as fire, flood, earthquake, act of terrorism, cyber-attack or other disruptive event, such as the COVID-19 pandemic or another public health emergency, could cause substantial delays in our operations, damage, destroy or limit our manufacturing equipment, inventory, or records and cause us to incur additional expenses.

Earthquakes are of particular significance since our primary manufacturing facilities in California are located in an earthquake-prone area.

27 unchanged sentences

we may have difficulty locating and qualifying alternative suppliers for our single-source supplies;

switching components may require product redesign and submission to the FDA of new applications such as a PMA or 510(k) supplement or possibly a separate PMA or 510(k), either of which could significantly delay production;

switching components may require product redesign and submission to the FDA of new applications such as a PMA

or 510(k) supplement or possibly a separate PMA or 510(k), either of which could significantly delay production;

our suppliers manufacture products for a range of customers, and fluctuations in demand for the products these suppliers manufacture for others may affect their ability to deliver components to us in a timely manner;

15 unchanged sentences

We expect that the continuing cost reduction and containment measures may reduce the cost or utilization of health care products and could lead to patients being unable to obtain approval for coverage or payment from these third-party payors.

Additionally, as a result of COVID-19, there may be additional efforts by the government and private sector to reduce health care costs are being made by third-party payors and some customers may lose access to their private health insurance plan if they lose their job.

Additionally, as a result of COVID-19, some customers have and others may lose access to their private health insurance plan if they lose their job, and an impact to job status may extend for a prolonged period of time, beyond possible coverage periods through COBRA, or where the cost to maintain coverage may not be affordable to our customer.

We have experienced, and anticipate that we will continue to experience, downward pressure on product pricing.

To the extent these cost containment efforts are not offset by greater patient access to our products, our future revenue may be reduced

and our business may be harmed.

To the extent these cost containment efforts are not offset by greater patient access to our products, our future revenue may be reduced and our business may be harmed.

If we experience decreasing prices for our products and we are unable to reduce our expenses, including the per unit cost of producing our products, there may be a material adverse effect on our business, results of operations, financial condition and cash flows.

1 unchanged sentence

If the prices for our products and services decrease and we are unable to reduce our expenses, including the cost of sourcing materials, logistics and the cost to manufacture our products, our business, results of operations, financial condition and cash flows will be adversely affected.

The global COVID-19 pandemic may result in increased costs for manufacturing and outsourced services while also causing additional pressure to reduce the prices for our products if a recession or depression occurs and people are unable to afford our products.

occurs and people are unable to afford our products.

We cannot predict the ultimate impact that the COVID-19 pandemic and its effects could have on our business operations, financial condition and cash flows.

We have incurred significant losses in the past and may incur losses in the future.

We have incurred significant operating losses in the past, including an operating loss of $14.4 million for the three months ended March 31, 2019 .

As of March 31, 2020 , we had an accumulated deficit of $675.8 million .

We have incurred significant operating losses in the past.

As of June 30, 2020 , we had an accumulated deficit of $629.5 million .

We have financed our operations primarily through private and public offerings of equity securities and debt and the sales of our products.

33 unchanged sentences

We have entered into distribution arrangements to leverage established distributors already engaged in the diabetes marketplace.

Our distribution agreements with Byram and affiliates, Cardinal Health and affiliates (including Edgepark Medical Supplies), and AmerisourceBergen, our three most significant distributors, each generated more than 10% of our total revenue during the three months ended March 31, 2020 .

Our distribution agreements with Byram and affiliates, Cardinal Health and affiliates (including Edgepark Medical Supplies), AmerisourceBergen, and McKesson, our four most significant distributors, each generated 10% or more of our total revenue during the six months ended June 30, 2020 .

We cannot guarantee that these relationships will continue or that we will be able to maintain this volume of sales from these relationships in the future.

13 unchanged sentences

In March 2017, CMS Medicare Administrative Contractors under local coverage determinations.

