What changed in this filing

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Item 1. Business

2021-03-05 compared with 2020-03-16 · 204 added, 117 removed, 401 unchanged (44% of the section changed)

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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.

Our focus on the development and approval of the extended life Eversense XL to the U.S.

market is ongoing and in September 2019, we completed enrollment of the PROMISE 180-day U.S.

pivotal clinical trial of Eversense XL with over 180 subjects enrolled across eight clinical sites.

We expect to report topline data from the PROMISE trial in the second quarter of 2020.

If the data from the PROMISE trial are positive, we intend to use the data in a regulatory submission to the FDA to expand the Eversense system use for up to 180 days in the United States and expect this approval by the end of 2020.

We also intend to use data from the first 90 days of the PROMISE trial, if positive, to support a regulatory submission to the FDA for an integrated, or iCGM, designation for our current Eversense 90-day system, which the FDA could potentially approve in the second half of 2020.

This would allow Eversense to integrate with other compatible medical devices and electronic interfaces, such as automated insulin dosing systems, insulin pumps, and blood glucose meters.

Our focus on the development and approval of the extended life Eversense 180-day product for the U.S.

market is ongoing.

On September 30, 2019, we completed enrollment of the PROMISE trial and had our last patient complete their 180-day visit during the first quarter of 2020.

The 181 participants in the trial had the Eversense sensor inserted subcutaneously at eight sites across the United States where the safety and efficacy of the system was evaluated over a 180-day period.

In the trial, we observed performance matching that of the current Eversense 90-day product available in the United States, with a mean absolute relative difference, or MARD, of 8.5%-9.6%.

This result was achieved with reduced calibration, down to one per day, while also doubling the sensor life to 180 days.

Following the results of the PROMISE trial, on September 30, 2020, a Premarket Approval, or PMA, supplement application to extend the wearable life of the Eversense CGM System to 180 days was submitted to the FDA.

If approved by the FDA, this new product would approximately double sensor duration of Eversense in the United States, reducing by half the number of insertion and removal procedures required, and would provide more than 12 times longer sensor duration than other CGM systems available in the United States.

Following the submission of the PMA, we have received communication from the FDA advising us that the reallocation of agency resources to address Emergency Use Authorization (EUA) applications for products related to the COVID-19 public health emergency is affecting marketing application reviews, including the Eversense 180-day product.

Based on a February 19, 2021 communication, we understand that the FDA expects to assign a reviewer, and that our PMA will be placed under review no later than April 15, 2021.

Based on the passage of time and this new expectation from the FDA, we are anticipating approval no earlier than the second half of the year and note that the timing to completion and outcome of such a review is uncertain.

If we receive a positive decision and product approval, we expect to begin transitioning patients in the United States to the new 180-day Eversense product shortly thereafter.

Further reallocation of agency resources, shelter-in-place orders and other impacts from the COVID-19 pandemic are difficult to predict and could alter or delay the timing of response by the FDA regarding our submission .

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.

Following information gathered from this sub-set and continued development efforts, and pending developments at the FDA relating to the ongoing COVID-19 pandemic, in the second half of 2021 we plan to seek Investigational Device Exemption, or IDE, from the FDA to explore the 365 day sensor in a clinical trial.

If the IDE is approved in a timely manner, we would target to begin enrollment of a clinical trial, which we also intend to include a pediatric population, in the first half of 2022.

In April 2020, we announced that we received regulatory approval in Europe 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.

During 2020 we initiated a new commercialization strategy and collaboration to bring our product to market.

As described in detail below, in August 2020, we entered into a collaboration and commercialization agreement with Ascensia Diabetes Care Holdings AG, or Ascensia, pursuant to which we granted Ascensia the exclusive right to distribute our 90-day Eversense continuous glucose monitoring system and our 180-day Eversense continuous glucose monitoring system worldwide, with certain initial exceptions.

While Ascensia is responsible for sales, marketing, market access, patient and provider onboarding and first level customer support, we remain responsible for product development and manufacturing, including regulatory submissions, approvals and registrations and second level customer support.

2020 and Significant Recent Developments

On January 30, 2020, the World Health Organization, or the WHO, announced a global health emergency because of a new strain of coronavirus, or COVID-19, and the risks to the international community as the virus spreads globally.

On March 11, 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.

In response to the pandemic, many states and jurisdictions issued stay-at-home orders and other measures aimed at slowing the spread of the coronavirus.

The state of Maryland, where we are headquartered, has been affected by COVID-19.

The Governor of Maryland issued an order closing all non-essential businesses, which took effect on March 23, 2020.

Although the state of Maryland is gradually undergoing a phased reopening plan, substantially all of our workforce is still working from home either all or substantially all of the time.

Additionally, because our sensor requires an in-clinic procedure, we saw a reduction in access to clinics and sensor insertions during the initial outbreak.

During the latter half of 2020, several new order requests from our distributors led to adjustments to concession allowances previously provided to some of our customers in the United States to reflect actual product usage.

While these trends are promising, insertion volumes are still below pre-COVID-19 levels.

Additionally, the COVID-19 pandemic infection rates in the United States are still high, vaccine distribution has only just begun, and it is difficult to predict the longevity and severity COVID-19 will have on our business.

Restructuring and Transition of Commercial Strategy

As a result of the COVID-19 pandemic’s disruption to our operations, suppliers, employees, and the healthcare community in which we sell to and support, and our limited cash resources, we made significant reductions in our cost structure and operations to improve cash flow and generate future expenditure savings to ensure the long-term success of Eversense.

Specifically, in the first quarter of 2020, we temporarily suspended commercial sales and marketing of the Eversense CGM System in the United States to new patients to solely focus our resources on supporting existing users, including ensuring broader insurance coverage for Eversense, and the development and regulatory submission of our new 180-day Eversense product in the United States.

In connection with these actions, on March 26, 2020, we reduced our workforce by approximately 60%, over half of which were sales personnel.

