Senseonics entered into a new senior secured term loan agreement with certain funds managed by existing stakeholder Highbridge Capital Management. The agreement will provide up to $20 million in near-term liquidity.

Pursuant to the term loan agreement, Senseonics will draw down $15 million from the new first lien secured term loan with a maturity date of Oct. 24, 2021. The first lien term loan will pay interest in cash at an annual rate of 12% or, at Senseonics’ option, payment in kind at an annual rate of 13%. The company may draw the remaining $5 million from the first lien term loan within 120 days subject to certain conditions.

“This financing immediately improves Senseonics’ liquidity and financial stability,” Tim Goodnow, president and CEO of Senseonics, said. “When combined with our existing cash and cash equivalents, along with our previously announced cost-reduction measures, we believe this credit facility will provide the company with sufficient funding to fully explore strategic opportunities, as previously announced. At the same time, we believe the facility provides resources to complete our value-enhancing development activities for the Eversense XL CGM System for use up to 180-days in the U.S., including submission to seek FDA approval for commercial distribution.”

Alongside this new credit facility, Senseonics also entered into an exchange agreement with funds managed by Highbridge providing for the exchange of $24 million aggregate principal amount of the company’s outstanding 5.25% senior convertible notes due 2025 for $15,675,000 million aggregate principal amount of newly issued second lien secured notes due Jan. 24, 2022 and 11,026,086 shares of the company’s common stock. In connection with the exchange, the company will issue warrants to the holders of the second lien notes to purchase an aggregate of 4,500,000 shares of the company’s common stock at $0.66 per share at any time through the third anniversary of their issuance. The second lien notes will pay interest in cash at an annual rate of 7.5% or, at Senseonics’ option, payment in kind at an annual rate of 8.25%.

Subject to certain conditions, portions of the debt under these new credit facilities may be converted into shares of common stock of the company, in certain cases at the option of Highbridge and in others at the option of Senseonics. In addition, Senseonics has the right to prepay the new credit facilities, subject to a prepayment premium, which under certain conditions the company can elect to pay in common stock. As consideration for the first lien term loan, Senseonics issued 1,500,000 shares of common stock to that loan’s lenders as a commitment fee.

The transaction is expected to close on or about April 24, 2020, subject to customary closing conditions.

Senseonics is a medical technology company focused on the development and commercialization of a long-term, implantable continuous glucose monitoring (CGM) system for people with diabetes.