Therefore, Medicare reimbursement for our CGM devices is subject to various coverage conditions and often requires a patient-specific coverage analysis issued interim instructions for individual claim adjudication providing instructions and billing codes for the reimbursement of individual claims for therapeutic CGM reimbursement that apply to our G6 and G5 Mobile systems, and in May 2017, CMS Medicare Administrative Contractors issued a revision to an existing joint Local

Coverage Determination, which establishes the Medicare conditions of coverage for therapeutic CGM, including our G5 Mobile and G6 systems.

Similarly, in September 2016, Germany’s Federal Joint Committee agreed to provide reimbursement for continuous glucose monitoring systems under certain conditions, which we believe are met by our G4 PLATINUM, G5 Mobile and G6 systems.

1 unchanged sentence

If we are unable to successfully address these hurdles, reimbursement of our products may be limited to a smaller subset of people with diabetes covered by Medicare or to those people with diabetes covered by other third-party payors that have adopted policies for CGM devices allowing for coverage of these devices if certain conditions are met.

Adverse coverage or reimbursement decisions relating to our products by CMS, its Medicare Administrative Contractors, other state, federal or international payors, and/or third-party commercial payors could significantly reduce reimbursement, which could have an impact on the acceptance of, and demand for, our products and the prices that our customers are willing to pay for them.

As of March 31, 2020 , the seven largest private third-party payors, in terms of the number of covered lives, have issued coverage policies for the category of CGM devices.

Adverse coverage or reimbursement decisions relating to our products by CMS, its Medicare Administrative Contractors, other state, federal or international payors, and/or third-party commercial

payors could significantly reduce reimbursement, which could have an impact on the acceptance of, and demand for, our products and the prices that our customers are willing to pay for them.

As of June 30, 2020 , the seven largest private third-party payors, in terms of the number of covered lives, have issued coverage policies for the category of CGM devices.

In addition, we have negotiated contracted rates with all seven of those third-party payors for the purchase of our G4 PLATINUM, G5 Mobile and G6 systems by their members.

48 unchanged sentences

The market for glucose monitoring devices is intensely competitive, subject to rapid change and significantly affected by new product introductions and other market activities of industry participants.

In selling the G4 PLATINUM, G5 Mobile and

G6 systems, we compete directly with the Diabetes Care division of Abbott Laboratories;

In selling the G4 PLATINUM, G5 Mobile and G6 systems, we compete directly with the Diabetes Care division of Abbott Laboratories;

Medtronic plc’s Diabetes Group;

7 unchanged sentences

Abbott first received FDA approval for a professional-use version of this system in September 2016 for use in the United States for which readings are only made available to the patient through consultation with their healthcare provider.

Abbott first received FDA approval for the consumer version of this system in September 2017 for use in the United States.

Abbott first received FDA approval for the consumer version of this system in September 2017 for use in the United States, and the FDA cleared

Abbott’s FreeStyle Libre 2 iCGM system for children and adults ages 4 years and older in June 2020.

Medtronic plc’s Diabetes Group markets and sells a standalone glucose monitoring product called Guardian Connect, which launched both internationally and in the United States after receiving FDA approval in 2018.

27 unchanged sentences

Although we believe we have taken and are taking appropriate action aimed at reducing and/or eliminating field failures, we anticipate that we will have other product failures in the future.

Product or component failures, manufacturing nonconformances, design defects, off-label use, or inadequate disclosure of product-related risks or product-related information with respect to our products, if they were to occur, could result in an unsafe condition or injury to, or death of, a patient.

condition or injury to, or death of, a patient.

These problems could lead to recall of, or issuance of a safety alert relating to, our products, and could result in product liability claims and lawsuits.

111 unchanged sentences

We enter into collaborations with third parties that may not result in the development of commercially viable products or the generation of significant future revenues.

In the ordinary course of our business, we enter into collaborative arrangements to develop new products and to pursue new markets, such as our agreements with Eli Lilly, Insulet, Novo Nordisk and Tandem Diabetes, to integrate our CGM technology into their insulin delivery systems, and our amended agreement with Verily to develop one or more next-generation CGM products.

Our Eli Lilly, Insulet, Novo Nordisk and Verily collaborations have not yet resulted in a commercial product.