On August 9, 2020, we entered into a collaboration and commercialization agreement with Ascensia pursuant to which we granted Ascensia the exclusive right to distribute our 90-day Eversense continuous glucose monitoring system and our 180-day Eversense continuous glucose monitoring system worldwide for people with diabetes, 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, 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 does 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 does 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 the parties have been planning and making arrangements for Ascensia to ramp up sales activities and more fully assume commercial responsibilities in the second quarter of 2021.

The Eversense 180-day product is planned to be marketed upon receipt of marketing approval from the FDA.

In Germany, Italy and Switzerland, Spain, Poland and the Netherlands, Ascensia assumed commercial responsibilities for Eversense XL beginning on February 1, 2021.

For Sweden and Norway, Ascensia will assume commercial responsibilities later this year.

Ascensia is entitled to receive a portion of net revenue at specified tiered percentages ranging from the mid-teens to the mid-forty’s based on levels of global net revenues.

Ascensia is obligated to achieve specified minimum annual revenue targets and meet specified levels of sales and marketing spend in order to maintain its exclusive distribution rights.

Ascensia purchases Eversense and Eversense XL from us at negotiated prices.

We remain responsible for product development and manufacturing, including regulatory submissions, approvals and registrations and second level customer support, and Ascensia is responsible for sales, marketing, market access, patient and provider onboarding and first level customer support.

We have agreed to establish a joint alliance committee and joint marketing committee, each with equal representation from each party, in order to collaborate.

Diabetes is a chronic, life-threatening disease for which there is no known cure.

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In an attempt to maintain blood glucose levels within the normal range, many people with diabetes seek to actively monitor their blood glucose levels.

The traditional self-monitoring of blood glucose, or SMBG, method of glucose monitoring requires lancing the fingertips, commonly referred to as fingersticks, multiple times per day and

night to obtain a blood drop to be applied to a test strip inside a blood glucose meter.

The traditional self-monitoring of blood glucose, or SMBG, method of glucose monitoring requires lancing the fingertips, commonly referred to as fingersticks, multiple times per day and night to obtain a blood drop to be applied to a test strip inside a blood glucose meter.

This method of monitoring glucose levels is inconvenient and can be painful and, because each measurement represents a single blood glucose value at a single point in time, it provides limited information regarding trends in blood glucose levels.

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As a result, CGMs improve glycemic control and quality of life, particularly in patients with type 1 diabetes treated with continuous subcutaneous insulin infusion or multiple daily insulin injection therapy, and support avoidance of hypoglycemia.

Historically, the FDA and other device regulators required that CGMs be labeled and marketed as "adjunctive" to test-strip measurements, with instructions that patients confirm CGM measurements with test-strip measurements using blood obtained from fingersticks prior to self-medicating.

However, given the broader clinical indications for the use of CGM systems, including real-time alerts and multi-device integration, the FDA issued the first “non-adjunctive”

label in 2016.

Historically, the FDA and other device regulators required that CGMs be labeled and marketed as "adjunctive"

to test-strip measurements, with instructions that patients confirm CGM measurements with test-strip measurements using blood obtained from fingersticks prior to self-medicating.

However, given the broader clinical indications for the use of CGM systems, including real-time alerts and multi-device integration, the FDA issued the first “non-adjunctive” label in 2016.

In June 2019, an updated Eversense CGM system received a non-adjunctive label from the FDA and can now be used as a replacement to fingerstick glucose testing for treatment decisions.

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In November 2019, the Centers for Medicare and Medicaid Services, or CMS, finalized a national payment rate for Eversense that was recently published in the calendar year 2020 Physician Fee Schedule Final Rule.

The Eversense CGM system will be the first CGM technology to be reimbursed through the Part B Medical Services benefit for Medicare beneficiaries and expands access to our product.

We expect Medicare beneficiaries to be able to use Eversense as part of their diabetes treatment plan in 2020.

The Eversense CGM system became the first CGM technology to be reimbursed through the Part B Medical Services benefit for Medicare beneficiaries and expands access to our product.

In December 2020, the Centers for Medicare and Medicaid Services, or CMS, released its Calendar Year 2021 Medicare Physician Fee Schedule that establishes global payment for the device cost and procedure fees for healthcare providers across the United States.

This includes the 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

We are headquartered in Germantown, Maryland.

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Commercial Strategy

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

We are in the process of transitioning to selling our product globally through Ascensia from selling directly to our network of distributors and strategic fulfillment partners, who provide the Eversense CGM system to healthcare providers and patients through a prescribed request and invoice insurance payors for reimbursement, as noted above in “2020 and Recent Developments”.

Sales of the Eversense CGM 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.

Addressing reimbursement and access barriers is a top priority for us and during 2019 we reached over 100 million covered lives through positive insurance payor coverage decisions.

We launched the Eversense Bridge Program, a patient access program in the U.S.

that provides financial assistance to eligible patients whose insurance coverage either does not yet cover Eversense, or in cases where Eversense is covered but the patient’s co-insurance is limiting their ability to adopt Eversense.

Participants in the Eversense Bridge Program who do not currently have coverage for Eversense are enrolled in a follow-on appeals program that utilizes patients’

right to appeal to help obtain approval for Eversense beyond the limited financial assistance of the Eversense Bridge Program.

These programs play an important role in our journey to obtain broader payor policy and long-term patient retention.

In the United States, we have a direct sales organization that consists of sales representatives, clinical trainers, customer care, and other specialists to educate, train, and support the patient and healthcare provider in their diabetes management with CGM systems.

Our field sales team target endocrinologists in the country who are clinically active and diabetes focused.

In our overseas markets, we entered into distribution agreements that allow third-party collaborators with direct sales forces and established distribution systems to market and promote Eversense XL primarily in the EMEA.

