Item 5.02 Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Robert Schumm and Anthony
Raab to Board of Directors
On September 30, 2020, the board of directors (the “Board”)
of Senseonics Holdings, Inc. (the “Company”) appointed Robert Schumm and Anthony Raab to serve as directors of the
Company, which appointments became effective on October 1, 2020. Mr. Schumm will serve as a Class I director whose term will expire
at the 2023 annual meeting of stockholders. Mr. Raab will serve as a Class II director whose term will expire at the 2021 annual
meeting of stockholders.
There is no family relationship between Mr. Schumm, Mr. Raab
and any of the Company’s other directors or executive officers. Mr. Schumm was appointed as a director pursuant to that certain
Investor Rights Agreement (the “PHC IRA”), dated August 9, 2020, by and between the Company and PHC Holdings Corporation
(“PHC”). Mr. Raab was appointed as a director pursuant to that certain Investor Rights Agreement (the “Masters
IRA”), dated August 9, 2020, by and between the Company and Masters Special Situations, LLC (“Masters”). The
PHC IRA and the Masters IRA are more fully described in the Company’s Current Report on 8-K filed with the U.S. Securities
and Exchange Commission (the “SEC”) on August 10, 2020 and the descriptions thereof are qualified in their entirety
by reference to copies of the PHC IRA and Masters IRA, which are filed as exhibits to the Company’s Form 8-K/A filed with
the SEC on August 31, 2020.
More information about Mr. Schumm and Mr. Raab is set forth
below:
Robert
Schumm, age 54, has served as the President and Chief Executive Officer of Ascensia Diabetes Care AG and has
led the Diabetes Management Domain for PHC Group since October 2019. Mr. Schumm has also served as the President of Ascensia Diabetes
Care US, Inc. since January 2016. Prior to joining Ascensia, Mr. Schumm held roles of increasing responsibility at Bayer Healthcare
LLC from 1996 to January 2016, most recently serving as the Vice President, Global Marketing from 2013 to January 2016. Mr. Schumm
holds a bachelor’s degree in psychology from Princeton University and an M.B.A. in Marketing and International Business from
New York University’s Stern School of Business.
As more fully described in the Company’s Current Report
on Form 8-K filed with the SEC on August 10, 2020, on August 9, 2020, the Company entered
into a Collaboration and Commercialization Agreement with Ascensia Diabetes Care Holding AG (“Ascensia”), an
affiliate of Ascensia Diabetes Care AG, pursuant to which the Company has granted Ascensia
the right to distribute Eversense, Eversense XL and the new Eversense 180-day product in the global market for an initial term
of five years, subject to exceptions as set forth in the agreement. Pursuant to the agreement, Ascensia will receive a portion
of net revenue at specified tiered percentages ranging from the mid-teens to the mid-forties 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, Eversense XL and the new Eversense 180-day product from the Company at prices to be negotiated
based on parameters set forth in the agreement. Under the agreement, the Company will be responsible for product development and
manufacturing, including regulatory submissions, approvals and registrations, and Ascensia will be responsible for sales, marketing,
market access, patient and provider onboarding and customer support.
In addition, on August
9, 2020, the Company entered into a financing agreement pursuant to which the Company issued $35.0 million in aggregate principal
amount of Senior Secured Convertible Notes due in October 2024 (the “2024 Notes”), to Ascensia’s parent company,
PHC Holdings Corporation (“PHC”). The Company also issued 2,941,176 shares of common stock to PHC as a financing fee,
which had a value of $1.4 million based on the closing price on August 9, 2020. The Company also has the option to sell and issue
PHC up to $15.0 million of convertible preferred stock on or before December 31, 2022, contingent upon receipt of any stockholder
approval required by the listing rules of the NYSE American and obtaining approval for the 180-day Eversense product for marketing
in the United States before such date.
In consideration of Mr. Schumm’s relationship with Ascensia,
he will not receive compensation in his capacity as director of the Company.
Anthony
Raab, age 40, is a co-founder of Masters Special Situations, LLC (“Masters”), and has served as a
Senior Analyst at Masters Capital Management since 2015. He received his B.A. in economics with a certificate in markets and management
from Duke University in 2003.
As more fully described in the Company’s 8-K filed with
the SEC on August 10, 2020, on August 9, 2020, the Company entered into a Stock Purchase
Agreement with Masters. Pursuant to the Stock Purchase Agreement, the Company issued and sold to Masters 3,000 shares of Series
A Preferred Stock, at a price of $1,000.00 per share in an initial closing. In addition, Masters or their assignees have the option
to purchase up to an additional 27,000 shares of Series A Preferred Stock at a price of $1,000.00 per share in a subsequent closing,
subject to the terms and conditions of the Stock Purchase Agreement, upon the later to occur of 90 days following the initial closing
or the date 10 days after the Company receives stockholder approval to increase its authorized common stock by an amount sufficient
to permit conversions of the Series A Preferred Stock, but in any event no later than 150 days after the initial closing, and subject
to specified conditions.
In addition, on September 26, 2020, the Company entered into
a consulting agreement with Masters, pursuant to which Masters has agreed to provide consulting and advisory services to the Company
in exchange for a consulting fee of $150,000 per year (the “Consulting Agreement”). The Consulting Agreement has an
initial term through September 26, 2022.
On October 1, 2020, Mr. Raab was granted a restricted stock
unit for 273,077 shares of the Company’s common stock, which will vest in full on October 1, 2021, subject to Mr. Raab’s
continuous service through such date. In addition, Mr. Raab will be eligible for an annual retainer of $37,500 for his service
as director pursuant to the Company’s non-employee director compensation policy.
Mr. Schumm and Mr. Raab have also each entered into the Company’s
standard form of indemnification agreement with the Company.