In the ordinary course of our business, we enter into collaborative arrangements to develop new products and to pursue new markets, such as our agreements with Eli Lilly, Insulet, Novo Nordisk Tandem Diabetes and The Ypsomed Group, to integrate our CGM technology into their insulin delivery systems, and our amended agreement with Verily to develop one or more next-generation CGM products.

Our Eli Lilly, Insulet, Novo Nordisk,Verily and The Ypsomed Group collaborations have not yet resulted in a commercial product.

In December 2019, Tandem received FDA approval for its second sensor-augmented insulin delivery system, the t:slim X2™ Insulin Pump with Control-IQ™ technology, which integrates with our G6 system.

1 unchanged sentence

Any factors that may limit our partners’ ability to achieve widespread adoption of their systems, including competitive pressures, technological breakthroughs for the treatment or prevention of diabetes, adverse regulatory or legal actions relating to insulin pump products, or changes in reimbursement rates or policies of third-party payors relating to insulin pumps or similar products, could have an adverse impact on our operating results.

For example, Animas announced in September 2017 that it has discontinued the manufacturing and sale of Animas® Vibe® and OneTouch Ping® insulin pumps, then exited the insulin pump business.

Animas selected Medtronic as its partner to facilitate a seamless transition for patients, caregivers and healthcare providers.

Patients using an Animas insulin pump are offered the option to transfer to a Medtronic pump.

As Animas Vibe is compatible with DexCom’s products, and Animas has served as a distributor for our products in certain geographies, the transition of Animas customers to Medtronic pumps, which are not integrated with our sensors, may adversely impact our revenues.

As another example, UnitedHealthcare announced, effective July 1, 2016, that UnitedHealthcare Community Plan and Commercial members will no longer have an in-network choice among providers of insulin pumps, and designated Medtronic as its preferred, in-network provider.

We do not have a relationship to integrate our CGM technology with Medtronic, which has developed an insulin pump augmented with its proprietary CGM system.

The decision by UnitedHealthcare to establish Medtronic as its preferred provider of insulin pumps could result in a material reduction in the number of insulin pumps sold by other insulin pump manufacturers, including Tandem and Insulet.

In addition, it is possible that other large third-party payors will establish preferred providers of insulin pumps, which may or may not include the pumps produced by our development partners.

Many of the companies that we collaborate with are also competitors or potential competitors who may decide to terminate our collaborative arrangement.

9 unchanged sentences

We depend to a significant degree on our senior management, especially Kevin Sayer, our President and Chief Executive Officer.

Our success will depend on our ability to retain our senior management and to attract and retain qualified personnel in

the future, including salespersons, scientists, clinicians, engineers and other highly skilled personnel.

Our success will depend on our ability to retain our senior management and to attract and retain qualified personnel in the future, including salespersons, scientists, clinicians, engineers and other highly skilled personnel.

Competition for senior management personnel, as well as salespersons, scientists, clinicians and engineers, is intense and we may not be able to retain our personnel.

14 unchanged sentences

We expect to continue to spend substantial amounts on commercialization of our products, including growth of our manufacturing capacity, and on research and development, including conducting clinical trials for our next-generation ambulatory CGM sensors and systems.

Although we raised $389.0 million in net proceeds through the private sale of our convertible notes in June 2017, $75.0 million of which was used to repay our credit facility, $836.6 million in net proceeds through the private sale of our 2023 Notes in November 2018, $100.0 million of which we used to purchase shares of our common stock, and now have $194.6 million available to us under our credit facility (as reduced by our outstanding letters of credit), we could need funds to continue the commercialization of our current products and to develop and commercialize our next-generation sensors and systems or pursue other strategic initiatives.

Although we raised $389.0 million in net proceeds through the private sale of our convertible notes or 2022 Notes in June 2017, $75.0 million of which was used to repay our Credit Facility, $836.6 million in net proceeds through the private sale of our 2023 Notes in November 2018, $100.0 million of which we used to purchase shares of our common stock, $1.19 billion in net proceeds through the private sale of our 2025 Notes in May 2020, $282.6 million of which we used to repurchase a portion of our 2022 Notes, and now have $194.6 million available to us under our Credit Facility (as reduced by our outstanding letters of credit), we could need funds to continue the commercialization of our current products and to develop and commercialize our next-generation sensors and systems or pursue other strategic initiatives.