We have an exclusive distribution agreement for sales in Scandinavia and an exclusive distribution agreement with Roche Diabetes Care for sales in the rest of the EMEA, excluding Israel and Scandinavia, and in 17 additional countries,

including Brazil, Russia, India, and China, as well as select markets in the Asia Pacific and Latin American regions.

Currently Eversense is available in 15 countries outside of the United States.

Ascensia plans to leverage and target regions where we have coverage decisions for patient device use and provider insertion and removal procedure payment.

In the first quarter of 2020, we temporarily suspended commercial sales and marketing of the Eversense CGM System in the United States to new patients to solely focus our resources on supporting existing users.

In connection with these actions, on March 26, 2020, we reduced our direct sales organization that consists of sales representatives, clinical trainers, customer care, and other specialists to educate, train, and support the patient and healthcare provider in their diabetes management with CGM systems.

In the third quarter of 2020, we announced the formation of a strategic partnership with Ascensia, pursuant to which Ascensia became the exclusive worldwide distribution partner for Senseonics CGM systems, including Eversense®, Eversense® XL and future generations products.

In the fourth quarter of 2020, Ascensia initiated U.S.

marketing and sales activities and full transition of commercial activities is expected in the second quarter of 2021, to include full marketing, market access, sales, healthcare provider training and frontline patient and provider support responsibilities.

Ascensia has begun expanding its U.S.

commercial organization and expects its initial U.S.

staffing to be in place by the second quarter of 2021 in support of Eversense.

Addressing reimbursement and access barriers has been a top priority for us and during 2020 we reached over 200 million covered lives in the U.S.

through positive insurance payor coverage decisions.

In 2020, we continued the Eversense Bridge Program, a patient access program in the U.S.

Having played an important role in our journey to obtain broader payor policy and long-term patient retention, the Eversense Bridge Program ended on December 31, 2020.We expect Ascensia, in consultation with the company, to initiate a patient assistance program in the market once full commercial responsibility is transitioned in the near future.

In our overseas markets, we had entered into distribution agreements that allow third-party collaborators with direct sales forces and established distribution systems to market and promote Eversense XL primarily in the EMEA.

These distribution arrangements are in the process of being replaced by our collaboration with Ascensia.

Our exclusive distribution agreement for sales in Scandinavia and our exclusive distribution agreement with Roche Diabetes Care for

sales in the rest of the EMEA, excluding Israel and Scandinavia, and in 17 additional countries, including Brazil, Russia, India, and China, as well as select markets in the Asia Pacific and Latin American regions expire in 2021, with the Roche agreement having expired January 31, 2021.

Upon conclusion of each of these agreements, Ascensia is assuming commercialization activities in select countries where Eversense XL has already launched, beginning February 1, 2021 for Germany, Italy, Switzerland, Spain, Poland, and Netherlands.

Roche will continue to support certain transition activities for approximately six months in other markets.

The transition of Rubin markets is planned to occur later in 2021.

Our net revenues are derived from sales of the Eversense CGM system which is sold in two separate kits:

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On May 24, 2016, we entered into an exclusive distribution agreement with Roche Diagnostics International AG and Roche Diabetes Care GmbH, or collectively, Roche.

Pursuant to the agreement, as amended, we have granted Roche the exclusive right to market, sell and distribute Eversense in the EMEA, excluding Scandinavia and Israel.

In addition, Roche has 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.

The distribution agreement has a term through January 31, 2021.

Roche is obligated to purchase from us specified minimum volumes of Eversense components at pre-determined prices.

On December 12, 2019, we further amended the distribution agreement to lower minimum volumes for 2020 and increase pricing for the remaining period of the contract.

The distribution agreement, as amended, is terminable by us under a number of circumstances, including if Roche materially breaches the terms of the agreement or fails to make certain minimum sales requirements.

The agreement is terminable by Roche under a number of circumstances, including if we materially breach the agreement, if the distribution of Eversense is enjoined in the covered territories or in the case of certain intellectual property infringement claims.

The agreement is terminable by either party if the other party becomes insolvent or subject to bankruptcy proceedings.

The termination rights contained in the agreement are generally subject to advance notice requirements and an opportunity to cure.

Further, Roche may terminate the agreement upon a change of control of our company with a transition period of the shorter of 18 months or the remaining term of the agreement.

Pursuant to the agreement, as amended, we 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.

On December 12, 2019, we amended the distribution agreement to lower minimum volumes for 2020 and increase pricing for the remaining period of the contract.

On November 20, 2020, we amended the distribution agreement and entered into a settlement agreement to facilitate transition to Ascensia as Roche sales concluded on January 31, 2021, including final purchases and transition support activities, and Roche’s obligation to purchase certain quantities of products at certain prices under the distribution agreement have now terminated.

The distribution rights under the agreement expired January 31, 2021, subject to Roche providing certain transition and wind-down services for approximately six months in markets where ADC is not initiating distribution.

Collaboration and Commercialization Agreement with Ascensia Diabetes Care Holdings AG

On August 9, 2020, we entered into a collaboration and commercialization agreement with Ascensia Diabetes Care Holdings AG pursuant to which we have granted Ascensia the exclusive right to distribute the Company’s 90-day Eversense continuous glucose monitoring system and our 180-day Eversense continuous glucose monitoring system worldwide for use in people with diabetes, with the following initial exceptions:

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, 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 does 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 does not include Israel.

Ascensia will receive a portion of net revenue at specified tiered percentages ranging from the mid-teens to the mid-forty’s based on levels of global net revenues.

Ascensia is obligated to achieve specified minimum annual revenue targets and meet specified levels of sales and marketing spend.

Ascensia will purchase Eversense and Eversense XL from us at prices which have been negotiated based on parameters set forth in the commercialization agreement.

We are responsible for product development and manufacturing, including regulatory submissions, approvals and registrations and second level customer support, and Ascensia is responsible for sales, marketing, market access, patient and provider onboarding and level one customer support.