Additional financing may not be available on a timely basis on terms acceptable to us, or at all.

26 unchanged sentences

A number of our customers have adopted, or may adopt, procurement policies that include E&S provisions that their suppliers must comply with, or they may seek to include such provisions in their terms and conditions.

An increasing number of participants in the medical device industry are also joining voluntary E&S initiatives, such as the Responsible Business Alliance.

An increasing number of participants in the medical device

industry are also joining voluntary E&S initiatives, such as the Responsible Business Alliance.

These E&S provisions and initiatives are subject to change, can be unpredictable, and may be difficult and expensive for us to comply with, given the complexity of our supply chain and the outsourced manufacturing of certain components of our products.

4 unchanged sentences

As a result, we may face difficulties in satisfying these customers’ demands, which may harm our sales and operating results.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations which could subject our business to higher tax liability.

Our ability to use our net operating losses, or NOLs, to offset future taxable income may be subject to certain limitations which could subject our business to higher tax liability.

We may be limited in the portion of NOL carryforwards that we can use in the future to offset taxable income for U.S.

federal and state income tax purposes, and federal tax credits to offset federal tax liabilities.

Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, limit the use of NOLs and tax credits after a cumulative change in corporate ownership of more than 50% occurs within a three-year period.

The statutes place a formula limit on how much NOLs and tax credits a corporation can use in a tax year after a change in ownership.

Avoiding an ownership change is generally beyond our control.

Although the ownership changes we experienced in the past and in the year ended December 31, 2019 have not prevented us from using all NOLs and tax credits accumulated before such ownership changes, we could experience another ownership change that might limit our use of NOLs and tax credits in the future.

There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security, or CARES Act, was signed into law.

The CARES Act changes certain provisions of the Tax Act.

Under the CARES Act, NOLs arising in taxable years beginning after December 31, 2017 and before January 1, 2021 may be carried back to each of the five taxable years preceding the tax year of such loss, but NOLs arising in taxable years beginning after December 31, 2020 may not be carried back.

Under the Tax Cuts and Jobs Act of 2017, or Tax Act, as modified by the CARES Act, NOLs from tax years that began after December 31, 2017 may offset no more than 80% of current taxable income annually for taxable years beginning after December 31, 2020.

Accordingly, if we generate NOLs after the tax year ended December 31, 2017, we might have to pay more federal income taxes in a subsequent year as a result of the 80% taxable income limitation than we would have had to pay under the law in effect before the Tax Act as modified by the CARES Act.

Risks Related to Healthcare Industry Shifts and Changing Regulations

13 unchanged sentences

We are unable to predict the extent to which this pandemic will impact our business and operating results, including new information that may emerge concerning the virus and the actions to contain it or to treat COVID-19, among others.

Managed care trends and consolidation in the health care industry could have an adverse effect on our revenues and results of operations.

Managed care trends and consolidation in the health care industry could have an adverse effect on our revenues and results

of operations.

Private third-party payors and other managed care organizations, such as pharmacy benefit managers, continue to take action to manage the utilization and control cost.

29 unchanged sentences

Proposals range from establishing a single-payor, national health insurance system (e.g., Medicare for All Act of 2019 (H.R.

1384), to more limited buy-in options that would be available to individuals above a certain age (e.g., Medicare at 50 Act (S.

There is also legislation that would authorize states to permit individuals to “buy-in” to their state Medicaid program

(e.g., State Public Option Act (S.

1384), to more limited buy-in options that would be available to individuals above a certain age (e.g., Medicare at 50 Act

There is also legislation that would authorize states to permit individuals to “buy-in” to their state Medicaid program (e.g., State Public Option Act (S.

If enacted, these proposals will likely have a significant impact on the healthcare industry.

37 unchanged sentences

Compliance obligations under these various laws are oftentimes detailed and onerous, further contributing to the risk that we could be found to be out of compliance with particular requirements.

The risk of being found in violation of these laws and regulations is further increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, particularly with respect to new and emerging technologies and remote delivery of services, and their provisions are open to a

variety of interpretations.

The risk of being found in violation of these laws and regulations is further increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts,

particularly with respect to new and emerging technologies and remote delivery of services, and their provisions are open to a variety of interpretations.

The FDA, CMS, OIG, Department of Justice, states’ attorneys general and other governmental authorities actively enforce the laws and regulations discussed above.

28 unchanged sentences

Additionally, as a manufacturer of U.S.

FDA‑approved devices reimbursable by federal healthcare programs, we are subject to the federal Physician Payments Sunshine Act, which requires us to annually report certain payments and other transfers of value we make to U.S.-licensed physicians or U.S.

physicians or U.S.

teaching hospitals.

On October 25, 2018, President Trump signed into law the “Substance Use-Disorder

Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act.” This law, in part (under a provision entitled “Fighting the Opioid Epidemic with Sunshine”), extends the reporting and transparency requirements for physicians in the Physician Payments Sunshine Act, to physician assistants, nurse practitioners, and other mid-level practitioners.

On October 25, 2018, President Trump signed into law the “Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act.” This law, in part (under a provision entitled “Fighting the Opioid Epidemic with Sunshine”), extends the reporting and transparency requirements for physicians in the Physician Payments Sunshine Act, to physician assistants, nurse practitioners, and other mid-level practitioners.

Reporting requirements will go into effect in 2022 for payments and transfers of value made to these additional practitioner-types in 2021.

113 unchanged sentences

For example, the Federal Trade Commission uses its consumer protection authority to initiate enforcement actions in response to alleged privacy and data security violations.

California recently enacted the California Consumer Privacy Act, or CCPA, which goes into effect January 1, 2020.

California recently enacted the California Consumer Privacy Act, or CCPA, which came into effect January 1, 2020.

The CCPA, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information.

12 unchanged sentences

Due to the strong consumer protection aspects of the GDPR, companies subject to its purview are allocating substantial legal costs to the development of necessary policies and procedures and overall compliance efforts.

For example, following a decision of the Court of Justice of the EU in October 2015, the transfer of personal data to US companies that had certified as members of the US Safe Harbor Scheme was declared invalid.

In July 2016, the European Commission adopted the EU-US Privacy Shield Framework, or the Privacy Shield Framework, which replaced the US Safe Harbor Scheme.

On July 16, 2020, the Court of Justice of the European Union issued a decision that declared the Privacy Shield Framework invalid, and will also result in additional compliance obligations for companies that implement standard contractual clauses to ensure a valid basis for the transfer of personal data outside of Europe.

We expect continued costs associated with maintaining compliance with GDPR into the future, and these provisions as interpreted by EU agencies, could negatively impact our business, financial condition and results of operations.

19 unchanged sentences

As a result, cybersecurity, physical security and the continued development and enhancement of our controls, processes and practices designed to protect our enterprise, information systems and data from attack, damage or unauthorized access remain a priority for us.

As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any cybersecurity vulnerabilities.

As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our

protective measures or to investigate and remediate any cybersecurity vulnerabilities.

The occurrence of any of these events could result in:

69 unchanged sentences

Furthermore, during economic uncertainty, our customers have had job losses and may continue to have issues gaining timely access to sufficient health insurance or credit, which could result in their unwillingness to purchase products or impair their ability to make timely payments to us.

While the potential economic impact brought by and the duration of the COVID-19 pandemic may be difficult to assess or predict, it has already caused, and is likely to result in further, significant disruption of global financial markets, which may reduce our ability to access capital on favorable terms or at all.

In addition, a recession, depression or other

sustained adverse market event resulting from the spread of COVID-19 could materially and adversely affect our business and the value of our common stock.

While the potential economic impact brought by and the duration of the COVID-19 pandemic may

be difficult to assess or predict, it has already caused, and is likely to result in further, significant disruption of global financial markets, which may reduce our ability to access capital on favorable terms or at all.

In addition, a recession, depression or other sustained adverse market event resulting from the spread of COVID-19 could materially and adversely affect our business and the value of our common stock.

We cannot predict the reoccurrence of any economic slowdown or the strength or sustainability of the economic recovery, worldwide, in the United States, or in our industry.