We have agreed to establish a joint alliance committee and joint marketing committee, each with equal representation from each party, in order to collaborate.

Clinical Development and Regulatory Pathway

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pivotal trial was completed during 2016.

We received PMA approval from the FDA for the Eversense system in June 2018 and began selling commercially in the third quarter of 2018.

We received PMA approval from the FDA for the Eversense system in June 2018 for up to 90 days and began selling commercially in the third quarter of 2018.

In September 2019, we announced the enrollment completion for the PROMISE pivotal trial to evaluate the safety and accuracy of Eversense for a period of up to 180 days in the United States.

In September 2020, we filed with the FDA a Premarket Approval, or PMA, supplement application to extend the wearable life of the Eversense CGM System to up to 180 days.

We are also continuing to conduct a number of post-approval and feasibility studies.

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The clinical trial population consisted of subjects at least 18 years of age who had a clinically confirmed diagnosis of diabetes.

Subjects who had a history of severe hypoglycemia, defined as hypoglycemia resulting in loss of consciousness or seizure, or diabetic ketoacidosis, in the six months prior to the trial, were excluded from participation in

the clinical trial.

Accuracy measurements were taken at 1 day, 30 days, 60 days, and 90 days post-insertion.

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The lower the MARD of a glucose monitoring system, the more accurate the system and, therefore, the more reliable the system's readings.

During the trial, 75 subjects underwent unilateral sensor insertions and 15 subjects underwent bilateral sensor insertions in the clinic and used Eversense’s smart transmitter and mobile app at home for the next 90 days.

Subjects were blinded to the real-time glucose readings and trends during home-use and sensor readings were not used to adjust their treatment.

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On June 21, 2018, we received PMA approval from the FDA for the Eversense system.

We are distributing the Eversense system directly in the United States through our own direct sales and marketing organization.

We are distributing the 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.

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Over 180 subjects were enrolled in eight centers across the United States.

We completed enrollment in September 2019 and expect to report topline data in the second quarter of 2020.

If the data from the PROMISE trial are positive, we intend to use the data in a regulatory submission to the FDA to expand the Eversense system use for up to 180 days in the United States.

We expect such approval will happen by the end of 2020.

We also intend to use data from the first 90 days of the PROMISE trial, if positive, to support a regulatory submission to the FDA for an iCGM designation for our current Eversense 90-day system, which the FDA could potentially approve in the second half of 2020.

We completed enrollment in September 2019 and had our last patient complete their 180-day visit during the first quarter of 2020.

The clinical trial population consists of subjects at least 18 years of age who have had a clinically confirmed diagnosis of diabetes for at least one year.

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After screening, sensor(s) were inserted and accuracy measurements were taken at multiple visits during the first 30 days and then every 30 days to 180 days post-insertion or until sensor failure, if earlier than 180 days post-insertion.

In the trial, we observed performance matching that of the current Eversense 90-day product available in the United States, with a mean absolute relative difference, or MARD, of 8.5%-9.6%.

This result was achieved with reduced calibration, down to one per day, while also doubling the sensor life to 180 days.

Following the results of the PROMISE trial, on September 30, a Premarket Approval Application Supplement, or PMA supplement to extend the wearable life of the Eversense CGM System to 180 days was submitted to the FDA.

If approved by the FDA, this new product would double sensor duration of Eversense in the United States, reducing by half the number of insertion and removal procedures required, and would provide more than 12 times longer sensor duration than other CGM systems available in the United States.

This sub-set of 30 participants who all had sensors with the modified chemistry were left undisturbed for 365 days with the goal of measuring accuracy and longevity over the full 365 days.

Following information gathered from this sub-set and continued development efforts, and pending developments at the FDA relating to the ongoing the ongoing COVID-19 pandemic, in the second half of 2021 we plan to seek Investigational Device Exemption, or IDE, from the FDA.

If the IDE is approved in a timely manner, we would target to begin enrollment of a clinical trial, in which we also intend to include a pediatric population, in the first half of 2022.

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.

Our Technology

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In June 2019, we received FDA approval for the non-adjunctive indication for the Eversense system.

With this approval, the Eversense system can now be used as a therapeutic CGM to replace fingerstick blood glucose measurement for dosing decisions and was launched in December 2019.

With this approval, the Eversense system can be used as a therapeutic CGM to replace fingerstick blood glucose measurement for dosing decisions and was launched in December 2019.

We believe our implantable CGM system offers the following advantages to support the management of diabetes:

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● Convenience :

Our Eversense CGM system supports the patient’s lifestyle;

the smart transmitter is water resistant, rechargeable and can be removed and replaced without disturbing the sensor, strong but gentle-on-skin adhesive patches, wireless communication to patient’s mobile device or Apple Watch ®, including readings every five minutes whether the patient has their mobile device or not, remote monitoring that can be shared with up to five people, including health care providers, and tracking of meals and workouts for further diabetes treatment management.

Our Eversense CGM system supports the patient’s lifestyle;

● Vibe Alerts :

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The capsule is coated with a glucose-indicating hydrogel that is bound to the surface of the capsule through polymerization.

This hydrogel is energized, or excited, by a light-emitting diode, or LED, contained in the optical system of the sensor, causing the hydrogel to fluoresce, or glow.

photodiodes within the optical system of the sensor measure the degree of fluorescence of the hydrogel, which is proportional to the level of glucose present in the interstitial fluid.

This hydrogel is energized, or excited, by a light-emitting

diode, or LED, contained in the optical system of the sensor, causing the hydrogel to fluoresce, or glow.

Two photodiodes within the optical system of the sensor measure the degree of fluorescence of the hydrogel, which is proportional to the level of glucose present in the interstitial fluid.

The sensor then communicates the amount of fluorescence via a near field communication, or NFC, interface to the transmitter.

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We expect these product development initiatives to include system modifications and next generation enhancements that we believe will further increase the convenience and appeal of our products to the diabetes community.