1 unchanged sentence

We are subject to a variety of risks due to our international operations that could adversely affect our business, our operations or profitability and operating results.

Our operations in countries outside the United States, which accounted for approximately 28% of our revenues for the three months ended March 31, 2020 , are accompanied by certain financial and other risks.

Our operations in countries outside the United States, which accounted for approximately 23% of our revenues for the six months ended June 30, 2020 , are accompanied by certain financial and other risks.

In addition to opening offices in Austria, Canada, Germany, the Philippines, Switzerland and the United Kingdom , in connection with distributor acquisitions and otherwise, we intend to continue to pursue growth opportunities in sales outside the United States, especially in Asia (including Japan and Korea) and Europe, and we may increase our use of administrative and support functions from locations outside the United States, which could expose us to greater risks associated with our sales and operations.

27 unchanged sentences

We may not obtain foreign regulatory authorizations or approvals on a timely basis, if at all.

Obtaining a marketing authorization from the FDA does not ensure authorization or approval by regulatory authorities in other countries, and authorization or approval by one foreign regulatory authority does not ensure authorization or approval by regulatory authorities in other foreign countries or by

Obtaining a marketing authorization from the FDA

does not ensure authorization or approval by regulatory authorities in other countries, and authorization or approval by one foreign regulatory authority does not ensure authorization or approval by regulatory authorities in other foreign countries or by the FDA.

In addition, in order to obtain the authorization to market our products in certain foreign jurisdictions, we may need to obtain a Certificate to Foreign Government from the FDA.

27 unchanged sentences

We received licenses to certain intellectual property.

All pending litigation and other proceedings between Dexcom and AgaMatrix and WaveForm have been dismissed, or will be dismissed with prejudice by no later than May 8, 2020.

As of March 31, 2020 we have accrued no amounts for contingent losses associated with these suits.

All pending litigation and other proceedings between Dexcom and AgaMatrix and WaveForm have been dismissed.

As of June 30, 2020, we have accrued no amounts for contingent losses associated with these suits.

Any infringement or misappropriation claim could cause us to incur significant costs, place significant strain on our financial resources, divert management’s attention from our business and harm our reputation.

3 unchanged sentences

Even if we are able to redesign our products to avoid an infringement claim, we may not receive FDA approval for such changes in a timely manner or at all.

Any adverse determination in litigation or interference proceedings to which we are or may become a party relating to patents or other intellectual property rights could subject us to significant liabilities to third parties or require us to seek licenses

from other third parties.

If we are found to infringe third-party patents, a court could order us to pay damages to compensate the patent owner for the infringement, such as a reasonable royalty amount and/or profits lost by the patent owners, along with prejudgment and/or post-judgment interest.

59 unchanged sentences

We may be subject to fines, penalties and injunctions if we are determined to be promoting the use of our products for unapproved or improper off-label uses.

Although we believe our promotional materials and practices comply with FDCA and other applicable laws and regulations, as may be amended from time to time, if the FDA or other regulatory body with competent jurisdiction over us, our activities or products takes the position that our marketing, promotional or other materials or activities constitute improper promotion or marketing of an unapproved or improper use, the FDA or other regulatory body could request that we modify our

materials or practices, or subject us to regulatory enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine and criminal penalties.

It is also possible that other federal, state or foreign enforcement authorities might take action if they consider promotional, marketing or other materials or activities to constitute improper promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.

1 unchanged sentence

however, there are still significant risks in this area in part due to the potential False Claims Act exposure.

We are not actively promoting nor do we plan to actively promote our G6 CGM devices for inpatient use, but if we supply them to such facilities as currently permitted by FDA, this supply could present an increased risk of product liability claims and associated damages should an adverse even occur.

Given that the G6-CGM has not yet been fully evaluated or tested (by DexCom or by the FDA) to the extent that would be required in standard circumstances for product development and marketing authorization, there could be unknown or unanticipated risks presented by use in this environment.

We are not actively promoting nor do we plan to actively promote our G6 CGM systems for inpatient use, but if we supply them to such facilities as currently permitted by FDA, this supply could present an increased risk of product liability claims and associated damages should an adverse event occur.