We are focusing our future development efforts on enhancing current product by offering an iCGM for interoperability with other diabetes tech devices for use in automatic insulin delivery and decision support systems.

Additional near-term efforts include reducing the twice daily calibrations to once a day calibration, and further progressing to once a week calibration.

We are focusing our future development efforts on enhancing current product offerings by reducing the twice daily calibrations to once a day calibration, and further progressing to once per week calibration.

Our next generation sensor under feasibility testing now is designed to extend the sensor duration even longer at up to 365 days.

We expect the next generation sensor to support our goal of extending the market for long-term implantable CGM to include Type 2 patients not on intensive insulin therapy.

We are also developing our “Gemini”

product variation to allow for a 2-in-1 glucose monitoring system combining the functionality of CGM and Flash Glucose Monitoring, or FCM, in an implantable sensor that may be utilized with a smart transmitter to get continuous glucose readings and alerts, or be utilized through a swipe over the sensor with a smart phone to get on-demand glucose reading without a smart transmitter.

We are also developing our “Freedom” product variation to allow for a 2-in-1 glucose monitoring system combining the functionality of CGM and Flash Glucose Monitoring, or FGM, in an implantable sensor that may be utilized with a smart transmitter to get continuous glucose readings and alerts, or be utilized through a swipe over the sensor with a smart phone to get on-demand glucose reading without a smart transmitter.

We are seeking to ensure that we meet the growing and unique needs of people with diabetes utilizing our core and proprietary sensor technology.

The company’s technology also has potential applications measuring analytes other than glucose, such as oxygen, and the company may consider opportunities for the development or out-licensing of such applications.

Sales and Marketing

We are in the early commercialization stages of Eversense and are focused on driving awareness and adoption of our CGM system amongst intensively managed patients and their healthcare providers.

Building strong adoption with an implantable device requires a strong network of healthcare providers trained on the Eversense sensor placement procedure.

Our clinical training team works directly with healthcare providers across the United States beginning with their initial training through full certification status.

Building strong adoption with

an implantable device requires a strong network of healthcare providers trained on the Eversense sensor placement procedure.

In the first few quarters of our commercial launch, our focus was ensuring the Endocrinology providers obtained the necessary training needed to support their diabetes patients.

second half of 2019, we began our second phase of establishing a large network of Eversense proceduralists with the launch of the Certified Eversense Specialist, or CES, network.

In 2019, we began our second phase of establishing a large network of Eversense proceduralists with the launch of the Certified Eversense Specialist, or CES, network.

This group of healthcare providers includes specialists who have strong familiarity with conducting in-office procedures such as dermatologists and plastic surgeons.

The CES network offers an alternative for healthcare providers who want to prescribe Eversense for their patients but prefer to refer the procedure to a specialist.

We have seen a strong desire of these specialists to become a CES as well as the willingness of the prescribing provider to refer the procedure to a CES, and we expect this program to be instrumental to ensuring patients have convenient and high quality placement of the Eversense sensor.

We launched our “Be Unstoppable”

campaign in June 2019 targeting current and former CGM users as well as naïve CGM users.

Through digital marketing, we are able to create interests amongst patients and these leads are then converted to prescriptions and purchases.

We continue to utilize social media to promote user experience with the product and we participate in major diabetes conferences around the world to create continued awareness amongst endocrinologists, diabetologists, diabetes educators, researchers, and the managed care community.

As people with diabetes often consult with their healthcare providers about treatment options, we believe that educating healthcare providers regarding the benefits of Eversense compared to SMBG and other currently available CGM systems is an important step in promoting its use in people with diabetes.

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We intend to continue educating healthcare providers and people with diabetes on the advantages of Eversense compared to SMBG and other currently available CGM systems.

As a result of our strategic partnership, Ascensia will be responsible for sales, marketing, market access, patient and provider onboarding and level one customer support.

We have established a joint alliance committee and joint marketing committee, each with equal representation from each party, in order to collaborate.

Reimbursement

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commercial third-party payor community in efforts to establish coverage for Eversense.

To date, we have received positive reimbursement decisions from U.S.

third-party payors that cover approximately 120 million people in the United States.

Some commercial payors have denied coverage deeming Eversense as an “experimental and investigational”

technology electing to wait for further clinical evidence, more safety data, or time in market.

To date, approximately 200 million people in the United States may have coverage and access to the Eversense via commercial or government (i.e., Medicare) payors.

Some commercial payors have denied coverage deeming Eversense as an “experimental and investigational” technology electing to wait for further clinical evidence, more safety data, or time in market.

We disagree with this position as the CGM class has already proven to improve health outcomes and Eversense is another product that fits into the class.

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As a result, some patients and their healthcare provider may choose not to use Eversense on a widespread basis.

Our reimbursement programs and patient appeals support, including the Eversense Bridge Program, are key initiatives to expanding payor policy and acceptance through case by case review and eventual denial overturn.

Our patient access programs and patient appeals support, including the Eversense Bridge Program, which was discontinued on December 31, 2020, have been key initiatives to expanding payor policy and acceptance through case by case review and eventual denial overturn and we anticipate Ascensia initiating select programs for this purpose.

This can be a long process with varying results in each case but is a prudent step to challenge payor positions of non-coverage given the strong evidence that supports CGM and Eversense.

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Each of these companies has received approval from the FDA to market their respective CGM system.

Dexcom’s CGM system was the first CGM system to be approved by the FDA for marketing as a non-adjunctive device, and Abbott’s Freestyle Libre was also approved for non-adjunctive use.

Both Dexcom (G6) and Abbott (Freestyle Libre) systems have factory calibration, and do not require user calibration.

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As the industry evolves, we anticipate encountering increasing competition from companies that integrate CGM with insulin pumps.

We expect all other CGM companies besides Dexcom to pursue an iCGM indication including Abbott and Medtronic.

Abbott also received an iCGM indication for their Freestyle Libre 2 product and we expect all other CGM companies besides Dexcom to pursue an iCGM indication including Medtronic.

In addition to CGM providers, we also compete with providers of SMBG systems.

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Any adverse determination in litigations, post grant trial proceedings, including interference proceedings, at the Patent Office relating to intellectual property to which we are or may become a party could subject us to significant liabilities to third parties or require us to seek licenses from third parties, and result in the cancellation and/or invalidation of our intellectual property.

Furthermore, if a court finds that we have willfully infringed a third party's intellectual property, we could be required to pay treble damages and/or attorney fees for the prevailing party, in addition to other penalties.

Furthermore, if a court finds that we have willfully infringed a third party's

intellectual property, we could be required to pay treble damages and/or attorney fees for the prevailing party, in addition to other penalties.

Although intellectual property disputes in the medical device area are often settled through licensing or similar arrangements, costs associated with such arrangements can be substantial and often require ongoing royalty payments.

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If we do not obtain necessary licenses, we may not be able to redesign our products to avoid infringement;

if we are able to redesign our products to

avoid infringement, we may not receive FDA approval in a timely manner.

if we are able to redesign our products to avoid infringement, we may not receive FDA approval in a timely manner.

Adverse determinations in a judicial or administrative proceeding or failure to obtain necessary licenses could prevent us from manufacturing and selling our products, which could have a significant adverse impact on our business.

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Regulation by the FDA

The FDA classifies medical devices into one of three classes according to the degree of risk the FDA determines to be associated with a device and the level of regulatory control deemed necessary to ensure the device’s safety and effectiveness.

The Eversense System is a Class III device and subject to pre-market approval application under section 515 of the FDCA in order to obtain a marketing approval.

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Noncompliance with these standards can result in, among other things, fines, injunctions, civil penalties, recalls or seizures of products, total or partial suspension of production, refusal of the government to grant 510(k) clearance or PMA approval of devices, withdrawal of marketing approvals and criminal prosecutions.

We believe that our design, manufacturing and quality control procedures are in compliance with the FDA’s regulatory requirements.

We must also comply with post-market surveillance regulations, including medical device reporting, or MDR, requirements which require that we review and report to the FDA any incident in which our products may have caused or contributed to a death or serious injury.

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Labeling and promotional activities are subject to scrutiny by the FDA and, in certain circumstances, by the Federal Trade Commission.

Medical devices approved or cleared by the FDA may not be promoted for unapproved or uncleared uses, otherwise known as “off-label”

Medical devices approved or cleared by the FDA may not be promoted for unapproved or uncleared uses, otherwise known as “off-label” promotion.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including substantial monetary penalties and criminal prosecution.

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These include harmonized international quality standards aimed at ensuring that medical devices are correctly designed and manufactured.

The method of assessing conformity varies depending on the class of the product, but normally involves a combination of self-assessment by the manufacturer and a third-party assessment by a "Notified Body." Notified Bodies are entities licensed (‘notified’) by the individual European member states to provide independent certification of certain classes of medical device.

Notified Bodies are entities licensed (‘notified’) by the individual European member states to provide independent certification of certain classes of medical device.

They apply for and are designated to carry out this function by the relevant national competent authorities, which carry out periodic assessment audits to determine whether the Notified Bodies continue to satisfy the necessary requirements.

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Once the appropriate conformity assessment procedure has been completed, the manufacturer must draw up a written declaration of conformity and affix the CE mark to the device.

The device can then be marketed throughout the European Economic Area (being the EU, Norway, Iceland and Liechtenstein) or EEA.

The device can then be marketed throughout the European Economic Area (being the EU, Norway, Iceland

and Liechtenstein) or EEA.

Notified Bodies perform surveillance and unannounced audits at the manufacturer and critical suppliers with respect to the devices covered by the certificates issued by them.

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Additional local requirements may apply on a country-by-country basis.

Outside of the

European Union, regulatory approval would need to be sought on a country-by-country basis in order for us to market our products.

Outside of the European Union, regulatory approval would need to be sought on a country-by-country basis in order for us to market our products.

All manufacturers placing medical devices into the market in the EEA must comply with the EU Medical Device Vigilance System.

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In May 2017, the European Commission finalized and adopted the text of the Medical Device Regulation (EU) 2017/745, or the EU Medical Device Regulation, which will repeal and replace both Directive 93/42/EEC concerning medical devices and Directive 90/385/EEC concerning active implantable medical devices.

The majority of the provisions in the EU Medical Device Regulation apply from Spring 2020.

The majority of the provisions in the EU Medical Device Regulation were to apply from Spring 2020, however, the enforcement has been postponed by a year due to the COVID-19 pandemic.

The current CE certificate will continue to be in effect, while the Company works to ensure compliance with the EU Medical Device Regulation and transitions the CE certificate from current 90/385/EEC Directive to MDR.

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Companies may also share truthful and not misleading information that is otherwise consistent with the labeling.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of

off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

In the United States, failure to comply with applicable regulatory requirements can result in enforcement actions by the FDA and other regulatory agencies.

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● operating restrictions;

● injunctions;

● criminal prosecution.

In the European Union, member states are responsible for enforcing the EU’s medical device rules and for ensuring that only compliant medical devices are placed on the market or put into service in their jurisdictions.

They have powers to suspend the marketing and use, or demand the recall, of unsafe or non-compliant devices.

They also have the power to bring enforcement action against companies or individuals for breaches of the device rules.

Non-compliance may also result in Notified Bodies revoking any certificate of conformity that they have issued for a device or the manufacturer’s quality system.

Our contract manufacturers, specification developers and some suppliers of components or device accessories, also are required to manufacture our products in compliance with current good manufacturing practice requirements set forth in the QSR.

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The Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations, imposes specified requirements relating to the privacy, security and transmission of individually identifiable health information.

Among other things, HITECH makes HIPAA's security standards directly applicable to business associates, defined as service providers of covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity.

HITECH also created four new tiers of civil monetary penalties and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys' fees and costs associated with pursuing federal civil actions.

Accordingly, state attorneys general (along with private plaintiffs) have brought civil actions seeking injunctions and damages resulting from alleged violations of HIPAA’s privacy and security rules.

Accordingly, state attorneys general (along with private plaintiffs) have brought civil actions seeking injunctions and damages resulting from alleged violations of HIPAA’s privacy and

security rules.

In addition, many state laws govern the privacy and security of health information in certain circumstances, many of which differ from HIPAA and each other in significant ways and may not have the same effect.

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The GDPR applies to personal data about identified or identifiable data subjects processed by automated means and data contained in, or intended to be part of, non-automated filing systems (traditional paper files) as well as transfer of such data to a country outside of the EU/EEA.

Under the GDPR, fines of up to €20.0 million or up to 4% of the annual global turnover of the infringer, whichever is greater, could be imposed for certain categories of infractions that constitute significant non-compliance.

The GDPR includes more stringent operational requirements for data processors and data controllers and creates additional rights for data subjects.

Additionally, in January 2020, the United Kingdom withdrew from the European Union, commonly referred to as “Brexit”.

The implications of Brexit and the future trading relationship between the United Kingdom and the EU are still uncertain and could lead to further legislative and regulatory changes.

In March 2017, the United Kingdom began the process to leave the EU by April 2019.

While the Data Protection Act of 2018, that “implements”

and complements the GDPR has achieved Royal Assent on May 23, 2018 is now effective in the United Kingdom, it is still unclear whether transfer of data from the EEA to the United Kingdom will remain lawful under GDPR.

While the Data Protection Act of 2018, that “implements” and complements the GDPR has achieved Royal Assent on May 23, 2018 is now effective in the United Kingdom, it is still unclear whether transfer of data from the EEA to the United Kingdom will remain lawful under GDPR.

We may incur liabilities, expenses, costs, and other operational losses under GDPR and applicable EU Member States and the United Kingdom privacy laws in connection with any measures we take to comply with them.

Additionally, California recently enacted legislation, effective January 1, 2020, that has been dubbed the first “GDPR-like”

law in the United States.

Additionally, California recently enacted legislation, effective January 1, 2020, that has been dubbed the first “GDPR-like” law in the United States.

Known as the California Consumer Privacy Act, or CCPA, it creates new individual privacy rights for consumers (as that word is broadly defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.

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The federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, receiving, offering or providing remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, to induce either the referral of an individual, or the furnishing, recommending, or arranging of a good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid or other federal healthcare programs.

The term "remuneration" has been broadly interpreted to include anything of value, including such items as gifts, discounts, the furnishing of supplies or equipment, credit arrangements, waiver of payments and providing anything at less than its fair market value.

The term "remuneration"

has been broadly interpreted to include anything of value, including such items as gifts, discounts, the furnishing of supplies or equipment, credit arrangements, waiver of payments and providing anything at less than its fair market value.

Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly and require strict compliance to provide protection.

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Further, the federal Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or, collectively, PPACA.

Specifically, as noted above, under the federal Anti-Kickback Statute, the government must prove the defendant acted "knowingly" to prove a violation occurred.

The PPACA added a provision to clarify that with respect to violations of the federal Anti-Kickback Statute, "a person need not have actual knowledge" of the statute or specific intent to commit a violation of the statute.

Specifically, as noted above, under the federal Anti-Kickback Statute, the government must prove the defendant acted "knowingly"

to prove a violation occurred.

The PPACA added a provision to clarify that with respect to violations of the federal Anti-Kickback Statute, "a person need not have actual knowledge"

of the statute or specific intent to commit a violation of the statute.

This change effectively overturns case law interpretations that set a higher standard under which prosecutors had to prove the specific intent to violate the law.

In addition, the PPACA codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.

Federal law also includes a provision commonly known as the "Stark Law," which prohibits a physician from referring Medicare or Medicaid patients to an entity providing "designated health services," including a company that furnishes durable medical equipment, in which the physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement.

Federal law also includes a provision commonly known as the "Stark Law,"

which prohibits a physician from referring Medicare or Medicaid patients to an entity providing "designated health services,"

including a company that furnishes durable medical equipment, in which the physician has an ownership or investment interest or with which the physician has entered into a compensation arrangement.

Violation of the Stark Law could result in denial of payment, disgorgement of reimbursements received under a noncompliant arrangement, civil penalties, and exclusion from Medicare, Medicaid or other governmental programs.

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The federal False Claims Act provides, in part, that the federal government may bring a lawsuit against any person whom it believes has knowingly presented, or caused to be presented, a false or fraudulent request for payment from the federal government, or who has made a false statement or used a false record to get a claim approved.

In addition, amendments in 1986 to the federal False Claims Act have made it easier for private parties to bring "qui tam" whistleblower lawsuits against companies under the federal False Claims Act.

In addition, amendments in 1986 to the federal False Claims Act have made it easier for private parties to bring "qui tam"

whistleblower lawsuits against companies under the federal False Claims Act.

Penalties include significant civil monetary penalties for each false claim, plus three times the amount of damages that the federal government sustained because of the act of that person.

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Transparency laws regarding payments or other items of value provided to healthcare providers and teaching hospitals may also impact our business practices.

The federal Physician Payment Sunshine Act requires most medical device manufacturers to report annually to CMS financial arrangements, payments, or other transfers of value made by that entity to physicians and teaching hospitals.

Beginning in 2022, applicable manufacturers also will be required to report information regarding payments and other transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants and certified nurse midwives during the previous year.

The payment information is made publicly available in a searchable format on a CMS website.

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in March 2010, the PPACA, was enacted, which substantially changes the way healthcare is financed by both governmental and private insurers, encourages improvements in the quality of healthcare items and services and significantly impacts the medical device industry.

In the years since its enactment, there have been, and continue to be, significant developments in, and continued legislative activity around, attempts to repeal or repeal and replace the PPACA.

In the years since its enactment, there have been significant developments in, and continued legislative activity around, attempts to repeal or repeal and replace the PPACA.

While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the PPACA have been signed into law.

The Tax Cuts and Jobs Act of 2017, or Tax Act, included a provision which repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the PPACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”.

Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the PPACA-mandated medical device tax and the “Cadillac”

tax on high-cost employer-sponsored health coverage and, effective January 1, 2021, also eliminates the health insurer tax.

Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the PPACA-mandated medical device tax and the “Cadillac” tax on high-cost employer-sponsored health coverage and, effective January 1, 2021, also eliminated the health insurer tax.

On December 14, 2018, a Texas U.S.

District Court Judge ruled that the PPACA is unconstitutional in its entirety because the “individual mandate”

was repealed by Congress as part of the Tax Cuts and Jobs Act of 2017.

District Court Judge ruled that the PPACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Cuts and Jobs Act of 2017.

Additionally, on December 18, 2019, the U.S.

Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the PPACA are invalid as well.

It is unclear how this decision, future decisions, subsequent appeals, and other efforts to repeal and replace the PPACA will impact the PPACA.

Supreme Court is currently reviewing the case, although it is unknown when a decision will be made.

Further, it is unclear how the Supreme Court ruling, other such litigation, and the healthcare reform measures of the Biden administration will impact the PPACA.

Brexit and the Regulatory Framework in the United Kingdom

On January 31, 2020, the United Kingdom, or UK, formally withdrew from the EU, commonly referred to as “Brexit”.

The United Kingdom and the EU are currently in a transition period during which the United Kingdom and the EU are negotiating additional arrangements, including their future trading arrangement.

The United Kingdom has stated that it wants the transition period to expire, and the future trading terms to be agreed, by December 31, 2020.

During the transition period, the UK and the EU will negotiate their future relationship, including the terms of trade.

The effects of Brexit will depend on any agreements the UK makes to retain access to EU markets, either during the transitional period or more permanently.

Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the UK determines which EU laws to replace or replicate.

In December 2020, the U.K.

agreed on a trade and cooperation agreement that will apply provisionally after the end of the transition period until it is ratified by the parties to the agreement.

On December 31, 2020, the U.K.

passed legislation giving effect to the trade and cooperation agreement, with the E.U.

expected to formally adopt the agreement in early 2021.

The agreement sets out certain procedures for approval and recognition of medical products in each jurisdiction.

Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the UK determines which EU laws to replace or replicate and may create logistical complications with respect to the movement and delivery of our products, which undergo certain manufacturing steps in the United Kingdom.

Given the lack of comparable precedent, it is unclear what financial, trade, regulatory and legal implications the withdrawal of the UK from the EU would have and how such withdrawal would affect us.

Several of our contract manufacturers are located in the UK.

Any of these effects of Brexit, among others, could adversely affect our business, financial condition and operating results.

Any of these effects of Brexit,

among others, could adversely affect our business, financial condition and operating results.

In the longer term, Brexit could materially impact the future regulatory regime which applies to medical devices and their approval in the UK.

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The UK Bribery Act 2010 and other applicable ant-corruption laws that apply in countries where we do business, generally prohibit us and our employees and intermediaries from authorizing, promising, offering, or providing, directly or indirectly, improper or prohibited payments, or anything else of value, to government officials or other persons to obtain or retain business or gain some other business advantage.

Under the UK’s Bribery Act, we may also be liable for failing to prevent a person associated with us from committing a bribery offense.

We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the UK and authorities in the EU, including applicable export control regulations, economic sanctions and embargoes on certain countries and persons, anti-money laundering laws, import and customs requirements and currency exchange regulations, collectively referred to as trade control laws.

Failure to comply with the UK’s Bribery Act, and other anti-corruption laws and trade control laws could subject us to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses.

As of December 31, 2019, we had 191 employees, all of whom are located in the United States.

Employees and Human Capital Resources

As of December 31, 2020, we had 82 employees, of whom over half hold Ph.D., M.D., master’s degree or other post-graduate degree, and all of whom are located in the United States.

The majority of employees are in operations and research and development positions aligned with our corporate focus.

None of our employees are represented by a labor union or covered by a collective bargaining agreement.

We consider our relationship with our employees to be good.

We compete in the highly competitive medical technology industry.

We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees, as well as highly qualified management and technical personnel.

Employee engagement is important to us and we focus on continuously enhancing our corporate culture and individual development programs.

We have surveyed our employees around culture, engagement, work environment, communication and other topics and work to incorporate and respond to their feedback.

We expect to conduct similar survey and response efforts in the future.

We conduct frequent company calls in an effort to update all employees on what is happening in various departments to ensure our employees understand our strategic vision as well as our day-to-day objectives.

We provide our employees with market competitive pay and bonuses, opportunities for equity ownership, professional development and training programs that enable continued learning and growth and a robust employment package that seek to promote well-being across all aspects of our employees’ lives, including health care, retirement planning and paid time off.

Our equity plans include an employee stock purchase plan and restricted stock units granted under our broad-based stock incentive programs.

Through our history of technological innovation, we appreciate the importance of retention, growth and development of our employees.

We continue to be committed to an inclusive culture which values diversity, equality, opportunity, and respect.

Corporate Information

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Our principal executive offices are located at 20451 Seneca Meadows Parkway, Germantown, Maryland 20876-7005 and our telephone number is (301) 515-7260.

Our common stock is listed on the NYSE American under the symbol “SENS.”

Available Information

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Additionally the SEC maintains an internet site that contains reports, proxy and information statements and other information.

The address of the SEC’s website is www.sec.gov.

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-K

Item 1. Business