Given that the G6 CGM system has not yet been fully evaluated or tested (by DexCom or by the FDA) to the extent that would be required in standard circumstances for product development and marketing authorization, there could be unknown or unanticipated risks presented by use in this environment.

Direct-to-consumer marketing and social media effort may expose us to additional regulatory scrutiny.

60 unchanged sentences

Historically, the market price of our common stock, like the securities of many other medical products companies, fluctuates and could continue to be volatile in the future.

From January 1, 2020 through April 22, 2020 , the closing price of our common stock on the Nasdaq Global Select Market was as high as $323.40 per share and as low as $191.16 per share.

From January 1, 2020 through July 21, 2020 , the closing price of our common stock on the Nasdaq Global Select Market was as high as $440.50 per share and as low as $191.16 per share.

In addition, the trading prices for our common stock and other medical device companies have been highly volatile as a result of the COVID-19 pandemic.

33 unchanged sentences

These agreements impose numerous financial and other restrictive covenants on our operations, including covenants relating to our general profitability and our liquidity.

As of March 31, 2020 , we were in compliance with the covenants imposed by the loan and security agreement.

As of June 30, 2020 , we were in compliance with the covenants imposed by the loan and security agreement.

If we violate these or any other covenants, any outstanding amounts under these agreements could become due and payable prior to their stated maturity dates, each lender could proceed against any collateral in our operating accounts and our ability to borrow funds in the future may be restricted or eliminated.

2 unchanged sentences

In December 2018, we entered into a five-year $200.0 million revolving credit agreement.

As of March 31, 2020 , we had no outstanding borrowings, $5.4 million in outstanding letters of credit, and a total available balance of $194.6 million under our multi-currency revolving credit facility.

As of June 30, 2020 , we had no outstanding borrowings, $5.4 million in outstanding letters of credit, and a total available balance of $194.6 million under our multi-currency revolving credit facility.

Our leverage ratio may affect the availability to us of additional capital resources as well as our operations in several ways, including:

9 unchanged sentences

The market price of our common stock could also decline if there is a perception that sales of our shares are likely to occur in the future.

This might also make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

This might also make it more difficult for us to sell equity securities in the future at a time and at a

price that we deem appropriate.

Also, we may issue securities in connection with future financings and acquisitions, and those shares could dilute the holdings of other stockholders.

1 unchanged sentence

We have never declared or paid cash dividends on our capital stock.

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future and the terms of our credit agreement restrict our ability to declare or pay dividends.

As a result, stockholders (including holders of our senior convertible notes who receive shares of our common stock, if any, upon conversion of their notes) may only receive a return on their investment in our common stock if the market price of our common stock increases.

11 unchanged sentences

In November 2018, we completed an offering of $850.0 million aggregate principal amount of 0.75% convertible senior notes due 2023, or 2023 Notes, which offering we refer to as the 2018 Notes Offering.

We refer to the 2017 Notes Offering and the 2018 Notes Offering together as the Notes Offerings, and we refer to the 2022 Notes and the 2023 Notes together as the Notes.

In May 2020, we completed an offering of approximately $1.21 billion aggregate principal amount of 0.25% convertible senior notes due 2025, or 2025 notes, which offering we refer to as the 2020 Notes Offering.

We refer to the 2017 Notes Offering, the 2018 Notes Offering and the 2020 Notes Offering, collectively, as the Notes Offerings, and we refer to the 2022 Notes,the 2023 Notes and the 2025 Notes, collectively, as the Notes.

As a result of the Notes Offerings, we incurred $2.46 billion principal amount of indebtedness, the principal amount of which we may be required to pay at maturity.

Holders of the Notes will have the right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the indenture for each of the 2022 Notes and the 2023 Notes) at a purchase price equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest, if any.

Holders of the Notes will have the right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the indenture for each of the Notes) at a purchase price equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest, if any.

In addition, each indenture for the Notes provides that we are required to repay amounts due under each indenture in the event that there is an event of default for the Notes that results in the principal, premium, if any, and interest, if any, becoming due prior to maturity date for the Notes.

2 unchanged sentences

our vulnerability to adverse general economic conditions and competitive pressures will be heightened;

we will be required to dedicate a larger portion of our cash flow from operations to interest payments, limiting

the availability of cash for other purposes;

we will be required to dedicate a larger portion of our cash flow from operations to interest payments, limiting the availability of cash for other purposes;

our flexibility in planning for, or reacting to, changes in our business and industry may be more limited;

our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes may be impaired.

We cannot be sure that our leverage resulting from the level of increased debt after the completion of the Notes Offerings will not materially and adversely affect our ability to finance our operations or capital needs or to engage in other business activities.

In addition, we cannot be sure that additional financing will be available when required or, if available, will be on terms satisfactory to us.

Further, even if we are able to obtain additional financing, we may be required to use such proceeds to repay a portion of our debt.

We may be unable to repurchase the Notes upon a fundamental change when required by the holders or repay prior to maturity any accelerated amounts due under the notes upon an event of default or redeem the Notes unless specified conditions are met under our credit facility, and our future debt may contain limitations on our ability to pay cash upon conversion, repurchase or repayment of the Notes.

We may be unable to repurchase the Notes upon a fundamental change when required by the holders or repay prior to maturity any accelerated amounts due under the notes upon an event of default or redeem the Notes unless specified conditions are met under our credit facility, and our future debt may contain additional limitations on our ability to pay cash upon conversion, repurchase or repayment of the Notes.

Holders of the Notes will have the right to require us to repurchase their Notes upon the occurrence of a fundamental change at a purchase price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest, if any, to, but not including, the fundamental change purchase date.

17 unchanged sentences

The option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock in secondary market transactions prior to the maturity of 2023 Notes (and are likely to do so during any observation period related to a conversion of 2023 Notes, or following any repurchase of Notes by us on any fundamental change repurchase date (as defined in the indenture for the 2023 Notes) or otherwise).

activity occurs during any observation period related to a conversion of the 2023 Notes, it could affect the amount and value of the consideration that note holders will receive upon conversion of the 2023 Notes.

This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the 2023 Notes, which could affect note holders’ ability to convert the 2023 Notes and, to the extent the activity occurs during any observation period related to a conversion of the 2023 Notes, it could affect the amount and value of the consideration that note holders will receive upon conversion of the 2023 Notes.

The potential effect, if any, of these transactions and activities on the market price of our common stock or the 2023 Notes will depend in part on market conditions and cannot be ascertained at this time.

Any of these activities could adversely affect the value of our common stock and the value of the 2023 Notes (and as a result, the value of the consideration, the amount of cash and/or the number of shares, if any, that note holders would receive upon the conversion of the 2023 Notes) and, under certain circumstances, the ability of the note holders to convert the 2023 Notes.

Any of these activities could adversely affect the value of our common stock and the value of the 2023 Notes (and as a result, the value of the consideration, the amount of

cash and/or the number of shares, if any, that note holders would receive upon the conversion of the 2023 Notes) and, under certain circumstances, the ability of the note holders to convert the 2023 Notes.

We do not make any representation or prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the price of the 2023 Notes or our common stock.

19 unchanged sentences

In addition, our credit facility and the agreements governing the notes each contain cross-default provisions whereby a default under one agreement would likely result in cross defaults under agreements covering other borrowings.

For example, the occurrence of a default with respect to any indebtedness or any failure to repay debt when due in an amount in excess of $25.0 million that causes such indebtedness to become due prior to its scheduled maturity date would cause a cross default under the indenture governing the Notes.

For example, the occurrence of a default with respect to any indebtedness or any failure to repay debt when due in an amount in excess of $25.0 million, in the case of the 2022 Notes and 2023 Notes, and $50.0 million, in the case of the 2025 Notes, that causes such indebtedness to become due prior to its scheduled maturity date would cause a cross default under the indenture governing the Notes.

In addition, the occurrence of a default with respect to any indebtedness or any failure to repay debt when due in an amount in excess of $15.0 million that causes such indebtedness to become due prior to its scheduled maturity date would cause a default under our credit facility.

25 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors